Derivatives Documentation School

5 days 25-29 Sep 2017, Singapore Singapore $6,800.00 Download brochure Add to basket

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Overview

This course is made up of three separately bookable modules:

 

Swaps and derivatives have become more and more complex every year, and have been subjected to intense regulation. Products such as credit derivatives and equity derivatives and the use of derivatives in financing structures pose particularly interesting and significant issues. New laws and regulations are changing the practices and conventions of the OTC derivatives market. The advanced modules of this course focus on these issues and are specifically designed for delegates who have mastered the basic issues but are facing the challenges of these new and complicated applications. As the range of users and applications of
swaps and derivatives increase, so the legal and documentation problems become more difficult and require ever more sophisticated techniques.

This 5-day School fully explains the legal aspects of swaps and derivatives and derivatives in structured financing. You will gain a complete understanding of the key legal issues in swap documentation, and in
particular the important problems of default, insolvency and enforcement.


 

Instructors

We work with a series of expert instructors, please select the course location of interest to review the credentials of who will be delivering the programme.

Singapore
Schuyler K Henderson
Schuyler K. Henderson, author of 'Henderson on Derivatives', is one of the leading international derivative lawyers. Since 1977 he has been resident in London, during which he has represented numerous international financial institutions in the full range of credit extensions. He has been particularly active in he derivatives market, having acted for one of the participants in the first publicised currency exchange agreement in 1977.

Since then he has been actively involved in the creation of innovative financial products on behalf of over fifty financial institutions. His practice has regularly included: developing new products; structuring, drafting and negotiating complex financings, including repackagings, credit-linked securities and tax or regulatory drive structured transactions; preparation of standard form ISDA® documentation (including for use with specialised counterparties and confirmation templates for virtually all types of derivatives); supervision of backlog documentation and establishment of derivatives dealers in a number of jurisdictions, provision of regulatory, enforcement and tax advice in respect of over 30 jurisdictions; enforcement of
derivatives documentation and representation of parties in disputes involving derivatives.

Since retiring he has continued to consult, lecture and write on derivatives. Schuyler is the author of numerous publications on financial topics, and is a member of the Editorial Advisory Board of The Law and Financial Markets Review. He is a regular speaker and chairman at various conferences on international finance in many international financial centres.

Venue

Singapore

4-5 Star Hotel in Singapore

All of our courses are held in 4 – 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.

Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

Related Courses

Inhouse


 

Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. You could even save up to 50% on the cost of sending delegates to a public course.

To find out more about running this course in-house:





Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists ensure you get the maximum return on your training investment.

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We can offer any of our public courses delivered at your office or we can devise completely tailored solutions:


Read more about our offering or complete a call back request to speak to a learning specialist.

 

Agenda

Day 1



Introduction and Welcome

The Derivatives Markets and Their Uses

  • The markets
  • Definitions
  • The tensions and key concepts

Description and Uses of Basic Derivative Structures

  • Swaps
  • Fully-paid transactions


Derivatives Risk

  • Legal and operational risk
  • Position or market risk
    - Valuation and hedge risks
  • Delivery risk
  • Long term exposure: rate risk and performance risk
  • Quantification of credit risk

Close-out Netting and Insolvency Issues

  • Summary of US and UK insolvency issues
  • Enron: MARTA
  • Lehman Brothers; Metavante and English cases

Capacity and Authority

  • Hammersmith & Fulham, Piraeus
  • Resolutions
  • Signatories
  • Funds and other special counterparties



Regulation

  • Regulation overview
  • Capital: Basle and Basel II Accords; Basel III


Tax

  • Direct tax in another jurisdiction
  • Withholding tax
  • ISDA structure
  • HIRE Act and FATCA


Accounting

  • FAS 133
  • IFRS 9




Day 2



Introduction: Need for Documentation and Functional Analysis

  • Avoiding uncertainty
  • Financial provisions: confirmations and definition booklets
  • Legal, credit and trading relationship: master agreement



ISDA Agreements and Other Derivatives Documentation

  • Overview
  • Evolution of documentation: 1977-2017
  • Architecture of documents
  • Fitting together the ISDA components
  • One master for all products/Offices?


Confirmations

  • Oral trades, confirmations and confirmation process
  • Backlogs
  • Electronic confirmations
  • Trading platforms
  • 2005/6 Fed initiative


Confirmation Workshop

  • Prepare an interest rate swap confirmation



ISDA Master Agreement (provision-by-provision)

  • Sections 1-4


ISDA Master Agreement

  • Sections 5-6
    - Grounds and procedures for termination
    - How to calculate close-out values
  • Drexel, Nuova Safim, ANZ/Societe Generale, High Risk, Peregrine I and II, TXU/Enron, Marine/Pioneer, Firth Rixson, Oppenheim and Brysons



ISDA Master Agreement

  • Sections 5-6 continued




ISDA Master Agreement: Section 7

  • Concepts
  • ISDA forms
    - Novation Protocol
  • Negotiated terminations


ISDA Master Agreement: Sections 8-14

  • Branch and multi-branch issues
  • Notice issues
  • ISDA Arbitration Guidelines





Day 3



Suitability/Misrepresentation

  • Bankers Trust Cases
  • Cases: Kwiatkowski, Eternity, PowTel/SunTrust
  • Nonreliance representations and disclosure documents

Credit Enhancement

  • Guarantees
  • Collateral
  • Rehypothecation
  • Partial?


ISDA Credit Support Documents

  • CSA
  • SCSAs
  • Disputes



Key Developments prior to 2008

  • Dealer dominance
  • Transaction facilitators: DTCC, Markit, Creditex
  • Master confirmation agreements
  • The 2005 Fed initiative and its aftermath
  • The credit default swap market: indices and protocols
  • Electronic platforms


Prime Brokers

  • Description and issues
  • Give-up and compensation agreements


The Credit Crunch, Its Causes and Its Uses

  • US real estate, CDOs
  • AIG



The Impact of Dodd-Frank and EMIR on Asian Counterparties

  • Summary of Dodd-Frank and EMIR
  • Status and representations
  • Margin requirments


CCPs: Structural Case Studies

  • Formal incorporation and regulation
  • Risk committee
  • Documentation
  • Relationships: who is your counterparty?
  • Margining
  • Guaranty fund
Day 4



Equity Derivatives: the Market and Products

  • The market
  • Forms and uses
  • Other uses
    - Equity-funding deposit swap
    - Takeover legislation (Perry)
    - Employee offering (Marconi)
    - Equity share derivatives
  • Equity index derivatives


2002 ISDA and 2011 Equity Derivatives Definitions

  • Products; the dealing market
  • Trading (hedge disruptions)
  • Index events
  • Extraordinary events (mergers, recapitalizations, etc)
  • Fallbacks
  • Knock-in/out events
  • Additional disruption events; hedging issues
  • Calculation Agent; Determining Party
  • Additional representations and acknowledgements
  • Master equity derivatives confirmation agreements

2011 ISDA Equity Derivatives Definitions Structure

  • Modular approach
  • Structure
    - Main book
    - Appendix
    - Transaction Matrix
    - T-Supp (confirmation)
  • Drafting devices
  • Legs
  • Primary Features
    - Swap
    - Option
    - Forward
  • Underliers
  • Exchanges
  • Days and dates
    - Scheduled etc
  • Calculation Dispute Resolution Procedure


Commodity Derivatives and Commodity Derivatives Definitions

  • The Market and products
  • ISDA 2005 Commodity Derivatives Definitions
    - Basic provisions


Credit Derivatives

  • Overview of market
  • Default swaps
  • Baskets: leverage or diversification
  • Uses
    - Hedging
    - Investment
    - Capital reduction
  • Physical and cash settlement


2014 ISDA Credit Derivatives Definitions: Overview

  • Reference Entity
  • Credit Events (Obligations and Credit Event): issues


2014 ISDA Credit Derivatives Definitions (continued)

  • Physical and cash settlement: issues
  • Dealing market choices: compromise; standard
  • Indexes

Module Concludes 


Day 5



Introduction

Derivatives Linked to Investments and Loans

  • Price arbitrage
    - Asset swaps
    - Bond issues
  • Change rate basis of loan
  • Currency option built into loan
  • Project financing
  • Common threads


Project Financing Linked to Derivatives

  • Different strucures


Principles of Structured Derivatives

  • Tricks
  • Embedded derivatives: principal protected/unprotected
  • Issuing vehicles: program issuers, SPVs and rating agencies
  • Caveats: recharacterisation and reputational risks


Structured Notes

  • Indexed security; tracker bonds/certificates of deposit
  • Reverse floaters and PERLS: embedded swap
    - Leverage
  • Credit linked notes: embedded credit default swap
    - Broad selections
    - Exposures



Common Issues

  • Calculation agent
  • Prohibited transactions
  • Hedging and self-dealing
  • Disclosure
  • Tax issues


Structured Issuers

  • SPV issues
    - Credit supplied independent of originator
  • Rating agency requirements
  • Enron structures
  • Monetized put and call: deferred sale of securities
    - Hedge issues
  • Transformer companies
  • Repackaging: yield enhanced note based on asset swaps
    - Clean, yield-enhance note; complexity at issuer level
    - Credit issues


Synthetic Securitisation

  • CMOs, CLOs, CBOs and CDOs
  • "Traditional" vs synthetic securitisation - considerations
  • Risk transfer mechanisms
  • Credit loss determination
  • Allocation of losses
  • Documentation issues



Issues in relation to the ISDA Master Agreement

  • Rating agency requirements
  • Termination close-out calculations: default or external illegality or tax
    - Commonly overlooked issues
  • Program issuers: note payments on an unanticipated early termination?
    - Commonly overlooked exposures


Suitability and Misrepresentation in Structured Transactions

  • Transparency of pricing, hedge risk and liquidity
  • Bankers Trust cases, Caiola, Korea Life
  • PERLS and Puglisi
  • Springwell
  • Peekay
  • Enron related lawsuits and administrative proceedings
    - Reputational issues
  • EU: “producer” liability and pricing disclosure


Questions and Discussion



 

Why us


We have a combined experience of over 60 years providing learning solutions to the world’s major organisations and are privileged to have contributed to their success. We view our clients as partners and focus on understanding the needs of each organisation we work with to tailor learning solutions to specific requirements.

We are proud of our record of customer satisfaction. Here is why you should choose us to help you achieve your goals and accelerate your career:

  • Quality – our clients consistently rate our performance ‘excellent’ or ‘outstanding’. Our average overall score awarded to us by our clients is nine out of ten.
  • Track record – we have delivered training solutions for 95% of worlds’ top 100 banks and have trained over 250,000 professionals.
  • Knowledge – our 150 strong team of industry specialist trainers are world leading financial leaders and commentators, ensuring our knowledge base is second to none.
  • Reliability – if we promise it, we deliver it. We have delivered over 20,000 events both in person and online, using simultaneous translation to delegates from over 180 countries.
  • Recognition – we are accredited by the British Accreditation Council and the CPD Certification Service. In an independent review by Feefo we scored 96% on service and 95% on product