With the SEF October 2 deadline and US government hoopla hogging market attention, another less trumpeted deadline just passed.  The exemptive relief for US bank foreign branches expired on October 9th which allowed them to trade with non-US clients without being subject to the mandate.

Financial News lays out the details in the attached article: EU Firms Forced to Take Action to Avoid US Clearing Rules (subs. required).

Given the EU clearing mandate is several quarters off, US banks will be trying to hold onto EU clients by transferring the business from their EU branches to their own EU affiliate dealing entity.  Anecdotally the legal negotiation and paper work required by the deadline may have stumped some smaller EU firms – resulting in simply re-routing business to non-US dealers – at least temporarily.

Jon