Latest Articles

From 1 March 2017, the new variation margin rules for over-the-counter derivatives contained in the regulatory technical standards adopted by the European Commission will apply to certain European counterparties. In anticipation of the 1 March deadline, European counterparties (and any non-EU entities, including funds, that trade with European financial institutions) are in the process of putting in place appropriate risk management procedures and compliant netting and collateral documentation to implement the new VM requirements. Click
After the financial crisis, 2011 saw a revival in the United States of offerings of collateralized loan obligations (CLOs), one of the structured credit products that proved resilient during the financial crisis. CLOs primarily invest in loans to non-investment-grade commercial and industrial enterprises and, unlike collateralized debt obligations (CDOs), which invest in mortgage-backed securities, CLOs suffered few events of default and still fewer liquidations that resulted in losses to investors. Click here to read the…
Over the past year, there have been regulatory actions that implement or modify the risk retention regulations and requirements applicable to collateralized loan obligations (“CLOs”) in both the U.S. and the EU. In light of these regulatory changes, CLO managers have developed legal structures to enable them to comply with risk retention requirements. Click here to read this chapter, published in the 2016 edition of The International Comparative Legal Guide to: Securitisation, in which SRZ partners Craig
Yesterday, the Commodity Futures Trading Commission (the “CFTC”) announced several important updates related to swap execution facilities (“SEFs”): 1. CFTC Website Location for MAT Swaps. The CFTC announced that it has published a centralized list of swaps subject to the swap execution mandate, or otherwise known as “MAT trades.” This dedicated webpage is intended to provide market participants notice of the swaps subject to the swap execution mandate and includes specific terms defining each such swap. To…
The Commodity Futures Trading Commission (the “CFTC”) announced its first two “made available for trade” determinations (each, a “MAT Determination”), which mandate that fund managers trade certain benchmark interest rate swaps on behalf of their funds and managed accounts through a swap execution facility (a “SEF”) or a designated contract market (a “DCM”). Once a product is subject to a MAT Determination, fund managers will not be permitted to trade such products over-the-counter. Fund managers must…
On Dec. 21, 2013, the U.S. Commodity Futures Trading Commission issued broadly applicable no-action relief deferring (through May 1, 2014) the effectiveness of recordkeeping requirements that would have required fund managers registered as commodity trading advisors who hold swap execution facility memberships to preserve oral communications (including telephone calls) relating to any trading of commodity interests. Click here to read more on the no-action relief.…
As we recently reported, the pan-European regulator ESMA announced that it had approved the first trade repositories to collect and maintain the records of derivatives contracts. The reporting obligations under the European Market Infrastructure Regulations (“EMIR”) with respect to derivative transactions do not apply to non-EU funds managed by US managers. US managers of non-EU funds should, however, note that if they engage in derivatives trades with a counterparty covered by EMIR, the counterparty…
In a European Securities and Markets Authority (“ESMA”) press release dated 7 November 2013, the pan-European regulator announced that it had approved the first trade repositories. Trade repositories are firms that collect and maintain the records of derivatives contracts. The registrations will take effect on 14 November 2013, with the reporting obligation beginning 90 calendar days after the official registration date on 12 February 2014. The obligation to report impacts all EU counterparties, counterparties trading…
Approximately six months ago (on Dec. 21, 2012), the Commodity Futures Trading Commission staff provided temporary no-action relief allowing certain equity total return swaps on foreign securities — which have been termed “compo equity swaps” or “compo equity total return swaps” — to be treated as “securities-based swaps” (which are regulated by the Securities and Exchange Commission) and not as “mixed swaps” (which are regulated by both the CFTC and SEC). Based on that relief,…