London-based affiliates seek to maintain parent entity guarantees

By Hazel Sheffield
31 Mar 2014

Major US banks seeking to revoke parent entity guarantees for London-based affiliates have met resistance from counterparties reluctant to give them up. Some of these counterparties are looking at taking a technical reading of Dodd Frank to try and maintain their guarantees while avoiding a US requirement to trade on swap execution facilities.

Deborah North, partner at Allen and Overy in New York, said that the absence of substituted compliance for clearing and exchange trading in Europe has meant that guaranteed affiliates have fallen under the jurisdiction of Dodd Frank. Now that some US banks are looking to revoke their guarantees, counterparties ...

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