Trade rejections spark clearing document rethink
Industry group considers changes to the standard cleared derivatives execution agreement, following concerns that dealers have the unilateral right to terminate rejected cleared trades
An industry working group is discussing changes to the standard cleared derivatives execution agreement that will allow the mandatory resubmission of rejected trades. The move is in response to concerns that dealers currently have the right to terminate a trade that is rejected for clearing, potentially saddling the buy-side counterparty with breakage costs.
The issue has become particularly pressing following the introduction of a Commodity Futures Trading Commission (CFTC) rule on March 11
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