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Client Clearing: An ISDA/FBF Initiative for the French Market

Alban Caillemer du Ferrage
Karole-Anne Sauvet
Jones Day - Paris Office

August 4, 2014

Previously published on August 2014

The International Swaps and Derivatives Association ("ISDA") and the French Banking Federation ("FBF") just released the French Law Annex to the ISDA/FOA Client Cleared OTC Derivatives Addendum.

This new French Law Annex will allow parties to any FBF Master Agreement to document, efficiently and in a manner consistent with the prevailing market practice, the clearing of their over-the-counter ("OTC") derivatives transactions and the collateralization of their cleared transactions.

The ISDA/FOA Addendum was published in 2013 by ISDA and the Futures and Option Association (since renamed FIA Europe) and is the most-used template to document the relationship between a clearing member and its client for purposes of clearing OTC derivatives transactions across clearing houses that use the principal-to-principal client clearing model. Further to a consensus in the market and among its members, the FBF has decided to adapt this Addendum to French law requirements and FBF environment. A dedicated working group has been set up among FBF members and coordinated by Jones Day's Derivatives and Market Infrastructures team in Paris.

The Addendum and the French Law Annex, including its two Appendices (the "French Law CSA Collateral Terms" Appendix and "Tax Provisions" Appendix), are designed to be used as a supplement to an FBF master agreement in order to constitute a self-standing set of documentation for cleared transactions. In that way, the documentation of non-cleared derivatives transactions governed by the same FBF master agreement is not affected.


The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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