Practice Areas & Industries: Sullivan & Cromwell LLP


Commodities, Futures & Derivatives Return to Practice Areas & Industries

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Practice/Industry Group Overview

Sullivan & Cromwell’s Commodities, Futures and Derivatives Group provides a full range of transactional, advisory and litigation services in connection with the structuring, offering and trading of commodity and derivative products.

The Firm advises on the development of new products, the structuring and implementation of complex transactions and the obtaining of necessary regulatory relief. Clients also rely on S&C for responses to governmental inquiries and defense against governmental and private actions.

S&C marshals insights and ideas from across the Firm’s various disciplines to offer truly coordinated representation.

The Group handles matters such as:

  • advice on the development of new technologies, financial indices, electronic trading systems, exchanges and clearing houses;
  • regulatory and transactional advice regarding derivatives;
  • regulatory and transactional advice to hedge fund groups;
  • compliance and investigatory reviews of commodities and derivatives businesses;
  • policy, legislative and regulatory comment and advice relating to commodities, securities, banking and international law issues affecting commodities and derivatives;
  • advice to banks, investment banks, hedge funds, utilities and others on trading issues; and
  • coordinating global advice regarding the status of trading, advisory and information systems under the laws of multiple jurisdictions.


Sullivan & Cromwell has:

  • Advised on the development of new technologies, financial indices, electronic trading systems, exchanges and clearing houses in connection with the trading and clearing of futures, options and OTC derivatives, including advice on structuring, regulatory, intellectual property and other issues and transactional representation.
  • Provided regulatory and transactional advice regarding derivatives, including advice on structuring and documenting transactions and advice on securities, commodities, banking, insurance, cross-border margin, insolvency and other issues.
  • Reviewed compliance and investigatory policies of commodities and derivatives businesses, including training and development of internal policies and procedures to govern businesses and establishment of structured product review committees to comply with regulatory guidance.
  • Provided policy, legislative and regulatory comment and advice relating to commodities, securities, banking and international law issues affecting commodities and derivatives.
  • Represented banks, investment banks, hedge funds, utilities and others on trading issues including the establishment of trading ventures involving commodities, securities, currencies and derivatives.
  • Coordinated global advice regarding the status of trading, advisory and information systems under the laws of multiple jurisdictions.
  • Represented clients in connection with the enactment of the Dodd-Frank Act and the proposal and implementation of regulations pursuant to the Dodd-Frank Act, including regular and extensive written communications and meetings with Congress, the Commodity Futures Trading Commission (CFTC), the SEC and relevant banking agencies, and an ongoing role in the development of the regulatory model for OTC derivatives generally.
  • Represented trade associations including International Swaps and Derivatives Association, Managed Funds Association, Futures Industry Association, Private Equity Growth Capital Council and others in meetings with regulators and legislators and in comments on a wide range of rulemaking issues.
  • Structured, negotiated and documented joint ventures regarding electronic trading platforms, clearing operations and other services, including the organization of ICE and the clearing relationship between ICE and the London Clearing House, and the development of facilities to provide clearing services to the foreign exchange and other markets.
  • Represented LCH.Clearnet in the development of the SwapClear client clearing model with respect to interest rate swaps, including the implementation of a futures commission merchant clearing model in the United States.
  • Performed public offerings and private placements of a wide range of securities indexed to commodities, equity securities, currencies and indices.
  • Developed new types of derivative products linked to energy commodities and credit and insurance references.
  • Developed internal policies and procedures and training for energy companies, banks and others.
  • Structured, developed and achieved regulatory approval of electronic exchanges and trading platforms including:
    • trueEX Group, a newly organized electronic exchange and swap execution facility for swaps;
    • Electronic Liquidity Exchange ELX, a consortium established primarily for the purpose of trading Treasury futures;
    • LCH.Clearnet in connection with the expansion of the SwapClear clearing service for interest rate swaps into the U.S. and the development of a futures commission merchant clearing model; and
    • IntercontinentalExchange.
  • Represented commodities firms in Department of Justice, CFTC, Federal Energy Regulatory Commission, SEC, and exchange investigations and proceedings.
  • Represented clients in class actions and complex private litigations, often arising from government enforcement efforts.
  • Coordinated responses to proceedings involving multiple agencies, including those occurring cross-border.

Articles Authored by Lawyers at this office:

Second Circuit Rejects “Listing” and “Foreign-Squared” Claims Under Morrison v. National Australia Bank
, May 09, 2014
In Morrison v. National Australia Bank, the U.S. Supreme Court opined that U.S. securities laws apply only “in connection with the purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States.” Seizing on that...

Tweets Allowed in Proxy Contests and Securities Offerings: New SEC Guidance Allows Use of Hyperlinks to Satisfy Legend Requirements in Social Media Communications with Character Limits and Limits Issuers’ Responsibility for Social Media Communications Re-Transmitted by Third Parties
, April 29, 2014
The staff of the Securities and Exchange Commission has published a number of new Compliance and Disclosure Interpretations facilitating the use of social media in proxy contests, business combination transactions, tender offers and securities offerings. The interpretations allow the use of active...

Conflict Minerals Disclosure Due Date Approaching; While SEC Staff Issues New Guidance, Court’s Decision Creates Some Uncertainty: D.C. Circuit Holds That Portion of Conflict Minerals Disclosure Rule Violates the First Amendment; Absent Further Developments, Issuers Should Continue to Prepare to File Disclosures by Monday, June 2
, April 23, 2014
The deadline-May 31, 2014, extended to June 2 because May 31 falls on a Saturday-for conflict minerals disclosures responsive to the SEC’s rule under Section 13(p) of the Securities Exchange Act, is quickly approaching.

New York’s Highest Court Strengthens Forum Non Conveniens Doctrine in Cases Having Peripheral Connection to New York Banking System: Mashreqbank PSC v. Ahmed Hamad Al Gosaibi & Brothers Company
, April 15, 2014
In an opinion issued on April 8, 2014, the New York Court of Appeals unanimously dismissed on forum non conveniens grounds a case arising from a foreign exchange transaction between a bank in the United Arab Emirates and a general partnership in Saudi Arabia, where the only nexus between the...

Kahn v. M&F Worldwide Corp.: Delaware Supreme Court Affirms In Re MFW Court of Chancery Ruling that Business Judgment Review Can Apply to Squeeze-Out Mergers Conditioned Up Front on Both Approval by Special Committee and Majority-of-the-Minority Vote
, March 20, 2014
In an opinion issued last Friday, a unanimous Delaware Supreme Court sitting en banc affirmed then Chancellor (now Delaware Supreme Court Chief Justice) Strine’s decision in In re MFW Shareholders Litigation, holding that the business judgment rule standard of review applies to squeeze-out...

Spin-Off and Listing by Introduction of Feishang Anthracite Resources Limited
, March 10, 2014
China Natural Resources, Inc. (“CHNR”), a natural resources company based in the People’s Republic of China (the “PRC”) with shares listed on the NASDAQ Capital Market, recently completed the spin-off (the “Spin-Off”) and listing by introduction (the...

U.S. Supreme Court Hears Arguments on Critical Issue for Securities Fraud Class Actions
, March 10, 2014
On March 5, 2014, the U.S. Supreme Court heard oral argument in Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317, which presents whether to overrule or significantly limit plaintiffs’ ability to rely on the legal presumption that each would-be class member in a securities fraud class...

Chinese Affiliates of Big Four Accounting Firms Ordered Barred from Practicing Before the SEC for Six Months; Suspension Stayed Pending Appeal: Administrative Law Judge Finds that the Firms “Willfully Refused” to Comply with SEC Requests for Audit Work Papers for Issuers Under Investigation for Accounting Fraud
, February 03, 2014
On January 22, 2014, a Securities and Exchange Commission (“SEC”) administrative law judge issued a decision that is of substantial importance to China-based issuers of securities that are registered in the United States, to multinational corporations with significant operations in...

Securities Law—Potential Expansion of Liability Theories Under the Martin Act: New York State Attorney General and BlackRock Settle Investigation into BlackRock’s Analyst Survey Program, Signaling Potential Expansion of Martin Act Liability Under “Insider Trading 2.0” Theory
, January 24, 2014
On January 8, 2014, the New York State Attorney General and BlackRock, Inc. entered into a settlement agreement by which BlackRock agreed to end its Wall Street research analyst survey program. The Attorney General alleged that BlackRock’s practice of systematically surveying and aggregating...

Physical Commodities and Merchant Banking Activities Conducted by Financial Holding Companies: Federal Reserve Seeks Public Comment on New Limitations on Physical Commodities and Merchant Banking Activities Conducted by Financial Holding Companies Under the Bank Holding Company Act
, January 20, 2014
Earlier this week, the Board of Governors of the Federal Reserve System (the “Board”) solicited public comment, through an advance notice of proposed rulemaking (the “ANPR”), regarding various issues and questions related to physical commodities activities conducted by...

Volcker Rule: Agencies Issue Interim Final Rule Exempting Certain TruPS-Backed CDOs from the Volcker Rule’s Prohibition on Banking Entities’ Holding Ownership Interests in or Sponsoring Covered Funds
, January 17, 2014
Earlier this evening, the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency (the “OCC”), Federal Deposit Insurance Corporation (such three agencies together, the “Banking Agencies”), Securities and Exchange Commission, and Commodity...

Nasdaq Compensation Committee Independence Requirements: SEC Publishes Nasdaq Rule Change Removing Prohibition on Receipt of Compensatory Fees by Compensation Committee Members; Change Aligns Nasdaq Rule with NYSE Rule
, December 13, 2013
Yesterday, the Securities and Exchange Commission published immediately effective changes to the NASDAQ Stock Market Listing Rules that remove the prohibition on a compensation committee member’s receipt of compensatory fees. Instead, consistent with the New York Stock Exchange compensation...

CFTC Proposes Position Limit Aggregation Rules: CFTC Proposes Aggregation Standards Applicable to Position Limits for Derivatives
, November 22, 2013
On November 5, 2013, the Commodity Futures Trading Commission (the “CFTC” or “Commission”) held a public meeting during which it voted unanimously to propose for public comment rules that would expand in certain respects the availability of aggregation exemptions (the...

U.S. Supreme Court to Consider Critical Issue for Securities Fraud Class Actions: Possible Overruling of Basic’s “Fraud-on-the-Market” Presumption Could Spell Major Changes for Current Regime
, November 22, 2013
On November 15, 2013, the U.S. Supreme Court granted certiorari in the case of Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317, raising the prospect that the Court will overrule or significantly limit the legal presumption that each member of a securities fraud class action relied on the...

ISS Proposes Limited Updates to 2014 Voting Policy: Proposals Would Provide Greater Flexibility on Board Implementation of Shareholder Proposals and Eliminate One-Year TSR from the Quantitative Pay-for-Performance Analysis
, November 01, 2013
Institutional Shareholder Services, the influential proxy advisory firm, has published for public comment two proposed changes to its proxy voting guidelines for U.S. companies. The proposals are limited and do not include any change related to the effect of longer board tenure on director...

Asset Management and Financial Stability: Office of Financial Research Publishes Report on “Asset Management and Financial Stability”
, October 07, 2013
On September 30, 2013, the U.S. Department of the Treasury’s Office of Financial Research (OFR) delivered a report to the Financial Stability Oversight Council (FSOC) exploring ways that activities in the asset management industry might create, amplify or transmit stress through the...

SEC Publishes CEO Pay Ratio Proposal: Will Not Affect 2014 or, Most Likely, 2015 Proxy Seasons; Issuers May Use Sampling and Reasonable Estimates to Determine Median; Ratio Must Include All Full-Time, Part-Time, Temporary, Seasonal and Non U.S. Employees
, September 24, 2013
On Wednesday, the SEC published the text of its proposed rule, adopted that morning by a three-to-two vote, requiring U.S. public companies to disclose:

Recent Amendments to Delaware Corporation and LLC Statutes: Adoption of Section 251(h) Facilitates Tender and Exchange Offers; Fiduciary Duties Obtain in LLC Absent Elimination; Public Benefit Corporations Authorized
, September 19, 2013
The State of Delaware recently enacted several significant changes to the Delaware General Corporation Law (“DGCL”) and the Delaware LLC Act (“LLC Act”).

SEC Proposes CEO Pay Ratio Rule: At Earliest, New Rule Will Not Be Effective Until 2015 Proxy Season; Issuers May Use Sampling and Estimates to Calculate Ratio
, September 19, 2013
This morning, a divided SEC Commission proposed a requirement that U.S. public companies disclose:

Broker-Dealer Audit and Reporting Updates: PCAOB Report and New SEC Rules Address Audit, Financial Reporting, Internal Control and Risk Management Issues Relating to Broker-Dealers; These Developments May Be Relevant for Audit Committees of Public Companies that Own Broker-Dealers
, September 17, 2013
The Public Company Accounting Oversight Board and the Securities and Exchange Commission have recently issued reports and taken other steps to strengthen the audit, financial reporting and risk management functions relating to broker-dealers. Broker-dealers, as well as audit committees of public...

Extraterritorial Application of Criminal Securities Fraud Liability: Second Circuit Extends Morrison v. National Australia Bank Ltd. to Criminal Cases; Rules that Section 10(b) Does Not Reach Fraud Committed Abroad Involving Non-U.S. Listed Securities
, September 13, 2013
On August 30, 2013, the Second Circuit answered a question left open in the Supreme Court’s landmark decision in Morrison v. National Australia Bank Ltd., 130 S. Ct. 2869 (2010): do the limits imposed in Morrison on extraterritorial civil liability encompass criminal and SEC enforcement...

Adjusting to Shareholder Activism: Active Shareholders are the New Normal, Placing a Premium on Management Preparedness, Board Awareness and Ongoing Shareholder Engagement for Public Companies
, August 24, 2013
The results of the 2013 proxy season and other recent corporate governance developments have demonstrated that boards and management teams should thoughtfully assess their approach to dealing with hedge funds and other “long” investors that are considered “activist.”...

CFTC Adopts Final Rule Amendments Harmonizing Compliance Obligations for Dually-Registered CPOs and Modifying Regulatory Requirements for CPOs and CTAs
, August 23, 2013
CFTC’s Final Rule Permits CPOs of Registered Investment Companies to Fulfill Certain CFTC Compliance Obligations Through Substituted Compliance with the SEC Regime and Amends Certain Disclosure and Reporting Requirements for all CPOs and CTAs; SEC Simultaneously Issues Guidance on Use of...