Banks and end-users may be forced to close out and replace trades that are destined to be cleared as a result of the delay to the authorisation of third-country clearing houses, dealers are warning. The danger zone starts up to seven months prior to the clearing deadline.

The issue arises because of the so-called frontloading provision in the European Market Infrastructure Regulation (Emir) – a rule forcing certain counterparties to retroactively clear some existing trades.

During the