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Futures and Derivatives

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Overview

Our Clients

Katten's Futures and Derivatives team advises domestic and international banks and brokerage firms, fund managers, trading advisors and proprietary trading firms. We also represent domestic and foreign exchanges, clearing organizations, and swap execution facilities.

Our Services

Our Futures and Derivatives practice encompasses exchange-traded and over-the-counter (OTC) derivatives across all asset classes and transaction types. We pride ourselves on finding commercially sensible solutions to client problems that are consistent with applicable law and regulations, and conduct our practice with an awareness of the time-sensitive and market-driven nature of the issues our clients face.

Drawing on a wealth of experience with all types of derivatives, we support clients in derivatives transactions by providing comprehensive advice on product structuring, implementation and documentation; regulatory compliance; governmental and self-regulatory organization investigations and enforcement actions; contract termination, enforcement and recovery following insolvency and other defaults; and resolution of disputes, including formal mediation, arbitration and litigation.

Close cooperation with other practices enables the Futures and Derivatives group to access the knowledge and resources of attorneys focused on ERISA, bankruptcy and cross-border work to fully serve our clients' needs. As one of the few law firms with significant experience in both exchange-traded and OTC derivatives, Katten is uniquely qualified to help clients respond to the regulatory challenges created by the convergence of those markets resulting from the Dodd-Frank Act and mandatory swap clearing.

Our approach to derivatives issues is practical, not theoretical. Katten attorneys have worked in-house for a wide range of industry regulators and participants, such as the Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission (SEC), Department of Justice (DOJ), New York Stock Exchange (NYSE), and large national and international investment banks. Katten serves as regulatory counsel to the Futures Industry Association (FIA) and the lawyers in this practice participate actively in industry and market initiatives, including the documentation projects sponsored by the International Swaps and Derivatives Association (ISDA).

Experience
  • Defense of major financial institutions (both US and non-US) against allegations of under-reporting or misreporting. Katten's work includes technology internal review, remediation, negotiation of relevant settlement documents, and extensive work with FINRA and the options exchanges.
  • Representation of a major global financial services provider in an investigation by the CFTC regarding trading of EFRPs. Katten submitted a Wells response and additional documentation; through several rounds of discussions with CFTC staff and the acting director of enforcement, we successfully settled the matter for a reduced fine and a recordkeeping charge against a single corporate entity.
  • Representation of a financial institution's commodities trading unit regarding revenue put transactions relating to the full capacity for 1,000+-megawatt combined-cycle natural gas facilities to be constructed in New York and Pennsylvania.
  • Counsel to a leading global investment banker with regard to exchange-traded derivatives, OTC options and related trading matters. Katten provides insight and advice into complicated and novel regulations affecting trading, responded to potential new trading issues, offered real-time trading advice to avoid future issues, and provides counsel after the fact when a trading activity may be problematic.
  • Provision of ongoing regulatory advice to commodity merchant and trading firms focused on the hedging of physical commodities. Katten regularly counsels clients on exchange-traded and OTC derivatives.
  • Provision of advice to a full-service brokerage and investment banking firm regarding registration as a floor trader and relevant CFTC rules.
  • Defense of a corporate investment bank against allegations that it and other banks manipulated LIBOR. Katten directs all aspects of the bank’s internal investigation and response to far-reaching discovery requests, conducts presentations to regulators, and manages the sweeping consolidated litigation and related appeals.
  • Counsel to a corporate and investment bank on the full range of issues related to exchange-traded derivatives, including evolving exchange rules, block trades, and exchange and futures-related positions and position limits. Katten also advises the firm on execution and clearance issues under US law impacting its international affiliates.
  • Representation of one of the first swap execution facilities and clearinghouses authorized by the CFTC to trade and settle derivatives contracts with digital currencies such as Bitcoin in obtaining both its SEF and DCO licenses.
  • Representation of a State government on several amendments and novations to swaps, including negotiation of lower credit rating-termination triggers for the State’s interest-rate swap deals with financial institutions.
  • Representation of a prop trading firm and its founder in connection with a CFTC suit alleging that the founder had engaged in “spoofing” and manipulated various commodity futures markets. Katten represented the clients in discovery, advised on trial strategy and negotiated a settlement in principle with the CFTC.
  • Counsel to an industry association with regard to the regulation of exchange-traded derivatives markets and market participants, with particular focus on FCMs registered with the CFTC. Katten's representation includes (1) preparing comment letters with respect to proposed CFTC rules and ESMA regulations; (2) assistance with lobbying efforts before congressional committees; (3) drafting industry-standard documents, such as the EMIR Clearing Member Disclosure Statement for use by FCMs whose clients trade on EU markets; and (4) providing market education programs.
  • Representation of a global financial services firm in an investigation by the CBOE, NFA and CFE regarding allegedly manipulative trading of options and futures on the CBOE and the CFE. The investigation concerns the client's trading in several complex financial products, including options and futures related to the volatility of an underlying exchange-traded fund. Katten handled all aspects of the case, including analysis of issues and defenses, correspondence with the regulators, document production, witness preparation, testimony, coordination of joint defense counsel for the client's employees, and representation before the CBOE Business Conduct Committee in an enforcement action.
  • Representation of a British clearinghouse in connection with its registration as a derivatives clearing organization with the CFTC, in addition to orders expanding the types of products for which the client is able to provide clearing services to US participants. Katten prepared amendments to the client’s Rulebook, Procedures and Default Rules to permit qualifying clearing clients to elect to be treated as “latent” clearing members. We also provide assistance regarding CFTC requests, such as to commingle cleared swaps customer funds and foreign futures and options customer funds in the cleared swaps customer accounts.
  • Representation of a British clearinghouse in connection with preparing and submitting to the CFTC a first-of-its-kind cross-border insolvency opinion reconciling the customer protection requirements under the US Commodity Exchange Act and US Bankruptcy Code with the requirements of EMIR. Katten also assisted the client with preparation of a cross-border insolvency memo relating to the offer of clearing services to US clearing members in relation to securities, repos and certain futures contracts.
  • Representation of a broker-dealer focused on making markets in exchange-listed equity options and futures. Katten handles day-to-day regulatory questions as well as inquiries from regulators, addressing issues relating to SEC regulations concerning market-making, market access risk controls, registration, short sales and disruptive trading practices.
  • Representation of a multinational banking and financial services company on a credit-linked note issuance referencing broadly syndicated loans and the structuring of a cutting-edge repo transaction to finance the acquisition by a CLO manager of its US risk-retention obligations.
  • Provision of registration and/or ongoing compliance advice to nine entities (eight US, one non-US) registered as swap dealers with the CFTC and FIA.
  • Provision of advice to numerous hedge funds regarding swap issues.
  • Provision of advice to government pension plans regarding swap issues.
Firm News
Articles
November 4, 2015
Advisories
Newsletters
March 28, 2016
September 21, 2015
September 14, 2015
August 31, 2015
August 24, 2015
August 17, 2015
August 10, 2015
August 3, 2015
July 27, 2015
July 20, 2015
July 13, 2015
July 6, 2015
June 29, 2015
June 22, 2015
June 15, 2015
June 8, 2015
June 1, 2015
May 18, 2015
May 11, 2015
May 4, 2015
April 27, 2015
April 20, 2015
April 13, 2015
Events
March 7, 2018
June 7, 2017
November 16, 2016
October 25–26, 2016
October 20, 2016
May 24, 2016
April 28, 2016
April 27, 2016
March 15–18, 2016
FIA Boca 2016 Conference | Boca Raton, Florida
February 25, 2016
February 9, 2016
December 8, 2015
November 11, 2015
November 5, 2015
FIA Futures and Options Expo | Chicago, Illinois
October 21, 2015
Canadian Annual Derivatives Conference | Québec City; Quebec, Canada
October 6, 2015
September 30, 2015
July 28 and July 30, 2015
June 22–23, 2015
June 9–10, 2015
International Derivatives Expo | London, United Kingdom
March 17, 2015
FOW Trading Amsterdam 2015 | Amsterdam, Netherlands
November 5, 2014
June 10–11, 2014
June 25–26, 2013
IDX International Derivatives Expo | London, United Kingdom
June 19–20, 2013
April 25, 2013
November 28, 2012
January 21, 2011
February 18, 2010
Futures and Derivatives

Recognition

Chambers Global – Capital Markets: Derivatives (USA)
Capital Markets: Derivatives (USA), 2015–2018
U.S. News Best Lawyers "Best Law Firms" – Derivatives and Futures Law (Chicago)
Derivatives and Futures Law (Chicago), 2011–2018
U.S. News Best Lawyers "Best Law Firms" – Derivatives and Futures Law (National)
Derivatives and Futures Law (National), 2011–2018
Chambers USA – Capital Markets: Derivatives (Nationwide)
Capital Markets: Derivatives (Nationwide), 2008, 2014–2018
Chambers Global – Investment Funds: Hedge Funds
Investment Funds: Hedge Funds, 2014
Legal 500 UK – Finance – Derivatives and Structured Products
Finance – Derivatives and Structured Products, 2016
Legal 500 UK – Corporate and Commercial – Financial Services (Non–Contentious/Regulatory)
Corporate and Commercial – Financial Services (Non–Contentious/Regulatory), 2014–2017
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Recognition

Capital Markets: Derivatives (USA), 2015–2018
Derivatives and Futures Law (Chicago), 2011–2018
Derivatives and Futures Law (National), 2011–2018
Capital Markets: Derivatives (Nationwide), 2008, 2014–2018
Investment Funds: Hedge Funds, 2014
Finance – Derivatives and Structured Products, 2016
Corporate and Commercial – Financial Services (Non–Contentious/Regulatory), 2014–2017

OUR CLIENTS SAY...

"The Derivatives and Futures Law group at Katten is indispensable to in-house counsel."

U.S. News – Best Lawyers® "Best Law Firms" 2016
(Derivatives and Futures Law)

Screen Reader Content

Our Clients Say: "The Derivatives and Futures Law group at Katten is indispensable to in-house counsel."

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