Katten has a deep knowledge of both futures and derivatives products that are economically similar but legally distinct. Our Futures and Derivatives team combines that knowledge with a focus on our clients' commercial objectives to help them succeed in these businesses.
Practical counsel leads to efficient solutions
Katten's futures and derivatives attorneys represent a wide range of clients (dealers, end users, proprietary traders, brokers, advisors, exchanges and clearing organizations) on an equally wide range of commercial transactions (futures, structured products, and cleared and over-the-counter swaps) encompassing many different asset classes (interest rates, credit, commodities, securities and foreign exchange). This breadth of our practice gives us a valuable perspective on issues and a basis for creative problem solving.
The foundation of our practice is a deep understanding of futures and derivatives regulation, market practices and documentation. We negotiate agreements to help our clients close deals, not to prolong the negotiation process. We also help them understand and comply with the myriad rules and regulations affecting their businesses, and we defend them effectively when regulatory or litigation problems arise. Where appropriate to further our clients' business objectives, we also have been successful in obtaining regulatory relief that resolves issues before they turn into problems.
Our strong US and UK teams are fully coordinated so we can efficiently and consistently serve the needs of clients who do business on both sides of the Atlantic. Clients often rely on us to design three-cornered analyses for their activities in the UK, the EU and the US.
Established relationships create efficiencies
Katten's team includes attorneys who have worked at the Commodity Futures Trading Commission and the Securities and Exchange Commission as well as senior in-house counsel and business counsel at global investment banks. We maintain excellent relationships with national regulators, self-regulatory bodies, exchanges and clearing organizations, which often gives us direct access to advance our clients' interests. Other members of our team have served in senior in-house roles at both financial services firms and trade associations.
Our attorneys are thought leaders in the futures and derivatives world. Our publications and financial service blogs provide insightful views and are regularly read by clients, nonclients and regulators around the world. Because of our reputation for extensive industry knowledge, regulators and industry decision makers often ask for our insights. Members of the Futures and Derivatives team are active in industry projects and initiatives and some serve on government advisory committees. These activities give us a front-row seat from which to monitor new futures and derivatives developments and offer input that benefits our clients.
- Defend major financial institutions (both US and non-US) against allegations of under-reporting or misreporting. Our work includes technology internal review, remediation, negotiation of relevant settlement documents, and extensive work with FINRA and the options exchanges.
- Represented major global financial services provider in investigation by the CFTC regarding trading of EFRPs. We submitted a Wells response and additional documentation; through several rounds of discussions with CFTC staff and the acting director of enforcement, we successfully settled the matter for a reduced fine and a recordkeeping charge against a single corporate entity.
- Represent financial institution's commodities trading unit regarding revenue put transactions relating to the full capacity for 1,000+-megawatt combined-cycle natural gas facilities to be constructed in New York and Pennsylvania.
- Counsel leading global investment banker with regard to exchange-traded derivatives, OTC options and related trading matters. We provide insight and advice into complicated and novel regulations affecting trading, respond to potential new trading issues, offer real-time trading advice to avoid future issues, and provide counsel after the fact when a trading activity may be problematic.
- Provide ongoing regulatory advice to commodity merchant and trading firms focused on the hedging of physical commodities. We regularly counsel clients on exchange-traded and OTC derivatives.
- Advise full-service brokerage and investment banking firm regarding registration as a floor trader and relevant CFTC rules.
- Defend corporate investment bank against allegations that it and other banks manipulated LIBOR. We direct all aspects of the bank’s internal investigation and response to far-reaching discovery requests, conduct presentations to regulators, and manage the sweeping consolidated litigation and related appeals.
- Counsel corporate and investment bank on the full range of issues related to exchange-traded derivatives, including evolving exchange rules, block trades, and exchange and futures-related positions and position limits. We also advise the firm on execution and clearance issues under US law impacting its international affiliates.
- Represented one of the first swap execution facilities and clearinghouses authorized by the CFTC to trade and settle derivatives contracts with digital currencies such as Bitcoin in obtaining both its SEF and DCO licenses.
- Represent State government on several amendments and novations to swaps, including negotiation of lower credit rating-termination triggers for the State's interest-rate swap deals with financial institutions.
- Represented prop trading firm and its founder in a CFTC suit alleging that the founder had engaged in “spoofing” and manipulated various commodity futures markets. We represented the clients in discovery, advised on trial strategy and negotiated a settlement in principle with the CFTC.
- Counsel industry association with regard to the regulation of exchange-traded derivatives markets and market participants, with particular focus on FCMs registered with the CFTC. Our representation includes (1) preparing comment letters with respect to proposed CFTC rules and ESMA regulations; (2) assistance with lobbying efforts before congressional committees; (3) drafting industry-standard documents, such as the EMIR Clearing Member Disclosure Statement for use by FCMs whose clients trade on EU markets; and (4) providing market education programs.
- Represented global financial services firm in investigation by the CBOE, NFA and CFE regarding allegedly manipulative trading of options and futures on the CBOE and the CFE. The investigation concerned the client's trading in several complex financial products, including options and futures related to the volatility of an underlying exchange-traded fund. We handled all aspects of the case, including analysis of issues and defenses, correspondence with the regulators, document production, witness preparation, testimony, coordination of joint defense counsel for the client's employees, and representation before the CBOE Business Conduct Committee in an enforcement action.
- Represented British clearinghouse in preparing and submitting to the CFTC a first-of-its-kind cross-border insolvency opinion reconciling the customer protection requirements under the US Commodity Exchange Act and US Bankruptcy Code with the requirements of EMIR. We also assisted the client with preparing a cross-border insolvency memo relating to the offer of clearing services to US clearing members in relation to securities, repos and certain futures contracts.
- Represented British clearinghouse in its registration as a derivatives clearing organization with the CFTC, in addition to orders expanding the types of products for which the client is able to provide clearing services to US participants. We prepared amendments to the client’s Rulebook, Procedures and Default Rules to permit qualifying clearing clients to elect to be treated as “latent” clearing members. We also provide assistance regarding CFTC requests, such as to commingle cleared swaps customer funds and foreign futures and options customer funds in the cleared swaps customer accounts.
- Represent broker-dealer focused on making markets in exchange-listed equity options and futures. We handle day-to-day regulatory questions as well as inquiries from regulators, addressing issues relating to SEC regulations concerning market-making, market access risk controls, registration, short sales and disruptive trading practices.
- Represent multinational banking and financial services company on a credit-linked note issuance referencing broadly syndicated loans and structuring a cutting-edge repo transaction to finance the acquisition by a CLO manager of its US risk-retention obligations.
- Provision of registration and/or ongoing compliance advice to nine entities (eight US, one non-US) registered as swap dealers with CFTC and FIA.
- Provision of advice to numerous hedge funds regarding swap issues.
- Provision of advice to government pension plans regarding swap issues.
Publication | September 11, 2019
Corporate & Financial Weekly Digest, Featuring Articles on FINRA's Stock Fraud Warning to Investors after Hurricane Dorian, New Changes to NFA Rules and Interpretive Notices, and A Briefing Published By the House of Commons on Retained EU Law after BrexitPublication | September 6, 2019
Corporate & Financial Weekly Digest, Featuring Articles on the Latest SEC Guidance and Enforcement ActionsPublication | August 23, 2019
Corporate and Financial Weekly Digest, Featuring Articles on the Latest CFTC Proposals for Swap Margins, Non-US Clearing Organizations and ReportingPublication | July 26, 2019
Corporate & Financial Weekly Digest, Featuring Articles on the Latest Guidance From FINRA and the CFTC, and an FCA Paper Potentially Prohibiting Some Cryptoasset Related Derivatives ProductsPublication | July 12, 2019