Holes in the net: lawyers split over China netting opinions

Law firms are offering close-out netting opinions, but not everyone agrees it is possible

It has been a banner 12 months in the Chinese derivatives market, with foreign investors now able to access onshore interest rate and foreign exchange derivatives for hedging purposes, while the credit default swap market is finally starting to take shape.

But for the international banks facilitating many of these trades, a major hurdle still remains: a lack of close-out netting, which would allow amounts owed to be offset on default and capital requirements to be reduced. While lawyers and

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