Practice/Industry Group Overview
Derivatives - ranging from simple interest rate swaps to extraordinarily complex credit derivatives and equity derivatives - have become a way of life in business today. Regardless of size and regardless of industry, countless companies are now entering into derivative transactions on a regular basis (even if for no other purpose than to convert a floating rate loan from a lender that is not willing to lend on a fixed rate basis into the equivalent of a fixed rate loan).
It is thus crucial that a full-service firm such as Duane Morris have broad experience with derivatives. Duane Morris attorneys have such experience. Our attorneys have represented a diverse client base (including commercial banks, investment banks, dealers, trading and hedge funds, financial markets, structured finance vehicles and corporations of various sizes and types) in a broad variety of derivatives transactions. These have included credit derivatives (including credit default swaps, total return swaps and credit-linked notes), equity derivatives, interest-rate, currency and commodity swaps, foreign exchange, forward and option agreements, repurchase agreements, securities lending agreements, prime brokerage agreements, master netting agreements, and products traded on the national options exchanges.
We have assisted clients in determining whether the relevant swap meets their economic objectives and complies with applicable investment guidelines and financial risk management policies. Our attorneys have also rendered formal written guidance to the managements, audit committees, and boards of directors of clients concerning their rules in monitoring institutional exposure to interest rate risk and credit risk and the risks of derivative position taking.
We have developed comprehensive policies and procedures manuals for clients in the areas of swap and derivative risk exposure. Our strong background and active practice in bank regulatory law provides Duane Morris with a crucial capability to assess swap risks in the context of the specialized rules applicable to bank insolvencies, depositor preferences, and other legal frameworks unique to banking. Our regulatory lawyers work closely with their documentation and bankruptcy law colleagues to assure that swap documentation and related enforceability and netting opinions meet the requirements of favorable regulatory treatment for the underlying financial relationships.
In addition to swap transactions, the firm also has handled transactions involving exchange-traded options and futures products (including security futures products), guaranteed investment contracts, repurchase agreements, funds transfer payment agreements and the provision of liquidity for investment bank derivatives programs. Our practice requires legal analysis of derivatives structures and the risks of each and advice to banks, brokers and dealers and corporations of all types and sizes regarding changes and additional protections required in the documentation to assure adequate protection, as well as the drafting and negotiation of the relevant documentation.
A transactional derivatives practice requires extensive knowledge of issues that could arise under securities, bankruptcy, commodities, banking, tax, real estate and employee benefits law. Our derivatives group works closely with Duane Morris lawyers in each of these areas as each particular situation requires.