Documenting a derivatives clearing relationship—EU platforms
Produced in partnership with Assia Damianova of Cadwalader Wickersham & Taft
Documenting a derivatives clearing relationship—EU platforms

The following Banking & Finance guidance note Produced in partnership with Assia Damianova of Cadwalader Wickersham & Taft provides comprehensive and up to date legal information covering:

  • Documenting a derivatives clearing relationship—EU platforms
  • How is clearing achieved
  • Client clearing
  • Two main models of clearing
  • The documentation process
  • Industry documents
  • The ISDA Amend tool
  • Industry clearing templates
  • Riskless principal
  • Transaction limits
  • more

BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This has an impact on this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions—Key issues for derivatives transactions and Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs.

How is clearing achieved

The clearing obligation for counterparties to an over-the-counter (OTC) derivative contract arises under the European Market Infrastructure Regulation (EU) No 648/2012 (EMIR). Derivative contracts are cleared through a central counterparty (or simply, a clearing house) (a CCP) via a clearing member (CM).

EMIR REFIT (Regulation (EU) 2019/834, amending Regulation (EU) 648/2012 (EMIR)), as regards the clearing obligation, the suspension of the