Derivatives and Structured Products

• A premier global distressed debt fund in a multi-billion dollar derivatives-based indenture arbitrage transaction.
• A leading life settlement asset manager in its longevity swap portfolio activities.
• A well-known asset manager in structuring a total return swap overlay of a futures portfolio to comply with 1940 Act coverage requirements.
• A leading monoline insurer in analyzing its CDS portfolio for the purpose of reducing billions of dollars of outstanding and contingent liabilities.
• A weather derivatives dealer in activities as a provider of climate-related solutions to hedge the economic impact of extreme weather conditions.

Buy-side and sell-side clients rely on Dechert in connection with a broad array of equity and fixed income derivative transactions. These clients include commercial and investment banks, dealers, issuers, holders of large equity stakes, and public, private, and proprietary investment funds, vehicles, and accounts. In particular, our team assists clients on variable prepaid forwards, total return swaps, equity collar and loan transactions, accelerated share repurchases, accreting strike call option transactions, and numerous other equity-linked over-the-counter (OTC) transactions, securities and products, as well as moving OTC transactions to central clearing and exchange trading. We also advise clients on complex single name and portfolio credit and loan default derivatives, as well as economic index, interest rate, and currency derivatives.

Dechert provides regulatory and compliance advice to many of the largest participants in the commodities and derivative markets, including numerous financial institutions and market professionals and participants. Clients turn to us for analysis of applicable regulatory requirements and constraints under the U.S. federal commodities laws and regulations and other U.S. and non-U.S. regulatory authority rules. We consider how these requirements affect client business needs and objectives across geographic borders and develop solutions to the regulatory issues presented.

For clients actively engaged in regulated commodities and derivatives activities, our lawyers help to develop compliance and risk management infrastructures, policies, procedures and best practices to ensure that the duties and obligations imposed by applicable laws, regulations, and best practices are adequately addressed. We assist clients in registering with the Commodity Futures Trading Commission (CFTC) by becoming members of the National Futures Association (NFA), preparing for regulatory inspections and compliance audits by the Commodity Futures Trading Commission (CFTC), the National Futures Association (NFA), and other U.S. and non-U.S. governmental, regulatory and self-regulatory authorities.

A large team of Dechert lawyers is involved in forming and providing operational and transactional assistance to commodity pools, hedge funds, other alternative investment vehicles and other commodity and derivatives-focused public, private, and proprietary funds, vehicles, accounts, and platforms. We help clients incorporate commodities and derivatives-based strategies into their investment programs. Dechert also is active in the offshore investment fund area, assisting clients with the establishment, operations and transactions of offshore funds, Undertakings for Collective Investment in Transferable Securities (UCITS), managed accounts, management companies and distribution operations. We handle this work in jurisdictions around the world, and provide service out of most of our offices globally.

Dechert’s litigators represent clients on numerous commodities and derivative dispute resolution matters, including civil, criminal, administrative, arbitration, mediation, enforcement, and investigative claims, actions, and proceedings, as well as in client internal investigations and reviews.

Dechert’s lawyers have advised on many ground-breaking, first-to-market transactions and matters:

• Representing the majority of the commodity-based mutual fund industry in connection with the CFTC’s proposed regulation of such funds and their CTAs and CPOs.
• Developing Enhanced Alternative Return Notes (EARNS), the first structured product to provide near delta-one hedge fund exposure without triggering constructive ownership for note holders.
• Developing the first hedge fund-linked notes marketed to retail investors.
• Representing the Federal Home Loan Bank System and numerous asset managers in the transition of their OTC derivatives businesses to clearing platforms.
• Handling the first U.S.-listed ETF to provide access to China A-Shares, by means of a structured derivatives facility.
• Creating the first U.S.-listed long/short commodity index exchange-traded product.
• Developing a Cayman subsidiary of a U.S. mutual fund to address adverse effects of commodity-linked swap income, a structure that has now been adopted by the entire commodity-based mutual fund industry.