China is establishing an independent derivatives market that
supports its unique economic model. It has forged ahead on this
path over the past 12 months, albeit sometimes at its own
expense. But one area in which China could follow international
best practice in 2010 is close-out netting.
I think that something will happen in 2010 or the next
two years to strengthen certainty on close-out netting,
says Jane Jiang of Allen & Overy. This could happen
at a secondary legislative or judicial level. The pressure is
building up and people are seeking clarification. Some action
will be taken.
This will be a relief to all those that deal with
Chinas derivatives market. The past 12 months have seen
positive and negative developments, but all suggest China is
not keen to simply accept international practice.
In March 2009, the National Association of Financial Market