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January 04, 2010
"The Emerging Greenhouse Gas Emissions Cap and Trade Market" - published in The Market Maker (6/09) by GuyLaine Charles
The lack of federal legislation establishing a greenhouse gas emissions cap-and-trade program has brought about the proliferation of voluntary programs and mandatory regional programs. This article discusses the importance of understanding the products being offered in the various programs in order to properly assess the risk and value of an investment in these programs.
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December 21, 2009
ISDA publishes new dispute resolution procedures for collateral calls in derivatives markets - Complinet, Inc., by Lauren Teigland-Hunt, Ryan Patino and Joshua Riezman
- Procedures currently in ‘Experimental Pilot Program’ stage
- Market-wide implementation to occur mid-2010
In order to satisfy recent industry commitments to regulators, the ISDA Collateral Committee recently published the 2009 Collateral Dispute Resolution Procedure (the “DR Procedures”), a comprehensive set of procedures that are intended to improve the way in which collateral call disputes in OTC derivatives markets are resolved. The DR Procedures were developed by the ISDA Collateral Committee in consultation with other ISDA committees and trade associations representing buy side market participants and were submitted to the Federal Reserve Bank of New York and other market regulators on September 30, 2009. The DR Procedures are currently being tested by several dealer and buy side firms as part of an experimental pilot program, with broader market-wide implementation expected to take place in 2010.
See the attached article for more details.
Published by Complinet, Inc., www.complinet.com, the leading provider of compliance intelligence for the financial services industry
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September 25, 2009
OTC Derivative Contracts in Bankruptcy: The Lehman Experience - NY Business Law Journal, by GuyLaine Charles
Abstract: In this article, Ms. Charles discusses the “safe harbor provisions” of the U.S. Bankruptcy Code that exempt Over-the-Counter (“OTC”) derivative contracts from certain debtor-protective provisions. The article explains the standardized documentation of OTC derivative transactions and summarizes the contractual terms that allow the non-defaulting party to terminate, liquidate, net and set-off obligations notwithstanding the bankruptcy of its counterparty. Ms. Charles then illustrates how the bankruptcy of Lehman Brothers Holdings Inc. and related debtors has provided a dramatic test of the safe harbor provisions in the context of the failure of a major financial institution, and how OTC derivative counterparties have relied on those provisions to limit their exposure to the Lehman debtors.
This article was originally published in the NY Business Law Journal, Vol. 13, No. 1, Spring 2009.
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September 21, 2009
Understanding emissions trading: navigating the regional greenhouse gas initiative - Complinet, Inc., by Lauren Teigland-Hunt and Sara Hayes
Abstract: Although a federal emissions reduction program targeting greenhouse gases has yet to be implemented in the United States, a number of regional and voluntary emissions reduction programs have emerged and created markets for the trading of US greenhouse gas emissions products. The program with one of the largest and most liquid of these markets is the Regional Greenhouse Gas Initiative (RGGI). This article provides an overview of the RGGI program, followed by a discussion of various methods for participating in this market and some of the risks unique to RGGI products.
Published by Complinet, Inc., www.complinet.com, the leading provider of compliance intelligence for the financial services industry.
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August 06, 2009
ISDA proposes new dispute resolution process for collateral calls in derivatives markets - Teigland-Hunt LLP Client Alert
• Comments due to ISDA by Friday, August 7th
In order to satisfy recent industry commitments to regulators, the ISDA Collateral Committee has issued a comprehensive proposal to improve collateral call dispute resolution processes for OTC derivatives (the “DR Proposal”). A complete draft of the proposal is available on ISDA’s website (www.isda.org). The public comment period on the proposal closes Friday, August 7, 2009.
Although ISDA’s Credit Support Annexes (or CSAs) already contain dispute resolution provisions for collateral calls, the DR Proposal seeks to improve and enhance these provisions as well as processes currently used in the marketplace to resolve call disputes in response to concerns raised by regulators last fall. Specifically the DR Proposal aims to:
• achieve timely identification of the root causes of disputed collateral calls;
• ensure the prompt movement of as much collateral as the parties can mutually agree;
• provide the parties with a flexible range of methods to narrow and/or resolve their dispute consistent with their risk tolerance;
• create consistent and predictable processes, timing and behavior in case of disputes across the market; and
• eliminate uncertainties and delays that increase risk for market participants.See the Client Alert attached for more details.
