Derivatives and ISDA This course is presented in London on: 22 March 2018, 10 October 2018 The Banking and Corporate Finance Training Specialist
Course Objectives Participants will: Get an overview of what derivatives are, including the aspects and the types of risks hedged Be introduced to how derivatives are traded Have explained to them the different types of derivatives including swaps and equity & credit deriviatives Course Overview Learn about ISDA documentation with ISDA definitions and ISDA Credit Support Annexes and Credit Support Deeds Be appraised of the financial collateral regulations and pertinent Background of the trainer Trained as a lawyer, the trainer has over 19 years experience in international banking and structured finance transactions, including real estate finance, loans, leverage finance, debt capital markets, securitisation, structured products, repos, derivatives and financial regulatory and compliance. She has been actively involved in the creation of innovative award winning structured transactions and negotiating complex financings. She has advised global institutions such as Credit Suisse, Citigroup and Goldman Sachs and spent many years practicing law at Allen & Overy LLP, Linklaters and Sidley Austin Brown & Wood in multiple jurisdictions including London, New York, Hong Kong, Singapore etc. She holds a Law LLB (Hons) degree from University College London and has worked in the Finance Know-how team at Clifford Chance. She is an author and now runs her own business advisory, training and legal consultancy. Course Content Introduction: Derivatives overview What are derivatives? Legal concerns: Gaming laws Insurance laws Types of risks hedged: Currency risk Interest rate risk Commodity risk Weather risk Inflation risk Mortality risk Credit Risk Regulatory capital and balance sheet treatment Synthetics How are derivatives traded? Over the counter (OTC) Exchange traded
Types of derivatives Swaps Interest Rate Swaps Interest Rate Caps Interest Rate Floors Interest Rate Collars Currency Swaps Options Strike price Call Option Put Option European Style Option American Style Option Bermudan Style Option Forwards and Futures Equity derivatives Credit derivatives Reference Entity Reference Obligations Credit Events Swaptions Total Return Swaps Commodity derivatives Property derivatives Mis-selling of Swaps Claims under English Law Economic climate since 2007 s166 FSMA Review Types of Claims Breach of Statutory Duty s138d FSMA: FCA COBS rules Contract Advisory relationship Tort Duty of care Misrepresentation Misrepresentation Act 1967 Tort Negligence Tort - Fraudulent Implied Contractual Estoppel Limitation Case law ISDA Documentation Introduction The ISDA Architecture of the ISDA documentation 1992 multi-currency cross-border version 1992 local currency single jurisdiction version 2002 version Summary of the ISDA documents and protocols
ISDA Definitions 2006 ISDA Definitions 2005 ISDA Commodity Definitions 2014 ISDA Credit Derivatives Definitions 2011 ISDA Equity Derivatives Definitions 1998 FX and Currency Option Definitions ISDA Credit Support Annexes and Credit Support Deeds Legal opinions English law deeds and annexes New York law annexes 1995 ISDA Credit Support Annex Close-out netting Valuation agent Eligible Credit Support Haircuts and Valuation Percentages Financial Collateral Regulations Title transfer Ring fencing Close-out netting on insolvency Pertinent Issues: Mark to market valuations and Netting Insolvency Section 6(e) Early Termination and Events of Default Steps to be taken Commercial considerations Netting legal opinions ISDA 2014 Collateral Agreement Negative Interest Protocol Tax Tax representations and undertakings Tax event Counterparty issues Legal capacity Limitations in constitutional documents Case law Hammersmith & Fulham Credit Suisse International v Stichting Vestia Groep Documenting Derivatives in Loan Transactions Key Features of a Structured Loan Loan and ISDA Documentation Events of Defaults Additional Termination Events Specified Entities Notional Reductions Collateral
Upcoming Changes EMIR Purpose Increase stability Standardisation Risk mitigation Scope of EMIR Counterparties CCPs Trade repositories Exemptions Outline of obligations imposed Clearing obligation Reporting obligation Risk mitigation requirements New Margining Requirements 2016 Variation Margin Protocol ISDA SIMM The Clearing Obligation what products are covered EMIR Clearing Obligation overlap with MiFIR Timeline of implementation MiFID II and MiFIR Purpose Transparency Oversight Scope Regulated trading venues OTFs MTF Broadens scope of MiFID Impact on derivatives Trading on regulated markets Information to investors Limits on commodity trades Level 2 measures Timeline of implementation MAD II Purpose Replaces MAD Extends market abuse regime Scope Includes spot commodities Expands definitions Timeline of implementation Section 2(a)(iii) Lomas and others v JFB Firth Rixson Inc. and others ISDA Amendment
US Reforms Dodd Frank Act Title VII US Person FATCA Information reporting Withholding tax Affected parties Payments affected in derivatives trades Implications of Brexit Course Summary This Derivatives and ISDA course provides full coverage of the important aspects of derivatives trading. It is relevant for in-house lawyers and private practice lawyers alike, traders and bankers involved in complex structuring involving swaps, ISDA documentation teams, operations teams that book ISDA trades, compliance personnel responsible for ensuring that all regulations relating to ISDA transactions are complied with as well as accountants who advise clients on swap transactions. The first part of this course sets the scene by giving an introduction to derivatives; what they are, why they are used, who uses them and how they are traded. We then go through the various types of derivative products in the market showing the potential of the use of derivatives in a wide range of product sectors. We also cover the claims for mis-selling of swaps under and the relevant claims and case law under English law. The second part of the course covers the workings of the derivatives market and the trade association, ISDA. We then go through the ISDA documentation framework including coverage of the ancillary ISDA documentation. We then cover the pertinent issues in ISDA documented trades such as netting, mark to market valuations, negative interest rates, events of default and early termination to name a few. We will then discuss how to document derivatives in loan transactions and cover some English law cases. The third part of the course will cover the upcoming EU regulatory changes effecting derivatives with a timeline on what to expect when. We will go through how the banks and law firms should prepare for such changes with practical guidance where appropriate. Additionally, we will also cover some of the more pertinent US regulatory changes that will impact derivatives trading in the UK. We then round off with a discussion on the implications of Brexit on derivatives transactions and documents. Please note that this section is subject to change depending on the time of the year this training course is delivered as per the regulations and guidance that are published from time to time. 09:30-17:00 London Standard Price: 625 +VAT Membership Price: 500 + VAT Delivering this course in-house for you to a number of participants could be very cost effective.