Client Alert
| September 9, 2011
"Close-Out Netting": New Developments in Russian Repos and Derivatives Regulation
In August 2011, amendments to Russian securities and bankruptcy legislation became effective that expressly permit "close-out netting" in the Russian Federation. This will greatly facilitate sale-repurchase ("repo"), derivatives and other financial transactions under Russian law.
Until now Russian courts have given effect to netting arrangements only pre-insolvency. However, they have generally considered netting as a form of set-off, which is expressly prohibited in insolvency proceedings. The amendments have modified certain provisions of the Law on the Securities Market, the Law On Insolvency (Bankruptcy) and the Law On Insolvency (Bankruptcy) of Credit Organizations. These amendments entered into force on 11 August 2011 and are part of a range of recent and ongoing reforms to modernize Russian financial markets and insolvency laws. The Federal Service for Financial Markets has started to work on the legal acts necessary for the implementation of the amended law.
This memorandum is intended only as a general discussion of these issues. It is not considered to be legal advice. We would be pleased to provide additional details or advice about specific situations. For additional information on this important topic, please feel free to call upon your Dewey & LeBoeuf relationship partner. No part of this publication may be reproduced, in whole or in part, in any form, without our prior written consent.
For further information on Dewey & LeBoeuf, please visit www.dl.com. +1 888 532 6383