Academics and commentators have written about the various legal issues regarding the operations of Central Counterparty (CCP) systems. However, there remains a gap in the literature over the precise nature of the counterparty substitution process from a legal perspective. This article's focus is to address and clarify that issue in order to provide legal certainty in this area. It proposes to describe, from a legal perspective, the counterparty substitution mechanism between the clearing members and the CCP system through the contractual processes of multilateral novation netting and open offer.
|Journal||Banking and Finance Law Review|
|Publication status||Published - Jun 2011|