1. Russian derivatives regulations – developments and outstanding challenges Andrei Murygin 11 September 2012

2. 1 Model Provisions (M.P.) 2011 – Principal changes ―Mandatory Terms which cannot be changed – this is necessary to fix compliance of the M.P. 2011 Master Agreement with the netting law requirements; ―Russian Cross-currency definitions added; ―Commodity definitions finalised: to be published soon; ―Registration with repository and nomination of the Notifying Party;

3. 2 Principal changes (contd) ―Range of transactions extended to cover additional DFI asset classes: a)inflation rates; b)more commodity derivatives; c)credit default products and CDS; d)margin payments; e)contracts which are not DFIs and “the subject-matter of which is cash and/or securities” and which are settled on T+3 plus – money market?

4. 3 Migration to M.P. 2011 ―New agreements – use M.P. 2011 for netting purposes; ―Old arrangements – re-execute on M.P. 2011 terms but watch elections made in 2009 M.P. if they do not affect the “Mandatory Terms”; ―Existing Master FX and MM Agreements – NFEA developed a standard Transition Agreement referencing M.P. 2011 and replacing those clauses which may contradict “Mandatory Terms”? ―All forms: add registration and alteration language to cater for the anticipated FSFM repository registration regulations.

5. 4 Collateral ―“Contracts for payment of floating margin amounts” are included in the basic DFI list in the Master; ―Form of Margin Agreement - collateral is not treated as alternative security arrangements anymore; ―Improves chances of inclusion in Close out Amount; ―M.P. 2011 registered by the FSFM; ―Does it improve enforceability of collateral in the absence of statutory recognition of margin payments in the SML? ―Proposed Civil Code and SML changes

6. 5 More Civil code changes ―Pledge of bank accounts; ―Recognition of physically settled options; ―Proposed extension of exemption in Article 1062 (2) to cover foreign banks, IFOs;

7. 6 Court practice – adverse cases 1.Unicredit case – corporate client challenged M.P. 2011 termination clause and walked away 2.Sony Ericsson case - HAC prohibited unilateral submission to courts: arbitration only for cross-border trades?

8. 7 Questions ?