First wave of EU client clearing to catch estimated 400 firms

It could be 75, 400 or thousands – those are three dealer estimates of how many clients will be in Europe’s first wave of clients to start clearing. Risk’s own research suggests the second of those numbers is more likely, but the only certainty is that banks are facing some hard graft. By Lukas Becker and Fiona Maxwell

lee-mccormack-nomura
Lee McCormack, Nomura

One of the big mysteries of Europe's incoming clearing regime is the identity of its so-called category two firms. Originally covering almost all of the region's derivatives participants, the category was split by the European Securities and Markets Authority (Esma) in October, and may now apply to as few as 75 big clients, according to one bank's estimate, or as many as 400, says another.

It matters because companies in category two will be the first to fall subject to Esma's clearing rules –

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