New frontloading flap over €8bn clearing threshold
New threshold-based approach to clearing mandate leaves too little time for clients to comply and dealers at risk of mispricing trades that may need to be frontloaded, critics argue
Dealers are urgently seeking changes to the final draft of Europe's proposed clearing mandate for interest rate swaps amid fears that clients will be caught out by a change to the timeline. On the day the rules take effect – a moving target – derivatives users have to know whether the previous three months of trading leaves them above an €8 billion notional threshold, which implies they may need to start monitoring their trades as early as this week.
"To go from the previous classification and
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