Derivatives

Chapman’s derivatives practice attorneys represent a broad spectrum of market participants on both sides of the market.

Our derivatives work covers a wide array of products, underlying asset classes and governing regulatory regimes. As a result, our practitioners have a unique understanding of the competitive and regulatory landscape and an awareness of the special concerns that often arise in various transactional scenarios.

Expansive Transactional Range

We regularly assist our clients with structuring and documenting transactions involving derivatives and related trading and financing instruments, including cleared and over-the-counter swaps (and security-based swaps), futures, various strategies involving the use of options (including FLEX options), forwards, bilateral and cleared repurchase transactions (including FICC sponsored member transactions), prime brokerage arrangements, mortgage-backed and asset-backed securities, event-driven transactions, and other forms of bespoke financial market instruments. We represent parties in securitization, structured finance, and financing transactions. We also have extensive experience negotiating derivatives in finance transactions involving municipal and other governmental entities.

Regulatory Insight

Chapman lawyers are well-versed in regulatory matters such as financial reform legislation in the US and overseas, registration and membership with the CFTC, NFA, SEC, and other financial market utilities, cross-border access issues, and matters involving the overlapping jurisdiction of securities and commodities regulation. We also focus on matters involving the enforceability of close-out netting and credit support, evaluating how unique types of market participants fit within existing frameworks and provide customized legal opinions for capital relief purposes. Chapman's tax department has extensive experience advising our financial institution clients both in connection with their dealing activities in derivatives, structured securities, and other financial products and their own taxation needs with respect to these instruments.

Representative Experience

Transaction Matters

• Represent global and domestic swap dealers with routine ISDA-based negotiation support for daily transactional flow and special large-scale documentation initiatives (such as UMR implementation).

• Provide various regional and commercial banks with hedging program implementation and provide model hedging and regulatory documentation.

• Advise on swap dealer intermediation transactions for margin and bank capital relief purposes.

• Represent FICC GSD Sponsoring Members, buy-side sponsored members, and various regional offices of the Federal Home Loan Bank system with respect to FICC cleared repo documentation.

• Represent broad spectrums of market participants with matters arising under forward-settled agency mortgaged backed securities, US treasury, and “covered agency” transactions, including the implementation of FINRA Rule 4210.

• Represent municipal issuers in various derivatives transactions linked to multi-million-dollar bond offerings.

• Represent initial purchaser, structuring agent and credit default swap provider in over $2 billion of novel synthetic middle-market loan securitizations.

• Represent purchasers, structuring agents and issuers in numerous synthetic CDOs and CLOs.

Regulatory Matters

• Regularly advise various global, regional, and community banks on financial reform legislation, including compliance with Title VII of Dodd-Frank and the cross-border application of US derivatives legislation.

• Advise market participants on UMR, including VM CSA, Phase 4 and 5 IM implementation, and assist with the evaluation of counterparty classification elections.

• Assist with swap dealer, FCM, and introducing broker registration and compliance with applicable CFTC, NFA, and prudential bank regulations.

• Advise global swap dealers on close-out netting and collateral enforceability determinations under Basel and other regulatory rules and provide global swap dealers with bespoke netting, termination, and collateral enforceability opinions across a variety of products and industry standard master agreements (ISDA/SIFMA/ISLA).

Related Practices