Linklaters Advises on Launch of European Agent Trustee Model for Client Clearing

Linklaters advised the Futures Industry Association (FIA) and a group of major banks and clearing houses, including Bank of America, Barclays, Citi, Goldman Sachs, J.P. Morgan, LCH Ltd and Eurex Clearing, on the development and implementation of the European Agent Trustee Model (EATM). The EATM is an alternative client clearing model in Europe designed to broadly replicate the Futures Commission Merchant clearing model used in the United States, with the objective of increasing the clearing capacity of globally systemically important bank clearing members, particularly for over‑the‑counter derivatives. The model represents the culmination of a multi‑year project and has been implemented in English law and a German law version. Today the new model went live at LCH Ltd for its SwapClear service. Under the EATM (English law), UK‑based clearing members of SwapClear can offer the model to their clients irrespective of the clients’ location. The EATM permits clearing members to enter trades with a central counterparty (CCP) on behalf of their clients and to hold those trades on trust for them. This contrasts with Europe’s predominant principal model, under which clearing members act as financial intermediaries between their clients and the CCP. Linklaters represented the FIA, Bank of America, Barclays, Citi, Goldman Sachs, J.P. Morgan, LCH Ltd and Eurex Clearing with a team composed by: Michael Voisin, Capital Markets Partner; Sarah Willis, Capital Markets Counsel; Hannah Pilkington, Managing Associate; Megan Gosling, Associate; Tax Partners Rhian Parker and Gabriel Grossman; Tax Counsel Ulrich Johann and Omer Harel; Trusts Counsel Leah Parry. Work on the German law version of the EATM was led by Capital Markets Partner Burkhard Rinne and Capital Markets Counsel Marc Voelcker. Both the English and German law versions brought together legal expertise from England and Wales, Germany, the United States and other jurisdictions.

Linklaters Advises on Launch of European Agent Trustee Model for Client Clearing

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