In-house reveal concerns about EU derivatives plans

Author: | Published: 15 Dec 2010

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 be...