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Clifford Chance

Briefings

European Court of Justice provides its first ever ruling on 'possession or control' under the Financial Collateral Directive

21 November 2016

Four years after Briggs J's judgment in the case of Re Lehman Brothers International (Europe) (in administration) [2012] EWHC 2997 (Ch) (Re LBIE), the Court of Justice of the European Union (CJEU) has given its first ever ruling on the question of what constitutes "possession or control" of financial collateral under the Financial Collateral Directive (FCD) following a referral on questions of EU law by the Supreme Court of Latvia.

The CJEU's judgment does not materially advance the current English law position on this vexed question. However, the CJEU's responses to the Latvian court leave open a number of important issues that will do little to allay concerns of market participants and practitioners about the extent of legal uncertainty in this area.

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European Court of Justice provides its first ever ruling on 'possession or control' under the Financial Collateral Directive

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