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Many Active Funds Not Ready to Begin Clearing?

Risk Magazine is reporting that over 200 funds, managed by 77 fund managers (a full list of which can be found here), are known to be “Active Funds” and so will be subject to mandatory clearing under the Dodd-Frank Act, due to commence in relation to certain IRS and CDS on 11 March 2013.

According to the article, up to a third of these funds may not yet be ready to trade, due mainly to the fact that trading documentation has not been completed and also due to ongoing negotiations over the extent to which clearing members will commit to pre-fund margin for individual clients.

Given the limited resources of clearing members to onboard clients, the lesson seems to be to get in early or risk finding yourself at the back of the queue.

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