5 Paternoster Square
London, EC4M 7DX
Times Square Tower
7 Times Square
New York, NY, 10036
31st Floor, AIA Central
1 Connaught Road Central
- Related Practices
Derivatives and Structured Products
Complex derivatives and synthetic products considered novel just years ago are now standard tools for managing investment portfolios, fine-tuning risk exposure, and executing transactions in the face of volatile and uncertain markets. Every day, new and sophisticated derivative-based structured products are employed to accomplish specific financial objectives that may not be otherwise achieved. Success in this new world necessitates dedicated legal advisors with the global reach and diverse experience to quickly analyze legal and regulatory issues — and the business acumen and market insight to quickly structure, document, negotiate, and close transactions wherever and whenever opportunities materialize.
O’Melveny’s Derivatives and Structured Products team comprises seasoned lawyers resident in key financial centers in the United States, Europe, and Asia. Our lawyers possess an intuitive understanding of the factors that drive success in complex financial arrangements — we have formed and managed derivatives divisions and trading desks within major banks, and were “present at the creation” of many of the instruments now in common use. Our potent structured finance, securitization, fund formation and regulatory, insolvency, and litigation capabilities — and our strong working relationships with key financial players, regulators, rating agencies, and accountants — keep us at the forefront of market developments and trends.
Our Derivatives and Structured Products lawyers work together as part of a multi-disciplinary and multi-jurisdictional team. We can marshal the full resources of an elite global law firm — including top-tier corporate finance, securities, regulatory, tax, commodity, ERISA, insolvency and restructuring, M&A, and litigation capabilities — to offer commercial banks, investment banks, securities dealers, hedge funds, investment managers, private equity investors, asset managers, issuers, and other financial institutions a synthesized, panoptic view of the broader possibilities when utilizing derivatives and structured products.
Given our broad experience, we have unparalleled experience in analyzing virtually all aspects of distressed derivative, structured products, funds and securitized products allowing us to help evaluate and advise on credit and market risk issues to troubled counterparties. We set up funds and vehicles to acquire troubled assets sometimes through the use of derivatives and structured products. Working with our insolvency and restructuring lawyers we represent clients exposed to bankruptcies of financial entities and dealers.
Working with derivative and structured products clients, we help conduct document portfolio reviews to determine overall exposure risk, and then reduce the overall risk by implementing counterparty risk management strategies and improving documentation. To mitigate portfolio risk, we develop, structure, negotiate, and document enforceable master netting agreements and enhance the clarity and enforceability of rights in derivatives contracts and other financial products — including the auction process and methodology in credit default swaps, and termination rights and strategies for contending with counterparty insolvency. Dealing with derivatives and structured products in insolvency and restructuring situations, we advise on events of default under master agreements, termination and close-out strategies, mandatory and contractual set-off, and the filing and proving of claims arising from derivative positions in an insolvency as well as implementing strategies for dealing with open derivative (and cash) positions in the context of a restructuring. We also advise extensively on the occurrence of events in relation to the underlying asset, including the occurrence of Adjustment Events, Extraordinary Events, and Credit Events under the relevant ISDA definitional booklets. We also participate on a number of ISDA committees relating to policy, trading, market, and credit risk issues and have chaired definitional booklet committees. In addition, we participate globally in numerous regulatory and self-regulatory organization committees.
We offer a compelling combination of speed, proficiency, and sophistication on a global scale. As the world forges ahead in a new global economy defined by increasingly scarce liquidity and diminishing reliance on traditional debt finance, O’Melveny’s Derivatives and Structured Products team have the knowledge base and experience necessary to help clients find solutions to tough problems.
- Our Derivatives and Structured Products Practice group consists of lawyers in key financial and regulatory centers in New York, Washington, DC, California, London, Hong Kong, Singapore, and Tokyo.
- Our team offers proven, results-oriented counseling backed by decades of experience and impeccable professional credentials — we count among our ranks former senior officials with the US SEC and Department of Justice, former Wall Street investment bankers, former private equity investors, and lawyers active with FINRA and ISDA. And we’ve served as managing directors, heads of legal departments, and new products committee members in the New York, London, Hong Kong, and Tokyo branches of major international banks. Leading financial institutions have sought O’Melveny lawyers to fill the top ranks of their legal departments.
- We are dedicated financial products lawyers whose capabilities span the full range of derivatives and structured products-related activities, including new product development and structuring, sales practices, hedging and settlement issues, repackaging programs, regulatory and trading-related advisory work, bankruptcy and tax advisory work, forensic portfolio reviews, financing vehicles and conduits, and financial product line and portfolio acquisitions and dispositions. And we work closely with our colleagues in the Firm’s regulatory, tax, intellectual property, bankruptcy, and litigation practices, among others, to provide comprehensive and integrated counseling.
- We are recognized for our outstanding work by American Lawyer Media, who notes that O’Melveny is “the ‘go-to’ law firm for financial services companies.”
- We are positioned to bring cutting-edge and real market experience to bear on behalf of our clients and often function as our clients’ partners in designing new products, assisting in concept development, providing risk and regulatory analysis and preparing documentation.
- Our clients include the derivatives, commodities and structured products groups at numerous investment and commercial banks, commodity dealers and users, insurance companies, mutual funds, hedge funds, asset management firms, and other financial institutions.
Including advising and managing regulatory inquiries into trading activities and sales practices of major dealers and financial firms, and pursuing or defending against fraud and breach of contract claims involving derivatives and structured products.
Esoteric Asset Classes
Including insurance premium finance, and novel transactions involving life settlements and intellectual property royalties and film financing.
Including advice on managing counterparty credit risk, exercise of remedies, proving claims in insolvency, protecting and advancing client interests in the case of major financial institution insolvency, and cross-border insolvency proceedings.
(An extraordinarily wide spectrum of credit, equity, fixed income, commodity, energy, hedge fund (including CPPI products), insurance, weather, inflation, issuer derivatives and a wide range of hedging and monetization transactions, including through total-return swap facilities or option-based products), and acquisitions and dispositions of product lines and trading desks.
Including defense of financial institutions in investigations by the SEC, FINRA, state securities regulators, and federal and state criminal prosecutors, and compliance with various regulations governing broker-dealers, investment advisors, and other financial institutions in the US and elsewhere.
Including collateralized loan, debt, and bond obligation transactions; we handled some of the first securitizations of stranded costs, automobile leases, residual value risk, casualty risk, entertainment receivables, and charged-off receivables.
Including derivatives-linked securities, repackaged securities, credit-linked notes, total return swaps, credit default swaps, hedge fund-linked, and principal protected securities, traded or newly created indices, grantor trust and business trust structures.