Practice/Industry Group Overview
Clients that trade commodity futures, swaps and other derivatives ask Sutherland for guidance on regulatory, transactional and enforcement matters.
Decades of work with the energy industry and a thorough grounding in the regulations that impact derivatives come together in Sutherland’s Energy and Commodities Derivatives practice. Our team, composed of more than 20 lawyers and other professionals, advises clients on regulatory, transactional and enforcement matters related to the trading of commodity futures, swaps and other derivatives.
Sutherland provides practical counsel, advising clients on the fundamentals of commodities trading while using plain English to explain the complexities of derivatives law. Our advice is informed by a deep understanding of how our clients use commodity derivatives, the commodity markets and our working relationships with applicable regulatory authorities, including the Commodity Futures Trading Commission (CFTC), Federal Trade Commission (FTC), Federal Energy Regulatory Commission (FERC), Securities and Exchange Commission (SEC) and the Department of Justice (DOJ).
Sutherland is a leading adviser to commodity trading firms, energy companies, financial entities and commercial end users that engage in derivatives trading, for both hedging and speculative purposes. As commercial firms adapt to derivatives reform under the Dodd-Frank Act, we have worked closely with our clients to determine the requirements applicable to their businesses and to design and implement related compliance and operational measures. We have been a prominent advocate on behalf of our clients in all legislative and regulatory phases of derivatives reform, and our work now extends to implementation and compliance, as well as preparation for regulatory audits and enforcement activity. Our lawyers help firms evaluate how derivatives reforms apply to their unique businesses and to adapt their trading practices and organizational structures. Our team provides advice from the board room to the back office, all with seamless understanding of how critical the use of derivatives can be to commercial businesses.
Regulatory knowledge. New and evolving regulations have profoundly affected the energy and commodities derivatives market. We actively work to make sure our clients’ voices are heard throughout the rulemaking process. Once regulations are finalized, we ensure clients thoroughly understand and implement them.
Experience. We have been leaders in the derivatives market since the birth of the swap market, and we have guided clients through energy trading for more than 40 years.
Compliance. Along with Dodd-Frank, clients must comply with a host of other regulations, including the CFTC’s trading practices and market manipulation prohibitions and U.S. competition and antitrust laws, anti-money laundering regulations, restrictions on international trade, sanctions and antiboycott regulations. We help our clients stay in compliance with all the laws that affect their operations, and guide them through any issues that may arise.
Enforcement. We currently represent clients in enforcement matters brought by the CFTC and various SROs. Our decades of experience in enforcement actions involve actions including criminal proceedings, civil cases, investigations and audits.
Thought leadership. Our attorneys are active members of the key organizations affecting derivatives markets, including International Swaps and Derivatives Association (ISDA), Futures Industry Association (FIA), Managed Futures Association (MFA), Emerging Markets Trade Association (EMTA), Loan & Syndicated Trading Association (LSTA) and Securities Industry & Financial Markets Association (SIFMA). We also actively participate in the American Bar Association’s Committee on Derivatives and Futures Law of the Business Law Section.
Larger energy and derivatives practices. The Energy and Commodities Derivatives team is part of Sutherland’s broader Energy and Commodities Practice Group. With lawyers in the energy, financial and regulatory centers of Houston, New York and Washington, our firm has become one of the most knowledgeable in physical commodity transactions. Sutherland also enjoys a robust derivatives practice handling transactions in interest rate, currencies, equities and credit. We handle many structured transactions, including ETFs, commodity pools, hedge funds and securitizations.
Nuts and Bolts
The Energy and Commodities Derivatives team advises clients in enforcement, investigations, rulemakings and other matters before federal regulators including:
- Commodity Futures Trading Commission (CFTC)
- Federal Trade Commission (FTC)
- Federal Energy Regulatory Commission (FERC)
- U.S. Securities and Exchange Commission (SEC)
- U.S. Department of Justice (DOJ)
Our practice also handles matters for clients in connection with the major exchanges and self-regulatory organizations including:
- National Futures Association (NFA)
- Securities Industry and Financial Markets Association (SIFMA)
- Chicago Mercantile Exchange (CME)
- Chicago Board Options Exchange (CBOE)
- New York Mercantile Exchange (NYMEX)
- InterContinental Exchange (ICE)
We guide our clients through all the legal, regulatory and compliance matters they face, including:
- Determination of status as a swap dealer or major swap participant
- Transacting with swap dealers, major swap participants and financial entities
- Transacting with special entities
- Inter-affiliate swaps
- Central clearing and mandatory facility execution
- End-user exemptions
- Capital and margin requirements
- Product classification determinations
- Recordkeeping and reporting obligations
- Compliance with business conduct standards
- Transacting swaps with non-U.S. persons or in non-U.S. jurisdictions
- Designated contract market and swaps execution facility rules
- Position limits
- Swaps documentation
As the energy derivatives business has changed, Sutherland’s practice has expanded in response to our clients’ need for sophisticated and market-sensitive advice. We are ingrained in regulatory rulemakings, and uniquely positioned to respond effectively to any legal issue a market participant may face
Sutherland represents major commercial energy firms in Dodd-Frank implementation and compliance.
We represent a cross-sector group of major commercial energy firms in the energy sector’s effort to implement and comply with the Dodd-Frank Act and related regulations. All member companies focus on delivering physical energy commodities to the market. Our representation focuses on advocacy matters before Congress and the CFTC and on developing strategies for implementing and complying with Dodd-Frank, including the development of industry standard practices, negotiation of transactions and potential enforcement issues.
Sutherland advises a major public utility holding company with respect to Dodd-Frank considerations.
We advise major public utility holding companies on the regulatory implications associated with the Dodd-Frank Act. Our work includes determining the regulatory status of key trading subsidiaries under the legislation, as well as providing regulatory advice and counsel to address corporate governance, transactional, structuring and treasury issues. There are trading subsidiaries with unique characteristics that meet the definition of financial entity. We also counsel regarding their trading activities in various organized markets operated by ISOs/RTOs.
Sutherland develops compliance manuals for trading derivatives for multiple clients.
Sutherland lawyers have developed client compliance manuals for both swap dealers and end users that establish policies and procedures for trading commodity derivatives. The manuals are updated as regulations are modified. Certain manuals are for general use, while others are highly customized. We also provide on-site and online training programs for our clients’ traders and middle and back office personnel.