Emma Dwyer, Emma LancelottFrom: Clearing OTC Derivatives in Europe
Edited By: Bas Zebregs, Victor de Seriere, Rezah Stegeman, Patrick Pearson
This chapter provides an introduction to over-the-counter (OTC) derivatives clearing documentation. It sets out an overview of the legal framework and key concepts underpinning OTC clearing and discusses the supporting documentation. These include the central counterparty (CCP) rules, the International Swaps and Derivatives Association/Futures Industry Association (ISDA/FIA) Cleared Derivatives Execution Agreement, the ISDA/FIA Client Cleared OTC Derivatives Addendum, the FIA Clearing Module, collateral documentation, and related legal opinions. The chapter also examines considerations arising from regulatory obligations and other developments, some of which may also give rise to documentation requirements. These include the European Market Infrastructure Regulation (EMIR) Art. 39(7) disclosure requirements; the Markets in Financial Instruments Directive II (MiFID II), and the Markets in Financial Instruments Regulation (MiFIR) Model Provisions for the Addendum; EMIR requirements to provide clearing services under fair, reasonable, non-discriminatory, and transparent (FRANDT) commercial terms; and changes to CCP rules.
Emma DwyerFrom: Financial Markets and Exchanges Law (3rd Edition)
Edited By: Michael Blair, George Walker, Stuart Willey
This chapter considers the markets for the trading of derivatives and commodities in the UK, which form an important part of the financial services industry of the City of London. This chapter describes the precursors of the types of trading activities that were conducted historically in the City of London and have spread to neighbouring areas of west, central, and east London for the past forty years. It also emphasizes the growth of electronic trading platforms and the rapid growth of technology that diffuses trading activities geographically. This chapter addresses the question as to whether it makes sense to continuously speak of “UK” derivatives and commodities markets, as opposed to European or international markets. It talks about over—the—counter (OTC) trades executed in the UK that often involve at least one party operating from a location outside the UK.