4 - The Regulatory Framework for Mis-selling Claims

Summary

Paradigmatic mis-selling claims involving OTC derivatives are based upon contract and tort law. Those types of claims, and the defences routinely deployed against them, are explored in subsequent chapters. We shall see in those chapters, as in later parts of the book, how the specialist mode of contractual interpretation adapted to the derivatives markets is integral to every stage of such claims. In many cases, in fact, it is decisive. However, the paradigmatic claims arising in this part of the financial markets are important not only for their own sake and for commercial law more broadly, but also because of how they relate to the regulatory rules in place to protect participants in the OTC derivatives markets, which is the concern of this chapter. In particular, as this chapter shows, the limitations of the regulatory schemes of redress in this context commensurately increase the significance of the private law claims explored in the remainder of this study.