Troutman Sanders’ attorneys have a long-standing broad range of experience in the trading and marketing of energy, commodities and derivatives products in both the United States and abroad. Our extensive knowledge and experience encompasses not only the trading and marketing of such products, but also the hedging and management of associated risks through swaps, options, futures and other derivatives products.
Our Clients
Our clients include an expansive and diverse range of organizations, companies and institutions currently engaged in the global trading and marketing of energy, commodities, swaps, options, futures and other derivatives and financial products. We have advised some of the world’s most sophisticated trading and marketing organizations in their marketing, trading and risk management activities. Specific clients include financial institutions, hedge funds, private equity funds, investment managers, investor owned utility companies, independent power companies, interstate and intrastate pipeline companies, gas distribution companies, industry trade associations, energy marketing partnerships, wholesale and retail niche players, private and public companies, private individuals, real estate investment trusts (REITS) and other market participants.
Our Experience
Over-the-Counter Product Experience
Troutman Sanders’ attorneys have a great depth of experience in structuring, drafting and negotiating various trading, hedging and marketing arrangements for over-the-counter (OTC) physical and derivatives products. We regularly advise on all types of strategies and products, such as option and total return strategies and equity, credit, interest rate, environmental and other derivatives products. In assisting our clients, we have prepared and customized countless International Swaps and Derivatives Association (ISDA) Master Agreements (both 1992 and 2002 versions), Edison Electric Institute (EEI) Master Agreements, North American Energy Standards Board (NAESB) Agreements, proprietary form master agreements, contracts for differences for energy risk management and other over-the-counter derivatives trading documentation.
Notably, we have deep experience in the early termination and close-out netting mechanisms of such industry agreements and regularly provide advice to clients with respect to the treatment of forward contracts, swap agreements and other financial contracts under the United States Bankruptcy Code, Federal Banking Laws, the New York State Banking Law and the Dodd-Frank Act. For instance, we have provided to the European Federation of Energy Traders (EFET) a memorandum of law on the enforceability of the early termination and close-out netting provisions of the EFET General Agreement. In addition, we have provided to financial institutions memoranda of law on the enforceability of the early termination and close-out netting provisions of the EEI Master Agreement and NAESB Base Contract.
In order to stay at the forefront of the OTC market, Troutman Sanders’ attorneys are highly involved in various industry trade associations. Troutman Sanders is a member of ISDA, and firm representatives serve on several ISDA working groups and committees, including its Global Energy, Commodities & Developing Products committee and Equity Derivatives committee. The firm remains an active participant in the Edison Electric Institute (EEI) which it has done since EEI’s inception, participating in the development of the EEI Master Agreement employed for North American power trading as well as the EEI Gas Annex and the EEI Coal Trading Annex. The firm was also an active participant in the development of the NAESB Base Contract for trading natural gas in North America.
Cleared and Exchange-Traded Product Experience
Troutman Sanders’ attorneys have counseled clients wishing to make use of centralized third party services for clearing of both exchange-related trades and over-the-counter physical and derivatives transactions. In doing so, we have reviewed and negotiated on their behalf, and have advised as to the risks of (including collateral management), various access agreements with the major providers of these services in the US and Europe.
Regulatory and Compliance Experience
On the regulatory and compliance fronts, Troutman Sanders’ attorneys have been actively advising our clients with respect to the Dodd-Frank Act and the regulations being promulgated thereunder by providing up-to-date guidance as the rulemaking process continues under many of the Titles to the Dodd-Frank Act. We have submitted comment letters on behalf of clients to the Commodities Futures Trading Commission (CFTC) in connection with their rulemaking under the Dodd-Frank Act, as well as meet with staff and commissioners of the CFTC on behalf of clients. Further, we have developed documentation to aid clients in compliance with the Dodd-Frank Act, such as policies and procedures and “end-user” to “end-user” trading documentation. In addition, we advise our clients with respect to securities law, Commodity Exchange Act, Federal tax and ERISA issues in connection with the structuring and trading of commodities and derivatives.
Bankruptcy, Work-out and Restructuring Experience
With the failures of several large financial institutions (including futures commission merchants) over the last several years giving rise to various close-out mechanisms across several industry standard trading agreements, Troutman Sanders’ attorneys have been counseling financial institutions and end-users on their early termination close-out netting and other close-out rights under their agreements and related guaranties. We have represented our clients in numerous diverse matters in such cases as Lehman Brothers Holdings Inc., Lehman Brothers, Inc., Calpine Corporation, MF Global Inc. and MF Global Holdings Ltd. and are conversant with both the Securities Investor Protection Act and the Commodity Exchange Act as they relate to financial contracts and rights to margin. We have not only prepared proofs of claim and negotiated resolution of objections thereto but also have participated in various proceedings pursuing clients’ rights and seeking return of their “client assets”. We also have represented our clients in their sales of claims allowed in bankruptcy cases and SIPA proceedings.
Summary
Troutman Sanders’ diverse client base and global experience provides us with a deeper understanding of today's market. Whether your company is an established trading company, a new entrant in the energy, commodities and derivatives trading and marketing fields, a market participant looking to expand or diversify its physical or financial portfolios, or an end-user looking to realize cost savings or to hedge risks in the marketplace, the market offers many opportunities, but many risks as well. Troutman Sanders has the experience and resources to help clients successfully execute on market opportunities while navigating them through the risks.
