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Black Swan Event Alert

  • Hong Kong
  • Banking and finance

23-01-2015

Last week, the Swiss National Bank (SNB) removed the €1.20/CHF peg. This took the FX markets by complete surprise, and caused a dramatic spike in the value of the Swiss Franc.

The full scale of that fallout remains to be seen. Cafsualties include a major hedge fund which reportedly suffered nearly US$1 billion in FX losses. Such heavy losses would almost certainly be linked to derivatives exposures.

Directors of insolvent companies will have obligations to creditors. Creditors may have concerns about exposure and solvency of their trading partners. Handling derivatives contracts can be daunting, and the repercussions are enormous if you get it wrong.

As our valued client, we would like to provide you with a concise 10-step practical guide to "Closing Out ISDA contracts". To view the guide, please click here. Please note that this guide is for information purposes only, and legal advice should be sought for specific situations.

Eversheds Sutherland are recognised as a leading insolvency practice in Hong Kong, with particular expertise in closing out derivative contracts, complex securitisation structures, or other complex financial products. If you have any questions, please contact Kingsley Ong, from our Hong Kong office or Damian Mueller from our Swiss office.

Kingsley Ong, Partner

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