Setting new standards

The publication of a new master agreement governing over-the-counter derivatives trading activity onshore in China in mid-March will go a long way towards improving the legal operating environment. But several important elements are unresolved and present risks for banks and their counterparties. Kathleen Kearney reports

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China's National Association of Financial Market Institutional Investors (Nafmii), a trade association set up by the People's Bank of China (PBOC), published a new master agreement for the trading, settlement and netting of onshore over-the-counter (OTC) derivatives traded in the Chinese interbank market in mid-March - nearly 10 months ahead of some predictions.

The new agreement is much more than an amalgamation of its Nafmii predecessor published in 2007 and a master agreement published by

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