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Derivatives legal advice

The use of derivatives and other trading strategies by organisations to create opportunities and mitigate risk in their businesses is long established. Whilst the documentation underlying such strategies is becoming increasingly standardised, the complexities remain and organisations which use them should fully understand the risks involved.

Mandatory clearing of certain derivatives contracts under EMIR (in the EEA) and Dodd Frank (in the US), margin requirements and additional capital costs add further complexity to successfully managing your business risks through the use of derivatives and other trading strategies.

Our international derivatives legal team advise both the buy-side and the sell-side of the market. Our clients include banks, insurers, building societies, corporates (particularly in the transport, retail and energy sectors) broker-dealers and borrowers who wish to hedge their interest rate and/ or foreign exchange risk . The team also advises in asset managers, funds and pension schemes.

Our advisory and transactional legal work covers all major product types, including exchange-traded, over-the-counter and centrally cleared derivatives and all underlying asset classes, such as interest rate, currency, credit, equity, commodity, inflation, fund and energy.

Our participation in a number of industry bodies (including the International Swaps and Derivatives Association (ISDA) and the Investment Association (IA)) means that we are at the forefront of the latest legal and regulatory developments and are up to speed with any legal updates to relevant trading documents (including the ISDA Master Agreement, GMRA, GMSLA, and IFEMA).

We assist our clients in protecting their interests through negotiation of appropriate contractual terms and other risk mitigation mechanisms, including the use of security and collateral and related custody arrangements. We also advise our clients on regulatory compliance.

We take a pragmatic and commercial approach when advising our clients and deal with any queries or concerns quickly and efficiently. We recognise that our clients need legal advice and training at the right price and can tailor these services to suit a range of budgets.

How the derivatives legal team can help

Eversheds Sutherland offer a range of legal services to assist you in developing your trading strategies, including:

  • Reviewing and negotiating derivatives contracts, clearing documentation, repurchase agreements, stocklending agreements, collateral and security agreements, and other trading documentation
  • Providing legal advice and assisting with the implementation of the requirements under EMIR, Dodd Frank and MiFID II
  • Training sessions on reviewing and understanding trading documents
  • Producing standard form documentation tailored to your business needs
  • Ongoing regular ‘health checks’ on all current trading documents
  • Providing web-based solutions for storing your trading documents
  • Advising on arrangements for heading margin and the effects of counterparty or clearing member insolvency
  • Ad hoc advice on specific issues, including regulatory compliance
  • Planning for regulatory change, including under MiFID II , MiFIR and the Market Abuse Directive