International Structured Finance and Derivatives

The Covid-19 crisis came at the end of more than two decades of significant transformation of financial markets with main catalysts such as structured finance innovation and financial regulations. The 2020 stock market’s roller coaster exposed the financial system’s fragility and the pressing need for legal professionals with solid understanding of Structured Finance and Derivatives which form an important building block in risk management for corporate, investors, arbitrageurs and project financiers.

On 20 April 2020, the West Texas Intermediate (WTI) crude oil price dropped to negative levels for the first time in history (-$37 per barrel). This challenged the underlying assumptions of many legal and risk management frameworks that were designed with a poor understanding of the futures markets and financial derivatives in general.

Few months later, the GameStop short squeeze in January 2021 sparked the interest of the general public with the media’s narrative only focusing on the tip of the iceberg. Regulators, on the other hand, were more concerned about market abuses including price manipulation, collusion and other market manipulation strategies such as pump and dump, market ramping or cornering.

As structured finance and derivatives have become a crucial aspect of many financial transactions, it has become increasingly difficult to understand or investigate the origin and the impact of these debacles. It is therefore paramount to train new generations of lawyers capable of keeping up with the complexity of this field. Big financial institutions usually have in-house expertise and all the various types of standard documentation required to carry out standard deals and only resort to external private lawyers for high-level and complex transactions. However, it is not possible to gain the knowledge of complex structures without learning the basics. Unfortunately, the easy and basic transactions are not likely to cross the paths of the junior derivatives lawyer because they are all done in-house.

Many financial markets transactions require the use of instruments including Exchange traded and OTC derivatives such as, commodity, currency or interest rates swaps, forwards, futures and options. Credit Default Swaps and other credit derivatives have also been extensively applied for credit and counterparty risk hedging, securitization and the synthetic transfer of risk exposures.
This program will allow the attendees to examine various practices related to structuring, documentation and execution of structured finance and derivatives transactions. It will provide the participants with the tools to analyze and critically assess financial products. Practical case studies and examples will be utilized to illustrate the good practices as well as potential abuses of these financial instruments.