Exchange traded derivatives
Exchange traded derivatives

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Exchange traded derivatives
  • What are exchange traded derivatives?
  • Advantages of exchange traded derivative
  • Exchange and Clearing House
  • Reporting framework
  • Collateralisation/margin

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.

Since the G-20 meeting at Pittsburgh in 2009, there has been a push for ‘futurisation’ of derivatives. This effectively means a move towards derivatives which are standardised, easily priced in the market and cleared with a central clearing house to mitigate counterparty risk. In short, the push was for over-the-counter (OTC) derivatives to take on the essential characteristics of ‘exchange traded derivatives’ (ETDs).

This Practice Note examines