Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
Find up-to-date guidance on points of law and then easily pull up sources to support your advice with Lexis PSL
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
Nigel Dickinson, partner, and Victoria Nevins, associate, at Norton Rose Fulbright LLP discuss the potential implications of Brexit on the derivatives market.
On 23 June 2016 the UK voted to leave the EU. As a result of this vote there are not any immediate legal changes that need to be made to the financial regulations which regulate derivatives transactions in the UK. This was confirmed in statements from the UK Financial Conduct Authority and the Governor of the Bank of England on 24 June 2016 and therefore market participants should continue to comply with their obligations under UK and EU law.
This vote has however had an immediate impact on derivatives transactions as a result of current market volatility. Some of the immediate consequences of the UK’s decision to leave on derivatives transactions include:
The value of certain collateral assets has declined which in turn has triggered increased collateral posting obligations, increased haircuts and has resulted in certain assets becoming ineligible, in each case making derivatives trading more expensive.
The mark-to-market exposures under existing derivatives transactions have increased which has subsequently triggered a greater number of margin calls.
The credit ratings/creditworthiness of certain market participants have been negatively impacted by the vote. As a result, it may be more expensive for such market participants to enter into new derivatives transactions and to perform their obligations under their existing derivatives transactions. Market participants should also consider whether any credit deterioration of their counterparty has triggered any credit related termination events or events of default applicable to such counterparty under their derivatives documentation.
As a result of the current market volatility, the financial pressures on certain market
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
0330 161 1234