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November 22, 2011
Entering Uncharted Waters: MF Global liquidation presents unprecedented test of U.S. insolvency regime for dual registrants – Teigland-Hunt LLP Client Alert
§ MF Global represents first significant liquidation of a brokerage firm jointly registered as a broker-dealer with the SEC and a commodity broker with the CFTC
§ Liquidation of MF Global will require the unprecedented application of two distinct bankruptcy and customer asset protection regimes that lack harmonization
§ Over 40 of the 50 largest commodity brokers are dually registered as broker-dealers
Even in these early days, the collapse of MF Global is proving significant for a number of reasons. In addition to being one of the ten largest bankruptcies in U.S. history, MF Global’s collapse potentially involves missing customer assets amounting to hundreds of millions of dollars. In the long run, however, one of the larger distinctions may prove to be that the liquidation of MF Global will require the unprecedented application of two vastly different bankruptcy and customer asset protection regimes to a sizeable brokerage firm.
See the T-H Client Alert attached for further analysis of this important development.
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June 17, 2011
Ready, Set, Clear: FIA and ISDA Publish Standardized Agreement Addressing Execution Issues for Cleared Swaps - Teigland-Hunt LLP Client Alert
- "FIA-ISDA Cleared Derivatives Execution Agreement" now published
- Standardized swap addendum for clearing agreements to follow
In anticipation of growing demand for swap clearing with the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Futures Industry Association (FIA) and the International Swaps and Derivatives Association, Inc. (ISDA) today published their first standardized form of agreement covering cleared swaps. The “Cleared Derivatives Execution Agreement” will allow parties entering into swaps that are intended to be cleared to address certain issues that may arise in connection with the execution of such transactions. In the near future FIA also will be publishing a standardized form of addendum for futures clearing agreements between customers and their futures commission merchants (FCMs) that addresses terms related to the clearing of swaps.
See the TH Client Alert attached for more details about both of these important documentation initiatives.
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November 04, 2010
New Recordkeeping Requirements for Swaps - Teigland-Hunt LLP Client Alert
The Commodity Futures Trading Commission (“CFTC”) recently issued an interim final rule (the “Rule”) requiring the reporting of swap transactions that were open as of July 21, 2010, the date of enactment of the Dodd‐Frank Act (“Pre‐Enactment Unexpired Swaps”). Comments onthe Rule will be accepted by the CFTC until November 15, 2010.
Because the rules for swap data repositories (“SDRs”) and reporting have not yet been issued, counterparties to Pre‐Enactment Unexpired Swaps currently are obligated only to keep records with respect to Pre‐Enactment Unexpired Swaps. This recordkeeping requirement applies to all counterparties to Pre‐Enactment Unexpired Swaps, whether or not they will eventually be the reporting party.
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July 29, 2010
Identifying and Managing the Unique Risks Involved in Trading Enviromental Commodities - by Lauren Teigland-Hunt, Sara Hayes and Joshua Riezman
This is a compilation of two articles about trading of environmental commodities. The article describes practical approaches used in trading documentation to mitigating definitional risks inherent in OTC trades involving environmental commodities and discusses documentation risks inherent in trading these products.
Published in Informer, Volume 2, Issue 14, p. 46 (Summer 2010) by Complinet, Inc., www.complinet.com, the leading provider of compliance intelligence for the financial services industry.
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July 23, 2010
"OTC Derivatives Reform in a Nutshell: U.S. Regulatory Agencies to Play Major Role in Determining Scope and Impact of New Derivatives Regime" - Teigland-Hunt LLP Client Alert
- CFTC, SEC to embark on unprecedented rulemaking effort to implement market reforms
Earlier this week President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). As has been well publicized, the Act contains extensive reforms impacting the United States financial sector and will impose a new comprehensive regulatory regime on the OTC derivatives markets. Most provisions of the Act applicable to derivatives (Title VII) become effective 360 days after the date of the Act’s enactment.
This Client Alert provides a brief overview of the most significant new requirements applicable to the OTC derivatives markets and highlights those areas where significant regulatory rulemaking and determinations are necessary before the extent and precise details of these new requirements are clear.
