Private International Law Aspects of Derivatives Contracts Involving DLT

These four papers consider the private international law, or conflict-of-law, aspects of derivatives contracts involving distributed ledger technology (DLT), commonly known as blockchain technology.

The development and implementation of new technologies such as DLT within the derivatives industry have the potential to create a more robust financial markets infrastructure, achieve operational efficiencies through increased automation and reduce costs for market participants.

As these technologies mature, it is important to understand the evolving legal treatment of derivatives traded on DLT platforms. Given the novel complications over where data, assets and even counterparties are located in a DLT environment, it is useful to examine key questions on how to determine which law applies and how to evaluate conflicts of governing law. While some jurisdictions have produced analysis on areas of perceived legal uncertainty, these issues remain untested in many of the jurisdictions and cross-border environments important to the derivatives industry.

In January 2020, ISDA, R3, Clifford Chance and the Singapore Academy of Law jointly published Private International Law Aspects of Smart Derivatives Contracts Utilizing Distributed Ledger Technology. That paper considered the private international law, or conflict-of-law, aspects of derivatives contracts governed by the laws of England and Wales or Singapore involving DLT.

As a result, ISDA (in association with R3 and local counsel) has published additional papers that consider these issues from French, Irish, Japanese and New York law perspectives.

Read the papers and a jurisdiction comparison table by clicking on the PDFs below.

Global Trading in INR Derivatives

Global trading in derivatives involving the Indian rupee (INR) has expanded significantly over the past decade, reflecting the currency’s growing role in international hedging and trading activity. According to the Bank for International Settlements (BIS) Triennial Central Bank Survey, the...

Response to FCA on Commodity Derivatives Clearing

On April 9, ISDA, the Commodity Markets Council Europe (CMCE), Energy Traders Europe (ETE) and FIA jointly responded to Chapter 7 of the UK Financial Conduct Authority’s (FCA) Quarterly Consultation CP26/8 on increasing the clearing threshold for commodity derivatives under the UK...

Response on EC’s SFR Proposal

On April 9, ISDA published technical comments on the European Commission’s (EC) proposed Settlement Finality Regulation (SFR) as it applies to designated EU systems and registered third-country systems. One significant concern is that the scope of insolvency protections provided to...