Rofex's Dollar Futures Agreements

Author:Mr Pablo Gayol
Profession:Marval O'Farrell & Mairal

On December 15, 2015, Mercado a Término de Rosario S.A. (“Rofex”), one of the largest futures markets in Argentina, and Argentina Clearing S.A. (the “Clearinghouse”), Rofex's clearing house, issued Communiqué No. 657 of Rofex and Communiqué No. 518 of the Clearing house (jointly the “FX Communications”), both with identical terms. The FX Communications declared an emergency in connection with dollar futures' agreements opened as of December 15, 2015 which have been entered into after September 2015 and which have a maturity up to June 2016. In connection with those agreements, the FX Communiqués amended the original agreed price increasing the price by Pesos 1.25 per dollar for those transactions opened between September 30, 2015 and October 27, 2015, inclusive, and increasing the price by Pesos 1.75 per dollar for those transactions opened after October 28, 2015, inclusive.

Certain clients who had open positions affected by the FX Communiqués sent notices to the Clearing house and the Rofex challenging the FX Communiqués and reserving the rights to sue them for the damages caused by the amendment of the agreed terms. These claims are at different stages of the court process, some client have initiated court actions while others only made out of court claims. The affected clients also followed different strategies regarding the type of court action and the parties against whom such actions are addressed. The claims against Rofex and the Clearing house may have an impact not only because of the clients affected but also for the survival of the market since, arguably, Rofex and the Clearing house would not have sufficient funds to pay the full original price under the amended contracts if they are found...

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