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Faulty Confirmation fixed by the Court

Introduction   On 8 March 2016, the High Court[1] rendered judgment on a claim by LSREF III Wight Limited (“Wight”) against Millvalley Limited (“Millvalley”) resulting from the early termination of a swap. The entitlement to an Early Termination Amount stood or fell on Additional Termination Events included in the 2002 ISDA Master Agreement executed by […]

Crestsign mis-selling: suspense to last indefinitely

As part of a confidential settlement reached with NatWest and RBS, Crestsign vacated the appeal set to be heard in April 2016. Accordingly, the unsuccessful rendezvous with the Court of Appeal will leave open for now the difficult questions at the heart of this swap mis-selling case and also found in a number of similar […]

Irresistible appeal of CCP portfolio margining

On 25 February 2016, the CFTC requested public comments on the petition of LCH.Clearnet Limited (“LCH”) to introduce portfolio margining across certain exchange-traded interest rate futures and OTC interest rate swaps. Economically-correlated interest rate futures would be pooled with OTC rate swaps for margining purposes, resulting in reduced collateral requirements for clearing members, and ultimately, […]

ESMA’s call for comments on benchmark regulation

On 15 February 2016, ESMA published a Discussion Paper on the Benchmarks Regulation. The paper was published ahead of the entry into force of the regulation, in order to give stakeholders more time to share their views on the outstanding points to be addressed in delegated acts and technical standards. The regulation is expected to […]

Blurred line in the sand: CCPs’ role in indirect clearing

ESMA`s latest consultation on indirect clearing arrangements under EMIR and MiFIR closed on 17 December 2015. The absence of consensus on the majority of issues is evidenced by the large number of disparate responses received from participants up and down the clearing chain. In particular, a stark criticism is that the twin RTS on indirect […]

Near-final EU benchmark regulation: transparency by statement

On 4 December 2015, the final compromise text of the EU benchmark regulation was released. The text already received approval from the Council and the European Parliament on 24 November 2015, and from the Permanent Representatives Committee (COREPER) on 9 December 2015. The next step is to submit the regulation to the European Parliament for […]

Well-oiled QCCP deadline delay

In a meeting held 23 November 2015, the European Banking Committee of the European Commission reached a consensus on a fourth extension of the QCCP deadline. The transitional period relates to own funds requirements for exposures to central counterparties under CRR, where CCPs established in a third country not yet recognised under EMIR are nonetheless […]

EU benchmark regulation tick mark

On 25 November 2015, the European Commission published a communiqué welcoming the agreement reached with the European Parliament and the Council of the EU on the draft benchmark regulation. By bringing the regulation a step closer to a vote by the European Parliament, the uptick might revive concerns expressed by those who suggested the text went […]

“Open kimono” approach to default of a CCP’s clearing member

On 2 November 2015, the CFTC’s Market Risk Advisory Committee gathered to discuss the recommendations of its CCP Risk Management Subcommittee, which is dedicated to CCPs’ preparations for the default of a significant clearing member. The Committee conducts public meetings, submit reports and presents recommendations to the CFTC on matters relating to evolving market structures and […]

When even benchmark waterfalls become a free fall

On 23 October 2015, the Financial Markets Law Committee (FMLC) published a letter highlighting certain issues with regard to the proposal[1] for EU regulation on benchmarks. It was well-known that the regulation would impose a heavy burden on benchmarks established outside the EU, as the United States has been very vocal about the initiative. With […]

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