![]() ![]() While its use has spread in recent years, with ISDA recognizing India two years ago, the world’s second-largest economy was the most notable exception. Without close-out netting, financial institutions face higher transaction costs and have to provide margin on a gross basis, which means they can’t use any cash that they stand to receive from counterparties to offset their liabilities. The International Swaps and Derivatives Association recognizes over 80 jurisdictions that formally rely on the mechanism, which often requires carve-outs from bankruptcy laws. The trading in Chinese OTC derivatives accounted for just around 1% of global turnover in 2019, compared with 3.3% for Japan, according to a 2021 report by the International Swaps and Derivatives Association.Ĭlose-out netting is a method to determine the net obligations of a defaulted counterparty to a derivatives transaction. Chinese houses can also be more active internationally.” ![]() “International houses will not only be able to deal with Chinese counterparties, but go into China and be a real player, a market maker. ![]() “It’s absolutely a gamechanger,” said Chin-Chong Liew, a partner at Linklaters in Hong Kong, adding it will fuel growth in the Chinese over-the-counter market. While there’s set to be some adjustment as market participants shift to the new system, it holds the promise of eventually revolutionizing cross-border trading in an economy that still remains significantly cut off from international markets. The development, which follows decades of lobbying by the finance industry, will remove a major barrier to international participation, according to Bloomberg Intelligence. This recognition of so-called close-out netting is seen lowering the cost of trading by reducing the funds that would need to be set aside to protect against credit risks. (Bloomberg) - A regulatory breakthrough is expected to slash costs for investors trading over-the-counter derivatives in China, the latest step in opening up the nation’s capital markets to foreign investors.Ī Chinese law that takes effect Monday enforces a mechanism used around the world for determining payouts if a derivative counterparty defaults, bringing the standards there in line with those used in other major markets. ![]() COSCON has been actively engaged in Corporate Social Responsibility activities, and been encouraging functions and employees to undertake responsibilities for public welfare and disaster relief.© Reuters China ‘Gamechanger’ Derivatives Law Is Latest Bid to Open Market Link to "Awards"ĬOSCON puts premium on service quality and uphold the values of "facilitated, Credible, harmonious and Outstanding". As a result of this commitment, COSCON has consistently received awards and commendations. On top of China and Asia, COSCONâs plies its route between vital ports in Europe, America, Africa and Australia.ĬOSCON committed to providing eco-friendly, efficient and reliable container shipping services to global clients. In mainland China, COSCON boasts service coverage containing 300 sales and service points. COSCON has woven a huge global service network which consists of more than 400 sales and service points. (COSCON) is one of the worldâs leading providers of integrated container shipping service.Īs end of 2010, COSCON owns 150 container vessels totaling over 610,000 TEUs which are deployed in over 100 routes, covering 144 principal ports in 44 countries and regions. ![]()
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