On June 15, 2022, the Securities and Exchange Commission (the “SEC”) issued a request for comment to “help determine which ‘information providers,’ such as index providers, model portfolio providers, and pricing services, might come under the SEC’s definition of an investment adviser.” The request for comment (the “RFC”) discusses the roles played by these entities in, for example, the construction and calculation of indices, and analyzes the factors used to determine whether an entity is providing investment advice within the meaning of the Investment Advisers Act of 1940 (the “Advisers Act”). Among other things, the SEC is concerned about what it terms “significant discretion” in index methodologies.

Continue Reading SEC Request for Comment on “Information Providers”

The Mayer Brown derivatives team recently attended (virtually, as is increasingly market standard) ISDA’s conference on “Developments in Crypto Derivatives”. This is a “hot” area of the legal market, as we have recently reported on this blog, and so the conference was well attended.

In this post we summarise the main themes of the conference and issues market participants should consider regarding crypto derivatives.

Continue Reading Developments in Crypto Derivatives

March 11, 2022 Webinar

12:00pm – 1:00pm EST

Register here.

On February 10, 2022, the Securities and Exchange Commission (“SEC”) proposed amendments to the rules governing reporting on Schedules 13D and 13G. These proposed amendments are intended to modernize the rules by, among other things, making information available to the public in a more timely manner, deeming holders of certain cash-settled derivative securities to be beneficial owners of the reference equity securities, and clarifying the disclosure requirements in respect of derivative securities. However, the proposed amendments have broader impacts.

During the upcoming Webinar, Mayer Brown panelists will discuss:

  • Proposed changes that would shorten multiple filing deadlines for Schedules 13D and 13G,
  • Proposed amendments to the definition of beneficial ownership to include certain cash-settled derivatives, other than security-based swaps,
  • Proposed method for calculating reference securities underlying cash-settled derivatives,
  • Proposed amendments that would clarify the disclosure requirements with respect to derivative securities,
  • The relationship of these proposed amendments to the SEC’s proposed Rule 10B-1, which would require public reporting of, among other things, certain large positions in security-based swaps,
  • Proposed amendments to clarify when persons are deemed to “act as” a group under Sections 13(d)(3) and (g)(3) of the Exchange Act and exemptions,
  • The effect of the proposed amendments to the beneficial ownership definition on Section 16 filing requirements, and
  • The effect on activist interest and strategies and ongoing private transactions.

On February 10, 2022, the Securities and Exchange Commission (the “SEC”) proposed amendments to Schedules 13D and 13G relating to beneficial ownership reports (the “Proposed Amendments”).

The Proposed Amendments are intended to modernize the rules that govern reporting on Schedules 13D and G by, among other things, making information available to the public in a more timely manner, deeming holders of certain cash-settled derivative securities to be beneficial owners of the reference equity securities, and clarifying the disclosure requirements in respect of derivative securities. The SEC also proposed a series of amendments to Rule 13d-5 to clarify and affirm its application to two or more persons who “act as” a group under Sections 13(d)(3) and (g)(3) of the Exchange Act.

Read the full Mayer Brown Legal Update here.

In terms of exponential growth, surely the only recent phenomenon to match the spread of COVID-19 around the world is the explosive growth of cryptocurrencies and their spread into the established financial markets. Central banks, regulators and public authorities worldwide are grappling with how cryptocurrencies fit into existing legal and regulatory frameworks, from the tax treatment of gains (or losses) on trading in cryptocurrencies to the marketing of cryptocurrencies to members of the public.

Continue Reading Growing up: crypto derivatives

In Deutsche Bank v Busto [2021] EWHC 2706, the English High Court recently considered the validity of certain swap contracts entered into between an Italian public authority (“Busto”) and Deutsche Bank AG, London Branch (“DB”). The capacity of public bodies to enter into derivative contracts has been fertile ground for litigation in recent years.

Continue Reading Capacity Request: validity of swaps entered into by Italian public authorities

With the 2021 United Nations Climate Change Conference (also known as COP26) coming to Glasgow later this month and amid numerous occurrences of extreme weather, there has been an increased global focus on climate change recently which is reflected in the financial markets. By some estimates, the sustainable finance market grew by almost 30% in 2020. Derivatives linked to environmental, social and governance (“ESG”) objectives have been around for several years, but this previously niche marketplace is growing, reinforcing the idea that derivatives have a key role to play in the advancement of ESG objectives in the financial markets and the global transition to a green economy.

Continue Reading ESG Derivatives: A Sustainable Trend

Two years ago, I was standing in front of our Mayer Brown offices in Frankfurt, boiling in 38 degree heat, filming a trailer for Linkedin for our 5th Annual OTC Derivatives Seminar, which we had clients coming from across Germany, to attend.

Last June , with international lock-down well under way, we took our 6th Annual OTC Derivatives Seminar online, and hundreds of clients and friends across the world tuned in.

This year we remained online, throwing open our virtual doors again, with our 7th Annual OTC Derivatives Seminar, which started on Monday 21 June.

We split the Seminar across 4 days , with a 30 minute session each day.

We looked at developments in Initial Margin; the new 2021 ISDA Definitions; regulatory updates in ESG, Brexit, Benchmark Regulation and LIBOR Transition; and the latest documentation, updates and changes to the German Master Agreement.

I was delighted to see hundreds of registrations from the UK, Germany, France, Spain, the United States, South Africa, Hong Kong, Singapore and beyond.  We also got some tremendous reach through our three Linkedin posts promoting the Conference: Linkedin Post #1 ; Linkedin Post #2 ; and Linkedin Post #3

Of course our team greatly missed catching up in person, as we took for granted in pre-Covid times, but being able to reach out to a broader audience is also very satisfying.

Last year, we thought that things would be back to normal by now. We still think the same now for next year, but I expect that “normal” will involve a mixture of live-streaming and live audience, with interaction from both audiences.

For those who were not able to attend, we are delighted to attach below the materials for the relevant sessions as well as links to the recordings, and we hope to see you either through live streaming or live audience next year:

Session 1

IM-Implementation for 2021 and 2022: Briefing and current implementation aspects
Monday, June 21 
Speakers: Arshak Mkrtchyan, Edmund Parker

Session 2

ISDA 2021 Definitions: A look into the major changes in concept and content
Tuesday, June 22
Speakers: Chris Arnold, Edmund Parker, Patrick Scholl

Session 3

Regulatory Updates: ESG, Brexit, Benchmark Regulation, LIBOR transition and other aspects
Wednesday, June 23
Speakers:  Chris Chapman, Marcel Hörauf, Edmund Parker, Patrick Scholl

Session 4

German Master Agreement: Roundup on latest documentation updates and changes
Thursday, June 24
Speakers: Ann-Kathrin Balster, Alexei Döhl, Patrick Scholl

Our annual Mayer Brown OTC Derivatives Seminar continues for a second year in webinar form.

This year, we offer you the opportunity to participate in an interactive seminar, structured as a series of four quick sessions. Each lasts around half an hour, with the opportunity to interact with our team in a live Q&A session.

The sessions will take place across four days, at 4:00 p.m. CET / 3:00 p.m. UK time, on 21, 22, 23 and 24 June 2021: CLICK HERE TO REGISTER .  A Video link to each session will be sent through to those registering, once the session has gone out live.

Please join our global derivatives team as we discuss some of this year’s most important topics. Topics, times and dates are as follows:

Session 1
IM-Implementation for 2021 and 2022: Briefing and current implementation aspects 
Monday, June 21, 2021, 4:00 p.m. CET
Speakers: Chris Arnold, Arshak Mkrtchyan, Ed Parker

Session 2
ISDA 2021 Definitions: A look into the major changes in concept and content
Tuesday, June 22, 2021, 4:00 p.m. CET
Speakers: Chris Arnold, Ed Parker, Patrick Scholl

Session 3
Regulatory Updates: ESG, Brexit, Benchmark Regulation, LIBOR transition and other aspects

Wednesday, June 23, 2021, 4:00 p.m. CET
Speakers: Chris Chapman, Marcel Hörauf, Ed Parker, Patrick Scholl

Session 4
German Master Agreement: Roundup on latest documentation updates and changes
Thursday, June 24, 2021, 4:00 p.m. CET
Speakers: Ann-Kathrin Balster, Alexei Döhl, Patrick Scholl

The International Swaps and Derivatives Association held its 35th annual general meeting over three days last week. Last year, the conference was due to be in Madrid, but it was postponed, and with international travel even less viable this year, the conference moved online.

For those unable to attend the online version, here is a summary of the highlights, from a few of three of the topics covered: IBOR transition, prudential issues such as Basel III implementation and future challenges and opportunities such as digitalisation.

Continue Reading Virtually the same: 35th ISDA AGM