Yeowart and Parsons on the Law of Financial Collateral
Show Less

Yeowart and Parsons on the Law of Financial Collateral

Geoffrey Yeowart, Robin Parsons, Edward Murray and Hamish Patrick

This book is the first of its kind to offer a systematic examination of the whole law relating to financial collateral. It does so in two parts. First, it explains the law created by the Financial Collateral Arrangements (No 2) Regulations 2003, the Directive it implemented and related legislation. Second, it examines how financial collateral is used in practice in a range of different markets. It will be an essential reference point for all legal practitioners operating in financial markets.
Buy Book in Print
Show Summary Details
You do not have access to this content


Geoffrey Yeowart, Robin Parsons, Edward Murray and Hamish Patrick


This chapter is principally concerned with the use of close-out netting and financial collateral in relation to derivative transactions privately negotiated between two parties, at least one of whom is in the UK. Such transactions are said to be traded ‘over-the-counter’ (‘OTC’), to distinguish them from transactions executed on a formal regulated market, such as a futures and options exchange or derivatives trading platform, which are referred to as ‘exchangetraded’ derivative transactions. OTC derivative transactions include swap, option and forward transactions on: interest rates; foreign exchange (‘FX’) rates; equity indices and equity shares; debt securities; bullion; agricultural and industrial commodities and commodity indices; electricity; energy prices; freight forward rates; credit risk; emissions allowances; statistics relating to inflation and other macroeconomic measures, weather, catastrophe, longevity; and any other quantitative measure of economic or financial risk or value. An OTC derivative transaction may be cash-settled or physically-settled. Under a cash-settled OTC derivative transaction, the performance obligations of each party are limited to payment. Under a physically-settled OTC derivative transaction, at least one party has an actual or contingent obligation to deliver assets such as securities or commodities. OTC derivative transactions are normally traded between two parties under the terms of a master agreement, most often one based on one of the standard forms of master agreement published by the International Swaps and Derivatives Association, Inc. (‘ISDA’), discussed in more detail below.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.