We advise and counsel many types of clients around the globe on a wide variety of issues with respect to all categories of over-the-counter (OTC) and exchange-traded derivatives, including equity, debt, credit, commodity, interest rate, currency, and weather derivatives. Our clients include public and private corporations, broker-dealers and other financial institutions, pension funds, hedge funds, Futures Commission Merchants (FCMs), Introducing Brokers (IBs), Commodity Trading Advisers (CTAs), mutual funds and other regulated and unregulated investment funds, municipalities, governmental and quasi-governmental entities, trade associations, endowments, executives, and other high-net-worth individuals.
Whether the client is an end user of a derivative product or the creator and marketer of a derivative product, our attorneys have the transactional and regulatory insight necessary to structure, document, and facilitate a trade within the time constraints mandated by these market-sensitive instruments.
We are particularly active in using derivatives to aid clients in hedging risks, monetizing assets, and acquiring and financing the acquisition of assets on favorable terms (both with and without the benefits of leverage), including the financing of equity and debt repurchase programs of issuers. In addition to counseling on stand-alone derivative products, we advise clients with respect to securitizations and financial instruments containing embedded derivatives, such as equity-linked notes, convertible securities, and other hybrid products. We also advise on securitization/derivative crossover products such as trades relating to ABS indices.
The derivative group frequently provides advice to clients on:
- Issuer puts, zero-strike call spreads, sub-VWAP trades, equity forward purchases, collared and uncollared accelerated stock repurchases (ASRs), and other issuer-related derivatives when clients wish to conduct stock repurchase programs
- Conducting competitive bids when end-user clients want to enter into derivatives with financial institutions
- Leveraged and unleveraged total return bond swaps and bond puts when clients are interested in repurchasing their publicly traded debt
- Puts, calls, covered calls, collars, prepaid variable forwards, postpaid variable forwards, and other equity derivatives when clients seek to hedge the risk associated with owning a stock and seek to monetize the stock in a tax-efficient manner, or when clients are employing a “portable alpha” strategy
- Credit default swaps, equity default options, and total return swaps when clients seek to reduce or gain exposure to the credit of another entity
- Interest-rate caps, collars, floors, interest-rate swaps and swaptions, spot and forward foreign exchange contracts, currency options, and currency swaps and swaptions when clients want to adjust their interest rate and currency exposures
- Commodity swaps and hedges when clients want to adjust their exposure to a commodity
- Stock loans
- Prime brokerage agreements
- Repurchase (repos) and reverse repurchase agreements
- Collateral, netting, and insolvency issues relating to derivatives
We have helped regulated and unregulated entities develop compliance procedures with respect to the utilization and marketing of derivative products in order to reduce both reputational and legal risk. Our command of the broker-dealer regulatory landscape enhances our transactional experience in this regard.
We have litigated disputes relating to derivatives, repos, and reverse repos.
Our attorneys have advised clients on billions of dollars of derivative transactions and in the development of new derivative products. Members of the practice are active in major derivative trade organizations (such as ISDA) and regularly contribute to industry publications and speak at industry seminars.