Derivative master agreements for renminbi-dominated contracts have been launched in China and they're expected to give greater certainty to the nascent market. The principal agreements, issued last week by the State Administration of Foreign Exchange and China Foreign Exchange Trade System, cover renminbi currency forwards and interest-rate swaps and have been in the works for several months (DW, 6/16).
While most players see the move as a step forward and will attract more domestic accounts, some officials grumble it adds a layer of complexity for international houses. "It's not too surprising for a country that insists on having its own Catholic church," remarked a derivatives head at a bulge-bracket house. He noted the country has decided to go its own way rather than import the standard ISDA master agreements, it will take some time for international houses to become more accustomed to Chinese law for such contracts.
