Today, Friday 30 June 2023, is a momentous day in financial markets, being the last day on which rates based on the London Interbank Offered Rates (LIBORs) will be published. LIBOR is a key reference rate that has underpinned hundreds of trillions of dollars of assets over the last five decades.
Continue Reading End of the road for LIBOR
Banking organizations looking to reduce the amount of risk-based regulatory capital required to support residential mortgage loan portfolios can use synthetic securitization to convert the capital treatment of their exposures from wholesale or retail exposures to securitization exposures. In a new Legal Update, we discuss how regulatory capital requirements impact banking organizations that hold portfolios of residential mortgage loans and how synthetic securitization can help mitigate the capital charge associated with these portfolios.
Read the full update here.
ISDA has recently examined the progress in global derivative markets away from interbank offered rates to risk free rates.
Continue Reading Mission Accomplished? Progress on Global Transition to RFRs in Derivatives Markets
Complex products continue to be a regulatory cause célèbre, drawing attention from the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority, Inc. (“FINRA”). FINRA launched a targeted examination of practices relating to options account opening, ongoing options account supervision and customer communications in connection with options in August 2021. Earlier this month, FINRA provided updated guidance in the form of questions for firms to consider as they review and evaluate their supervisory systems for options account activity of both self-directed and full service brokerage account customers. The questions focus on firms’ processes for approving customers to trade options, including related information gathering, options trading disclosures and ongoing supervision of options accounts.
Read our latest Legal Update on these topics here.
In Macquarie Bank Limited v Phelan Energy Group Limited [2022] EWHC 2616 (Comm) the High Court considered what must be contained in a notice of failure to pay or notice of an early termination date under the 2002 ISDA Master Agreement for it to be effective. The findings will be of interest to parties considering closing out derivative transactions.
Continue Reading You Have Been Served: Requirements for a Valid Failure to Pay Notice and Early Termination Date Notice
On Thursday 15 December, Mayer Brown’s Capital Markets team in Germany invites you to an ad hoc webinar on the proposed EU Capital Markets Union package, including the Listing Act and amendments to OTC Derivatives Clearing in the EU.
On 7 December 2022, the European Commission proposed a host of measures designed to facilitate further development of the EU’s capital markets, in particular by:
The Amended Rules are Intended to be “More Technology Neutral” and Specifically Address Cloud Storage
On October 12, 2022, the SEC adopted amendments to the electronic recordkeeping requirements under SEC Rule 17a-4, applicable to broker-dealers, as well as SEC Rule 18a-6, applicable to security-based swap dealers and major security-based swap participants that are not registered as broker-dealers.
Continue Reading SEC Adopts Amendments to Electronic Recordkeeping Requirements for Broker-Dealers and Security-Based Swap Entities
The recent volatility in the cryptocurrency markets has not tempered the momentum towards developing contractual standards and norms for digital asset derivatives.
Continue Reading The key (terms) to unlocking the market: contractual standards for digital asset derivatives
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.