Russian court ruling worries derivatives industry

03/19/2013 | (subscription required)

A Russian court has allowed a corporation to terminate a five-year interest-rate swap with UniCredit early without requiring an early-termination fee, which has left industry members questioning the future of swaps trading in the country. "This is a very worrying development, demonstrating that a Russian court may lack sophistication and the ability to appreciate the commercial rationale of complex financial transactions," said Konstantin Kroll of Jones Day. The case raises questions as ISDA prepares to publish an opinion on whether netting of trades should be allowed in Russia.

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