Towards netting in Russia?

Max Gutbrod, Partner, Baker & McKenzie - CIS, Limited

A protracted history with some recent progress

Russia has for quite some time struggled with regulating derivative transactions and taken approaches that, despite using terminology common in the West, differ from other countries. This article highlights developments in the first weeks of 2013 that make it most likely that for a large number of contracts, netting will be available. This is all the more important as bankruptcy legislation and practice has, over the last four years, changed in such a way that netting-like transactions face a greater risk of invalidation. Furthermore, the development of legislation on derivatives has not been very logical. All of this will pose peculiar challenges and opportunities to contractual practice.