Expanded seminar description
The financial crisis of 2008 showed the inefficiency and the high volatility of financial instruments designed with the initial aim of minimising risk to participants, and with intended stability and the integrity of the national financial system at heart. The relevance of the theme of the event is directly linked to current trends in capital markets, which are deep in crisis and turmoil. 'Over-the-Counter' (OTC) derivatives are designed to operate as a form of would-be insurance for financial transactions where traditional legal remedy cannot marshal, and this includes operations to do with interest rates, default risk, exchange rate risk, economic indicator interplay, contract management issues, and more. Moreover, an effectively functioning system of financial derivatives should be there to contribute to the improvement of the financial infrastructure of the economy and free up financial resources for investment. The volume of the exiting market of OTC is significant; in December 2014, the nominal value of OTC derivatives was $630 trillion, with a market value of almost $21 trillion.
The aim of the seminar is to present the experience of other jurisdictions in the field of regulating the OTC derivatives market, as well as discussion of issues related to reforming Russian legislation in this area. On the agenda is the question of the adaptation of legal regulation of financial systems to crisis phenomena in the economy, as well as increasing 'stress tolerance'. In this regard, the seminar will assess the experience of foreign law aimed at improvement both in terms of transparency and also in terms of obligation fulfillment as regards the OTC derivatives market.
There is currently a trend toward unification (global and regional) of legislation on derivative instruments, and the organisers of the seminar aim to look at the regulation of derivatives in the context of globalisation, regulatory models, their compatibility with national financial practices, and traditional dogmatic structures. As a result it is planned to either formulate the criteria necessary for transplantation of advanced institutions or to create the background for the diffusion of regulatory models.
Content on foreign regulation will be presented by leading cross-border experts on financial market law. And so, the experience of the USA will be covered by Harvard University Professor Hal S. Scott, leading legal expert on finance and securities. The experience of Hong Kong and other Asian jurisdictions that demonstrate rapid dynamic growth regarding financial indicators will be disclosed in the report of Douglas Arner, the direct, first-hand creator of the regulatory model that has made the Hong Kong financial miracle possible. European regulation will be discussed in detail by Professor Theodore Bauman, Director of the Institute of Law and Finance at the Geothe University of Frankfurt, Germany and also Professor Patrick Leyens, Erasmus University, Rotterdam, and the Max Planck Institute for Comparative International Private Law, Hamburg. In the discussion of the practical experience of European regulatory models, we also look forward to the participation of Professor Jens Ekkenga of the Universities of Giessen and Frankfurt, Germany, and also Martin Glajch, Senior Advisor at the Československá Obchodní Commercial Bank, Czech Republic.
The seminar aims to address problems of legal regulation of OTC derivatives not only from a theoretical point of view, but also in the context of specific initiatives of the Central Bank of Russia, which aims for the establishment of a Central Counterparty Institution. The seminar will be attended by first Deputy Chairman of the Central Bank of Russia, Sergey Shvetsov, and the Director of the Department for the Development of Financial Markets, Elena Tchaikovsky, together with other Central Bank officials. The workshop will specifically discuss the possibility of building Russian regulatory models based on either the extension of the administrative requirements governing the provision of OTC derivatives, or the creation of economic incentives to move transactions through the Central counterparty. The seminar will also discuss in detail the legal aspects of agreements pertaining to the interrelation of the derivatives transaction parties and the Central counterparty.