Late nights and illegality – but start of clearing in US goes well
The days either side of the first US clearing deadline saw last-minute decisions by clients and regulators, operational niggles and some illegality. The industry expects breaches of the rules to get a pass for now, so the first phase of the new regime is being seen as a success. The second phase is already causing some angst, though. By Joe Rennison, with additional reporting by Matt Cameron and Duncan Wood
Forty-one months after the Group of 20 summit in Pittsburgh set the process in motion, the clearing of over-the-counter derivatives became law in the US on March 11. The law was broken immediately. In the first week of mandatory clearing, a number of futures commission merchants (FCMs), which provide their clients with access to a clearing house, breached a Commodity Futures Trading Commission (CFTC) requirement to accept or reject client trades in less than a minute.
“There have been some
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