Dechert has a core team of professionals within its Financial Services Group in multiple worldwide offices (the Global Commodities & Derivatives Team – GCDT) that advises on the law, regulation, and practice of, and provides execution assistance involving, commodities and related cash, derivative, and structured transactions and products. Our expertise and experience covers all commodities and asset classes, including: financials (such as equity, fixed income, and economic instruments, baskets, and indices); currencies; credit, metals; energy, power, weather, industrial, agricultural, and tropical items; investment funds and accounts; real estate; and other tangibles and intangibles. Our diverse international client base provides us with a unique perspective on the business and legal issues of primary importance to all market participants. Our GCDT lawyers are supported by other Dechert practice groups in regard to related laws, regulations, and practices, including securities, banking, insurance, insolvency, broker-dealer, margin, investment company, capital markets, financing, M&A, gaming and bucket shop, tax, ERISA, UCC, intellectual property, and dispute resolution.
Our GCDT lawyers advise in particular on issues arising under the U.S. Commodity Exchange Act (CEA) and other applicable U.S., State, self-regulatory organization rules and non-U.S. laws and regulations, including:
- structuring collective investment vehicles (such as hedge funds, commodity pools, mutual funds, exchange-traded funds (ETFs), pension funds, and other commingled investment vehicles), companies of all types, and other investment vehicles and managed accounts that desire to access the world’s derivative markets;
- advising with respect to compliance with registration, reporting, recordkeeping, antifraud, and other provisions of applicable laws, regulations, and best practices as well as market rules;
- providing structuring and product design, transaction execution, and documentation assistance on spot, futures, forward, swap, option, note, certificate of deposit, brokerage, execution, trading, repurchase, lending, collateral, portfolio margining and optimization, custody, and liquidity transactions and documentation;
- advising with respect to the applicability of laws, regulations, and best practices to OTC derivative transactions and products and the availability of exemptions;
- advising exchange-traded and over-the-counter (OTC) market participants of all types, such as futures commission merchants, dealers, brokers, investment advisers, commodity trading advisors, commodity pool operators, traders and investors, corporate end-users, commercial users, insurance companies, public and private investment funds, foundations, family offices, universities, public and private pension plans, and state owned or controlled investment and business development enterprises;
- advising with respect to the novel use of derivatives in innovative structures and solutions;
- advising with respect to management of counterparty credit and operational risk exposure, including structural, collateral, and custody solutions;
- advising commodity and other derivatives exchanges and clearinghouses; and
- advising worldwide industry organizations and serving on various of their committees.
Equity and Fixed Income Derivatives
Our GCDT lawyers regularly represent both buy-side and sell-side clients in connection with a broad array of equity and fixed income derivative transactions, including commercial and investment banks, dealers, issuers, holders of large equity stakes, and public, private, and proprietary investment funds, vehicles, and accounts. In particular, we advise and assist clients on variable prepaid forwards, total return swaps, equity collar and loan transactions, accelerated share repurchases, accreting strike call option transactions, gap puts, and numerous other equity-linked OTC transactions, securities, and products as well as moving OTC transactions to central clearing and exchange trading. We also advise and assist clients on complex single name and portfolio credit and loan default derivatives and economic index, interest rate, and currency derivatives.
Our GCDT lawyers provide regulatory and compliance advice to many of the largest participants in the commodities and derivative markets, including numerous financial institutions and market professionals and participants. We advise these clients in analyzing applicable regulatory requirements and constraints under the U.S. federal commodities laws and regulations and other U.S. and non-U.S. regulatory authority rules, considering the application of those requirements to client business needs and objectives across geographic borders and developing solutions to the regulatory issues presented.
Our GCDT lawyers assist clients who are actively engaged in regulated commodities and derivatives activities in developing their compliance and risk management infrastructures, policies, procedures, and best practices to ensure that the duties and obligations imposed by applicable laws, regulations, and best practices are adequately addressed and discharged. We assist clients in registering with the Commodity Futures Trading Commission (CFTC) by becoming members of the National Futures Association (NFA), preparing for regulatory inspections and compliance audits by the CFTC, the NFA, and other U.S. and non-U.S. governmental, regulatory, and self-regulatory authorities.
Dechert has a large, expert, and experienced team of lawyers actively involved in forming, and providing operational and transactional assistance to, commodity pools, hedge funds, other alternative investment vehicles, and other commodity and derivatives-focused public, private, and proprietary funds, vehicles, accounts, and platforms. We effectively assist clients in incorporating commodities and derivatives based strategies into their investment programs. We are also active in the offshore investment fund area, assisting clients with the establishment, operations, and transactions of offshore funds, UCITS, managed accounts, management companies, and distribution operations in jurisdictions around the world, and we service this business out of most of our worldwide offices.
Litigation, Enforcement, and Investigation
Dechert’s Litigation Group represents clients on numerous commodities and derivative dispute resolution matters, including civil, criminal, administrative, arbitration, mediation, enforcement, and investigative claims, actions, and proceedings, as well as in client internal investigations and reviews.