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Title: Regulating OTC Derivatives: The Central Counterparty's Role and EMIR
Authors: Hsiao, Mark
First Published: 24-Mar-2017
Presented at: Governing Shadow Banking, Institute of Advanced Legal Studies, London, England
Start Date: 24-Mar-2017
End Date: 24-Mar-2017
Publisher: Elgar
Citation: Governing Shadow Banking, In Iris Chiu & Iain MacNeil (eds) Research Handbook on Shadow Banking: Legal and Regulatory Aspects, 2017
Abstract: The Chapter advances on an argument for the regulation of the OTC derivatives brings out the shadow banking transactions out of shadow or transforms shadow banking into resilient market-based finance. The argument is advanced on the contextual analysis of the European Market Infrastructure Regulation (EMIR) that requires the EU Member States to effect a mandatory reporting obligation to trade repository (TR) and a mandatory clearance on a list of designated OTC derivatives to be settled through a Central Counterparty (CCP). By viewing the both mandatory rules as business norms, it becomes clear that they are not just techniques to assist regulatory supervision, but also to regulate increasingly complex structured finance. The CCP not only acts as buyer and seller to each party in the same transaction by replacing each other with a novation contract, the process involves net-off mutual obligations resulting in a single net payment. By viewing payment obligation as the essential characteristic of the OTC derivatives, there is a clear shift to view the contract as a commodity.
Embargo on file until: 1-Jan-10000
Version: Post-print
Status: Peer-reviewed
Type: Conference Paper
Rights: Copyright © The Author(s), 2017.
Description: The file associated with this record is under embargo while permission to archive is sought from the publisher. The full text may be available through the publisher links provided above.
Appears in Collections:Conference Papers & Presentations, School of Law

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