Practice/Industry Group Overview
Exchange-traded product sponsors entering uncharted legal territory engage Sutherland attorneys to help chart the course to maximum profit potential.
Significant changes to financial services regulation have allowed for the increased development and growth of exchange-traded funds (ETFs). The same goes for related products, such as exchange-traded notes (ETNs) as well as physical and financial commodities-based exchange-traded vehicles (ETVs). Every day seems to present new offerings and structures. Sutherland guides exchange-traded product sponsors through complex and uncharted legal territory to find creative solutions that help clients bring novel products to market in an efficient and timely manner, while also maximizing profit potential.
Our highly-regarded practice advises clients in developing, launching and operating ETFs, ENTs and ETVs. Our clients include a commodity pool operator who developed and operates one of the first exchange-traded commodity pools investing primarily in energy-based futures contracts and swaps. We advised other clients on the development of ETFs to invest in cleared and uncleared credit default swaps, on leveraged and inverse leveraged commodity ETVs, as well as commodity-index ETVs, and on ETFs that invest in U.S. Treasury securities and foreign currencies. Each of these clients is, in its own way, breaking new ground and each requires innovative legal solutions to newly uncovered issues.
Not only do our clients benefit from the knowledge and strength of our ETF team, they can also draw on the relevant experience of our other practices. Sutherland attorneys are leaders in the field of federal securities law, are on top of the latest developments in the rapidly expanding derivatives arena, grasp the implications of intellectual property law on ETFs, and the effects of federal and state taxes for ETF and related financial products.
Full-spectrum ETF experience. Sutherland's attorneys advise clients on legal matters pertaining to the formation, registration, operation, distribution and restructuring of ETFs and other exchange-traded products.
Dodd-Frank focus. Sutherland lawyers are well-versed with the new requirements’ impact on collective investment entities and derivatives users under the Dodd-Frank Act. We closely monitor the rules, both proposed and final, the CFTC, SEC and other regulations under the Act.
Product launches and investment management. We counsel our clients on structuring and launching a new investment product as well as aiding them in effective management of existing ETFs. This includes compliance, industry and regulatory developments, distributions, derivatives and tax issues.
Board counsel. We serve as independent counsel to the independent directors or trustees of several mutual fund and BDC groups offering guidance about a variety of issues confronting directors or trustees.
Regulatory defense. Our team regularly represents clients confronted with investigations, enforcement actions and disciplinary proceedings brought by the CFTC, SEC and bank regulators. Our experience includes high-profile cases as well as more repetitive regulatory matters.
Intellectual property. In the financial sector, our intellectual property attorneys work closely with our Corporate Practice Group in preparing patent applications for ETF/ETV products and trading tools that currently exist in the marketplace.
Taxes and ETFs. Sutherland has a nationally recognized tax practice with attorneys who advise on virtually every area of federal, state and local taxes. We are leaders in balancing business objectives with the constraints of tax laws to find solutions that meet clients’ goals.
Nuts and Bolts
We represent the whole spectrum of participants in the investment management industry:
- ETFs, ETNs, ETVs and other exchange-traded products
- Mutual funds
- Hedge funds
- Private equity funds
- Business development companies (BDCs)
- Securitization vehicles
- Separate accounts
- 529 plans
- Pension plans
- Commodity pool operators
- Commodity trading advisors
- Investment advisers
- Plan administrators
- Transfer agents
- Real estate funds
We provide full coverage of investment management industry issues:
- Design and organization of investment vehicles and their sponsors
- Counseling on securities law, tax law and other matters
- Counseling boards of directors
- Disclosure documents and regulatory filings
- Defense of regulatory inquiries, investigations and enforcement actions
- Organization and regulation of distribution systems
- Design, production and evaluation (audit) of compliance systems
- Mergers and acquisitions
We maintain close contact with the all relevant regulators:
- Commodity Futures Trading Commission (CFTC)
- Financial Industry Regulatory Authority (FINRA)
- Industry associations
- Internal Revenue Service (IRS)
- Securities and Exchange Commission (SEC)
- State securities, tax and insurance regulators
Sutherland is a member of the key organizations affecting the derivatives markets including:
- International Swaps and Derivatives Association, Inc. (ISDA) and its key committees
- Futures Industry Association (FIA)
- Managed Funds Association (MFA)
- Emerging Markets Trade Association (EMTA)
- Loan & Syndicated Trading Association (LSTA)
- Securities Industry & Financial Markets Association (SIFMA)
- American Bar Association’s Committee on Derivatives and Futures Law of the Business Law Section
As the growth in exchange-traded funds, notes and vehicles continues, it’s vital that sponsors have access to highly sophisticated legal thinking about ETFs. Sutherland attorneys are positioned on the cutting edge of developments in this segment of the investment world.
Sutherland represents major ETF sponsor in launch of innovative financial products.
Sutherland advised a major exchange-traded fund (ETF) sponsor on the development and launch of various complex ETFs, such as commodities-based ETFs, and other innovative financial products that combine elements of mutual funds, commodity pools and ETFs.
Sutherland represents a series of energy, metal and agricultural ETFs.
Sutherland represented a series of exchange-traded commodity funds in connection with initial and follow-on public offerings having an aggregate value in excess of $90 billion. Our representation also included periodic reporting requirements under the Securities Act of 1933, the Securities Exchange Act of 1934 and complying with registration/position limits and on disclosure and other requirements promulgated by the CFTC, exchanges, FINRA and the National Futures Association.
Sutherland counsels exchange-traded commodity pools.
Sutherland counsels exchange-traded commodity pools and commodity pool operators (CPOs) on all aspects of their operations including structure, governance, initial public offerings and follow-on offerings, as well as compliance with requirements of the SEC, CFTC, NFA and the NYSE Arca, including those imposed as a result of the Dodd-Frank Act.
Articles Authored by Lawyers at this office:
SBA Adopts Final Passive Business Rule Impacting BDCs with SBIC Subsidiaries
Cynthia R. Beyea,Steven B. Boehm,Terri G. Jordan,Cynthia M. Krus,Ingrid E. Messbauer,Lisa A. Morgan,Harry S. Pangas,Sara Sabour, January 24, 2017
On December 28, 2016, the Small Business Administration (SBA) released the final version of the Passive Business Rule (the New Rule) under § 107.720 of the small business investment company (SBIC) regulations.1 Among other provisions, the New Rule expands the permitted use of holding companies...
SEC Adopts Amendments to Regulation S-X Applicable to BDCs
Cynthia R. Beyea,Steven B. Boehm,Cynthia M. Krus,Lisa A. Morgan,Harry S. Pangas, December 14, 2016
On October 13, 2016, the Securities and Exchange Commission (SEC) issued a release adopting final rules to modernize and enhance the reporting and disclosure of information by registered investment companies (the Final Rules). Though the Final Rules primarily address the reporting and disclosure...
SEC Adopts Rules to Modernize Information Reported by Registered Investment Companies
Frederick R. Bellamy,Cynthia R. Beyea,Steven B. Boehm,James M. Cain,Cynthia M. Krus, December 09, 2016
On October 13, 2016, the Securities and Exchange Commission (the SEC) issued a release adopting final rules to modernize and enhance the reporting and disclosure of information by registered investment companies (the Final Rules).1 The Final Rules are part of the SEC’s initiative to enhance...
SEC Adopts Liquidity Risk Management Rules for Mutual Funds and Other Open-End Investment Companies
Frederick R. Bellamy,Cynthia R. Beyea,Thomas E. Bisset,Steven B. Boehm,James M. Cain, November 14, 2016
On October 13, 2016, the SEC approved new Rule 22e-4 under the Investment Company Act of 1940, as amended (the 1940 Act), which will require certain open-end investment companies other than money market funds, to adopt and implement written liquidity risk management programs.1 In addition, new Rule...
SEC Adopts Changes to Form ADV and Books and Records Rules
Eric A. Arnold,Clifford E. Kirsch,Michael B. Koffler,Susan S. Krawczyk,Holly H. Smith, September 19, 2016
On August 25, the Securities and Exchange Commission (the SEC) adopted amendments to Form ADV Part 1 that will require SEC-registered investment advisers to provide a significant amount of new information.1 The SEC adopted these amendments to Form ADV to improve the depth and quality of information...
ISDA Publishes Variation Margin Protocol
Brian Barrett,James M. Cain,Catherine M. Krupka,David T. McIndoe,Mark D. Sherrill, August 24, 2016
On August 16, 2016, the International Swaps and Derivatives Association, Inc. (ISDA) published the ISDA 2016 Variation Margin Protocol (VM Protocol). The VM Protocol is intended as a tool to help market participants that will be subject to regulatory variation margin requirements,1 and their...
Venture Global LNG Closes Additional $15 Million Funding Deal
, August 24, 2016
Venture Global LNG, Inc., announced that it has closed a fifth round of equity investment, raising additional capital of $15 million and bringing the total capital raised to date to over $280 million. The proceeds will fund Venture Global LNG’s proposed 10 million tonnes per annum (MTPA)...
Shell Delays FID for Lake Charles LNG Export Terminal
, July 29, 2016
Reuters reports that Shell has indefinitely delayed a final investment decision (FID) for its affiliate BG Group’s proposed Lake Charles LNG export terminal at Lake Charles, La. In February, Shell Canada, primary sponsor of LNG Canada, indefinitely postponed an FID on its proposed LNG export...
Questions Remain Regarding Impact of Brexit on Fund Managers
, July 27, 2016
Although the dust has somewhat settled following the historic “leave” vote on June 23, 2106, in which voters in the United Kingdom elected to leave the European Union, many questions remain. Of particular importance to fund managers based in the UK is the question of Brexit’s...
SEC Issues Guidance on Business Continuity Planning for Registered Investment Companies
Cynthia R. Beyea,Steven B. Boehm,Michael B. Koffler,Cynthia M. Krus,Lisa A. Morgan, July 15, 2016
On June 27, the staff of the Securities and Exchange Commission’s (Commission or SEC) Division of Investment Management (IM) issued a Guidance Update on business continuity planning for registered investment companies (funds).1 The Guidance Update provides the staff’s view on what funds...
Major Companies Invest In Ride-Hailing Companies
, May 27, 2016
Two major car manufacturers have recently invested in ride-hailing companies, signaling their interest in and commitment to the mobility services market. Volkswagen AG is investing $300 million into Gett Inc., and Toyota Motor Corp. is investing in Uber Technologies Inc. Toyota’s partnership...
Venture Global LNG Closes Additional $55 Million Funding Deal
, May 06, 2016
Venture Global LNG, Inc. (Venture) announced the successful closing of its fourth round of equity investments to fund its proposed liquefaction and LNG export terminal on the Mississippi River in Plaquemines Parish, La. According to the press release, the “round also is notable for adding to...