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Central counterparties (CCPs) and the law of default management

Murphy, David and Braithwaite, Jo (2017) Central counterparties (CCPs) and the law of default management. Journal of Corporate Law Studies, 17 (2). pp. 291-325. ISSN 1473-5970

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Identification Number: 10.1080/14735970.2016.1254448


This article explores the legal framework around the process of ‘default management’ and explains its significance in the setting of central clearing. Having contextualised the discussion by considering central counterparties (CCPs) as default managers, and examined the safe harbours that CCPs enjoy from various provisions of insolvency law, the article considers the legal challenges arising along a ‘default timeline’ consisting of three different stages: declaration of default; close out; and collateral management. It finds that even in the context of central clearing, where robust default management is now of systemic importance to the financial system and the law is generally supportive, material risks remain and must be accounted for. The article suggests that while some of these risks may be mitigated by the parties, others require action from legislators, so addressing the fragmentary nature of the framework governing CCP default management should be a legislative priority.

Item Type: Article
Official URL:
Additional Information: © 2017 Informa UK Limited, trading as Taylor & Francis Group
Divisions: Law
Subjects: K Law > K Law (General)
Date Deposited: 26 Sep 2016 13:09
Last Modified: 20 Sep 2021 03:03

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