Legal Derivatives School

Transcription

1 IN HOUSE Legal Derivatives School An intensive modular training course Euromoney Legal Training and this course are neither endorsed by nor affiliated with ISDA Directed by leading International Financial Lawyer Schuyler K Henderson, this course is presented in a modular format. You can choose to attend the whole course or pick from the following modules: Module 1: Legal and Documentary Issues in Swaps and other OTC Derivatives Module 2: Documenting Equity Derivatives Module 3: Credit Derivatives Legal Issues and Documentation Module 4: Legal Issues in Derivatives and Structured Notes, Prime Brokers and Central Counterparties UPDATED By attending this course you will: Gain essential hands on experience of documenting swaps and other derivatives Perform intensive and objective analysis of 1992 and 2002 ISDA Master Agreements, 2002 ISDA equity derivatives definitions and 2003 credit derivatives definitions, and related master confirmations Protect your organisation against potential problem areas such as default, capacity, insolvency, enforcement, regulation and tax Learn to structure agreement fixes to ISDA Agreements Understand the principles of derivatives in structured financings Learn about new credit derivative developments: Determination Committees and auctions Learn about prime brokers, central counterparties and the new derivatives regime in the US and Europe ISDA is a registered trademark of the International Swaps and Derivatives Association Follow us online for all the latest course, business and market news!

2 Since 1990, Euromoney Training, in association with Schuyler K Henderson, has organised this highly successful course on the legal concepts in derivatives and the documentation of derivatives transactions using the ISDA Master Agreement. After attending this course, you will be familiar with what swaps are and how they work how to understand and use the 1992 and 2002 ISDA documentation the significance of key clauses in the ISDA agreements how to draft clauses to meet special situations how to deal with insolvency and set-off the risks in credit exposure and techniques for credit enhancement how to assess the capacity of the counterparty the main tax issues and their significance key issues for consideration in the credit support annex cross product netting the significance of appropriateness and suitability rationale, tricks and risks in structured financing synthetic investing off balance sheet structures structured notes legal structure, key terms, documentation and risks in credit derivatives, equity derivatives and other complex derivatives documentation and risks in prime brokerage structures the relationship between derivatives and the credit crunch legal structure, key terms, documentation and risks in Central Counterparties, including case studies Excellent training... It is very useful for lawyers who deal with ISDA documents Lawyer, DNC COURSE OVERVIEW Swaps and derivatives have become more and more complex every year, and have come under close regulatory scrutiny. Products such as credit derivatives and equity derivatives and the use of derivatives in financing structures pose particularly interesting and significant issues. New laws and regulations are changing the practices and conventions of the OTC derivatives market. The advanced modules of this course focus on these issues and are specifically designed for delegates who have mastered the basic issues but are facing the challenges of these new and complicated applications. As the range of users and applications of swaps and derivatives increase, so the legal and documentation problems become more difficult and require ever-more sophisticated techniques. This 5-day course fully explains the legal aspects of swaps and derivatives and derivatives in structured financing. You will gain a complete understanding of the key legal issues in swap documentation, and in particular the important problems of default, insolvency and enforcement. ABOUT US Euromoney Training courses are designed for ambitious professionals who wish to gain practical skills based knowledge. With offices located in Asia, Europe and the USA and as part of the global media group, Euromoney Institutional Investor PLC, we are in the perfect position to provide you with relevant, up-todate and international expertise. With an extensive range of legal, financial and audit training courses we have met the training needs of over 40,000 market professionals globally. Our courses are held on a public or in-house basis, a full list of which can be found on our website. Visit www. euromoneytraining.com/ldschool. Find out how in-house training can save you both time and money. courses@euromoneyasia.com or call PREREQUISITES Attendees of Module Two, Three and Four should have attended Module One or have equivalent experience. EXCLUSIVE COURSE DOCUMENTATION This programme will provide you with comprehensive course documentation written by an experienced market practitioner. This material is not available anywhere else and will provide an invaluable reference guide both during and after the course.

3 Agenda Legal Derivatives School An intensive modular training course WHO SHOULD ATTEND? In-house lawyers in banks and securities houses Bankers involved in complex financings using swaps and derivatives Senior documentation staff Compliance officers Lawyers in private practice Bankers who want to know more about legal issues Accountants who have to document and advise on swap transactions Lawyers with corporations and fund houses Lawyers working for corporations, governments and financial institutions Lawyers and accountants in private practice who advise clients on the above categories Module 1 Legal and Documentary Issues in Swaps and other OTC Derivatives The derivatives markets and their uses Key concepts Definitions Description and uses of basic derivatives structures Swaps Fully-paid transactions Hybrid securities Derivatives risk Legal and operational risk Position or market risk Valuation and hedge risk Delivery risk Long term exposure: rate risk and performance risk Quantification of risk Netting and insolvency issues Principles of insolvency Netting: payment and close-out Lessons from Enron and Lehman Brothers Capacity and authority Capacity Hammersmith and Fulham, Piraeus and Korea Life Resolutions and signatories Minmetals Regulation Regulation overview Are derivatives: - Securities? - Illegal off-exchange futures? - Gaming contracts? - Insurance contracts? Capital adequacy requirements Suitability/misrepresentation - Bankers trust cases - Kwiatkowski, Eternity, Caiola and Korea Life; PowerTel The new US regulatory regime Direct taxation in another jurisdiction Withholding tax ISDA structure FASB and IASB: effect on end-users and dealers Tax and accounting issues Need for documentation, ISDA structure and choice of one or more masters Avoiding uncertainty Financial provisions: definition booklets Legal, trading and credit provisions; master agreement Evolution of ISDA documentation: Architecture of documents Fitting together the ISDA components One master for all products/offices? DAY 2 ISDA Master Agreement Sections 1-4 ISDA Master Agreement Sections 5-6 Grounds and procedures for termination How to calculate close-out values Soc Gen vs. ANZ, Nuova Safim and Peregrine; high risk and Peregrine II Voluntary terminations and section 7 transfers Section 7 ISDA forms Negotiated terminations ISDA Master Agreement Sections 8-14 Credit enhancement Guarantees, collateral and rehypothecation CSA: completing paragraph 11/13 Copyright Euromoney Training 2011 Confirmations Oral trades, confirmations and confirmation process; backlogs Confirmation workshop Course Director Schuyler K. Henderson, Financial Lawyer Find out more today! Web Schuyler is a leading International Financial Lawyer. He has represented numerous international financial institutions in the full range of credit extensions, including syndicated lending, letter of credit and guarantee facilities, secured financings, shipping and aircraft financings, securities issuances and derivatives. He has been particularly active in the derivatives market, having acted for one of the participants in the first currency exchange agreement in1977. Since then he has been actively involved in the creation of innovative financial products on behalf of over fifty financial institutions, and is generally regarded as one of the world s leading derivatives lawyers. His practice has regularly included: developing new products; structuring, drafting and

4 Module 2 Documenting Equity Derivatives Module 3 Credit Derivatives Legal Issues and Documentation Equity derivative products Options, swaps and forwards Portfolio swap Equity-funding deposit swap Other uses: Perry; Marconi; Enron; parking own stock 2002 equity derivatives definitions: overview Prior forms Topics User s guide Options Exercise Settlement Forwards Prepayment Variable obligation Swaps Price return Total return Barrier features Knock-in/out prices Settlement Settlement method election Cash Valuation Averaging dates Disruption days Physical Settlement disruption Multi-jurisdictional issues Adjustments and extraordinary events Index adjustments Merger event and tender offer Nationalisation, insolvency and delisting Consequences Additional disruption events Description Cancellation and payment Confirmations and process Regional master equity derivatives confirmation agreements Description of credit derivatives market Scope and size Participants Significance Tensions Credit derivatives: the legal structure Swap Option Embedded security (credit-linked notes) Transaction types: default products, total return swaps, yield products Payment: Price differential, physical delivery, total rate of return, credit spread, agreed amount Uses and risks Buyer of protection Seller of protection Dealing instrument Basis risk issues Are you getting what you think you are getting? Documentation structure and issues ISDA structure Detailed analysis of 2003 ISDA credit derivatives definitions Reference entity Credit events and obligations Cash settlement Physical settlement and deliverable obligations Confirmations and special transactions The standard confirmation Other standard forms Backlogs Master credit derivatives confirmation agreements Reference entities Types of deal Types of reference obligation Credit indices (CDX, itraxx, LCDX) Secured loans (LCDS) Recent litigation Selected legal issues Close-out netting with other derivatives Insurance issues Disclosure under securities laws Gaming issues Withholding tax Capital Use of credit derivatives to reduce capital requirements Basel II The Big and Small Bangs Determination Committees Auction process Synthetic securitisation Rationale Structure negotiating complex financings, including repackagings, credit-linked securities and tax or regulatory driven structured transactions; preparation of standard form ISDA documentation (including for use with specialised counterparties and confirmation templates for virtually all types of derivatives); supervision of backlog documentation; provision of regulatory, enforcement and tax advice in respect of over 30 jurisdictions; enforcement of derivatives documentation, representation of parties in disputes involving derivatives; and establishment of derivatives dealers in a number of jurisdictions. Schuyler is the author of numerous publications on financial topics, and is a member of the Editorial Advisory Board of Butterworths Journal of International Banking and Financial Law. He is a regular speaker and chairman at various conferences on international finance in many international financial centres.

5 IN HOUSE Module 4 Legal Issues in Derivatives and Structured Notes, Prime Brokers and Central Counterparties Principles of structured derivatives Tricks Indexed security Currency option built into loan Embedded derivatives: principal protected/unprotected Issuing vehicles: programme issuers, SPEs and rating agencies Structured notes Reverse floaters: embedded swap - Leverage Credit linked notes: embedded credit default swap - Broad selections - Exposures Commonly overlooked exposures Structured issuers SPE issues - Credit supplied independent of originator Rating agency requirements Enron structures Monetized put and call: deferred sale of securities - Hedge issues Transformer companies Repackaging: yield enhanced note based on asset swaps - Clean, yield-enhance note; complexity at issuer level - Credit issues The ISDA Master Agreement in structured transactions Rating agency requirements Termination close-out calculations: default or external illegality or tax - Commonly overlooked issues The developments leading to central counterparties Dealer dominance and standardized terms Transaction facilitators: DTCC, Markit, Creditex Master confirmation agreements The 2005 Fed initiative and its aftermath The credit default swap market: indices and protocols Electronic platforms Prime brokers Description and issues Duration Give-up and compensation agreements The credit crunch, its causes and its uses US real estate, CDOs AIG The US Dodd-Frank Act The CCPs Europe US Formal incorporation and regulation Risk committee Documentation Relationships: who is your counterparty? Margining Guaranty fund Case studies ICE LCH.Clearnet CME Issues and discussion Lack of flexibility Oligopoly Concentration of risk Legal jurisdiction Liquidity Course concludes This course is an objective and impartial analysis of ISDA documentation. CONTINUING PROFESSIONAL DEVELOPMENT You may use your attendance at courses held by Euromoney Legal Training to qualify for CPD points with The Law Society of Hong Kong. If you wish to claim CPD Hours for your registered course, please inform us of this upon registration and pay one month in advance in order for your CPD application to be processed. For further information on CPD accreditation please us on courses@euromoneyasia.com An informative and useful course which stipulates important concepts and insights Head of Wholesale Bank Legal, Standard Chartered Bank (Taiwan) SAVE TIME AND MONEY WITH IN-HOUSE TRAINING In-house training is an efficient and cost effective way to ensure that your employees are equipped with the knowledge and skills needed to make a real impact in your organisation. Training can be arranged for anything from small groups to entire divisions and will take place at a time chosen by and convenient to you. For more information on holding this, or any other Euromoney Training course in-house, please contact: Hayleigh Davies, Division Manager, Legal Training Tel: inhouse@euromoneyasia.com Telephone Facsimile courses@euromoneyasia.com

6 Legal Derivatives School An intensive modular training course Please quote reference INHOUSE 1. Web legal_asia Telephone Facsimile Mail GPO Box 11886, Hong Kong Please tick which best describes your company: Asset Management Brokerage Commercial / Investment Bank Corporate Export Credit Agency (ECA) Government / Supranational / Central Bank Hedge Fund Insurance and Reinsurance Law Firm Pension Fund Private Bank Private Equity Retail Bank Venture Capital Company Other Enquiry form Yes, please register me for: Contact details (all of the following is required to process your enquriy) Legal Derivatives School (5-day) Surname Mr/Mrs/Ms Module 1: Legal and Documentary Issues in Swaps and other OTC Derivatives (2-day) Module 2: Documenting Equity Derivatives (1-day) Module 3: Credit Derivatives Legal Issues and Documentation (1-day) Module 4: Legal Issues in Derivatives and Structured Notes, Prime Brokers and Central Counterparties (1-day) First name Position Department Company Address If you would like a quote for an in-house course for your organisation, we ll need to know Number of staff that require training: City: Preferred date: Delegate job titles: What you hope to achieve: Telephone How did you hear about the course? I prefer course updates by . My address is. Please fax back to or your details to update@euromoneyasia.com. Please include the code that appears on top of the address label above in your . Fax Disclaimer Euromoney Training reserves the right to alter any part of the published programme or faculty. In the event of course cancellation by Euromoney Training due to unforeseen circumstances, Euromoney Training limits its liabilities to refunding the tuition fee of the course. Fee includes tuition, documentation, lunch and refreshments. Delegates are responsible for their own flights and accommodation. An invoice will be sent upon receipt of registration form. A Euromoney Institutional Investor group company Data protection The information you provide on this form will be used by Euromoney Institutional Investor PLC and its group companies ( we or us ) to process your order and/or deliver relevant products/services and content. We may also monitor your use of our website(s), including information you post and actions you take, to improve our services to you and track compliance with our terms of use. Except to the extent you indicate your objection below, we may also use your data (including data obtained from monitoring) (a) to keep you informed of our products and services; (b) occasionally to allow companies outside our group to contact you with details of their products/services; or (c) for our journalists to contact you for research purposes. As an international group, we may transfer your data on a global basis for the purposes indicated above, including to countries which may not provide the same level of protection to personal data as within the European Union. By submitting your details, you will be indicating your consent to the use of your data as identified above. Further information on our use of your personal data is set out in our privacy policy, which is available at www. euromoneyplc.com or can be provided to you separately upon request. If you object to contact as identified above by telephone, fax, or , or post, please tick the relevant box. If you do not want us to share your information with our journalists, or other companies please tick the relevant box. Cancellation policy If any registered delegate cannot attend our course, a replacement is always welcome for the course. Cancellations must be made in writing (letter or fax) with Euromoney Training s acknowledgement. Written cancellations must reach this office 30 days before the programme commences. A full refund less an administration charge of US$150 will be given. For any written cancellation requests that reach us less than 30 days before the event, no refunds will be given. However, if you wish to attend another Euromoney Training course in the Asia-Pacific region, a 75% discount voucher which values not more than 75% of the initial payment will be issued. Please note that the subsequent course must take place within 1 year of the initial registration. Discount vouchers are transferable within the same organisation, but not to be used in conjunction with any other discount schemes. Discount vouchers will not be issued for no-shows without cancellation. Euromoney Training reserves the right to the final decision if any dispute arises. Incorrect mailing Please accept our apologies for mail which is incorrectly addressed. Should you wish to amend the address/addressee details, please send or fax us a copy of the relevant mailing label (on the envelope or brochure) and we will update our records accordingly. Copyright Euromoney Training 2011