On November 10, 2016 the Colombian Central Bank (“CCB”) issued Opinion JDS-24326 regarding registration of derivatives transactions (the “Opinion”). The opinion was issued in the context of commodities derivatives.
The Opinion established the position of the CCB on the correct way to carry out registration of derivatives transactions for the enforceability of close-out-netting of derivatives transactions with Colombian counterparties, under Article 74 of Law 1328 of 2009.
The CCB stated that derivatives transactions may not be reported on a consolidated basis as a single purchase operation and a corresponding sale operation covering all the corresponding transactions; on the contrary, registration must be made on an individual basis for each transaction entered into. According to the CCB, this is intended to ensure the correct tracing of each individual operation, as well as any modifications thereto, and it also enables the close-out-netting under the law.
The Opinion is also important because it helps to reiterate the possibility to register commodities derivatives under Colombian law, with a view to ensuring the correct application of close-out-netting for this type of derivatives.
It is worth mentioning that in March, 2016, the CCB had already modified External Regulation DODM-144 to include an explicit reference to commodities derivatives over prices of the following underlying products (among others): climate and greenhouse gas emissions.