Chilean Central Bank Posts for Comments Regulation for the Settlement of Derivative Contracts - Finance and Banking - Chile Law Articles in English - Mondaq Business Briefing - Books and Journals - VLEX 696014465

Chilean Central Bank Posts for Comments Regulation for the Settlement of Derivative Contracts

Author:Mr Diego Peralta and Juan Antonio Valdés
Profession:Carey
 
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The Central Bank of Chile has posted for comments a draft regulation for the settlement of derivative contracts entered into under any of the Master Agreements approved thereby, should certain events affecting the solvency of one of the parties thereto occur. Read more in

http://www.bcentral.cl/es/faces/pfinanciera/compendionormas/financieras/introcnf

As per the regulations currently in effect, should any such event occur, the counterpart cannot terminate early the corresponding contract (whilst the event is still occurring) looking for its settlement via the off-setting of the reciprocal obligations, mechanism that would otherwise allow the payment of the difference between the corresponding amounts instead of the total amounts outstanding. This circumstance has conveyed the declaration of Chile as a non-netting jurisdiction, which in practical terms produces a higher cost for the Chilean parties entering...

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