Clearing OTC Derivatives in Europe

Clearing of OTC derivatives is an essential part of the financial market infrastructure, and performs a critical function catering for the need of market participants to hedge risks by using OTC derivatives. As a response to the financial crisis, central clearing has also added greater safety and transparency in the financial sector. Nevertheless, although the main risks have been addressed, they have not disappeared. Clearing OTC Derivatives in Europe provides a comprehensive and practical guide to the legal, regulatory, and operational aspects of the OTC derivatives clearing industry in Europe.

This volume consists of six parts which provide an in-depth analysis of all relevant aspects of the entire operation of clearing OTC derivatives. Part I provides a general description of OTC Derivatives clearing as well as a detailed description of the development of the EU regulatory regime from an historical perspective also highlighting the global perspective. Part II discusses structural elements of OTC derivatives clearing including the various access models (incl. sponsored access), clearing mechanics (novation), collateral management, CCP governance, clearing documentation and capital requirements. Part III examines the CCP's default management, segregation and portability of client assets and CCP recovery & resolution. Part IV analyses the transaction chain including open access as well as the relationship with trading venues and settlement organisations. Part V addresses cross border issues and the consequences of Brexit for the OTC derivatives clearing industry. Part VI focusses on future developments including distributed ledger technology (DLT).

Written by leading experts from across Europe and various disciplines including governmental and regulatory bodies, academics, law firms, and market practitioners, Clearing OTC Derivatives in Europe is an indispensable companion for anyone involved with financial market infrastructure and OTC derivatives.

Part I: Introduction
1. After The Dust Has Settled: Clearing OTC Derivatives in Europe After A Decade Of Regulation, Bas Zebregs, Victor De Serière, Patrick Pearson & Rezah Stegeman
2. OTC Derivatives Clearing Explained, Tina Hasenpusch & Rezah Stegeman
3. Development Of The Regulatory Regime For OTC Derivatives Clearing, Patrick Pearson
Part II: Structural Elements Of Clearing
4. CCP Access Structures, Christina Sell
5. Clearing Mechanics, Christian Chamorro-Courtland
6. OTC Derivatives Clearing And Collateral Management, Manmohan Singh
7. What Kind Of A Thing Is A Central Counterparty? The Role Of Clearing Houses As A Source Of Policy Controversy, Rebecca Lewis & David Murphy
8. OTC Derivatives Clearing Documentation, Emma Dwyer & Emma Lancelott
9. Capital Requirements For Bank Exposures To CCPs, Marc Peters
Part III: Default Management
10. Segregation And Portability Of Cleared OTC Derivatives In Europe, Bas Zebregs
11. Default Management, David Horner
12. Recovery And Resolution Of CCPs, Victor De Serière
Part IV: The Transaction Chain
13. Clearing And Trading & Settlement, Apostolos Thomadakis & Karel Lannoo
14. Open Access For OTC Derivatives: Concept And Implications, Corentine Poilvet & Julien Jardelot
Part V: Cross Border Issues
15. Cross Border Clearing, Ulrich Karl
16. Brexit: Equivalence; Location Policy, Dermot Turing
Part VI: The Future Of OTC Derivatives Clearing
17. The Potential Impact Of The Distributed Ledger Technology On OTC Derivatives Markets, Randy Priem
18. The Future Of Centrally Cleared OTC Derivatives Markets, Evariest Callens & Klaus Löber