In-house counsel are concerned about the top-down approach
that the European Securities and Markets Authority (Esma) could
apply to the clearing of OTC derivatives contracts.
As part of the dual process that will deem a contract
eligible for clearing, Esma can decide whether certain
derivatives that are not cleared under the existing regime must
move to a clearing system.
But according to Janet Wood of Bank of America Merrill Lynch
in London, this could produce a strange result if Esma mandates
clearing of a product despite there being no existing central
clearing house for it to go through.
Speaking during an IFLR web seminar in association with
Morrison & Foerster, Wood said she hoped the problem would