A&O Shearman’s derivatives team represents the full spectrum of market participants across all derivatives products and asset classes, providing full-service advice on OTC and exchange-traded products in a transactional, advisory and contentious context.   

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We have top-tier practitioners across the world’s major financial centers and advise our clients on the structural, legal and documentation issues related to credit, equity, fixed-income, currency, digital asset and commodity-linked instruments.    

Our expertise extends to commonly used financial market agreements including repos and stock lending transactions, the hedging aspects of financings, securitizations and CLOs, and the use of derivatives in corporate, tax, insurance and other complex structures.  

An elite advisor to the leading market participants 

We act for global financial institutions, hedge funds, private equity funds, private clients, asset managers, corporations, multinationals and investors. We are also one of the few firms globally with the experience to represent market infrastructure providers and leading clearing organizations.  

We have strong relationships with key regulatory and industry organizations and continue to play a leading role in the development and implementation of regulations that govern the derivatives markets globally, such as the Dodd-Frank Act, EMIR and MiFID, as well as market initiatives relating to those regulations.  

Extensive experience of large scale regulatory change projects 

Our lawyers also have extensive experience advising on large scale regulatory change projects such as uncleared margin implementation and IBOR transition.  

Our teams have worked with the International Swaps and Derivatives Association, Inc. (ISDA) for more than 25 years, helping drive the creation of the ISDA Master Agreement and various related documentation. 

This close involvement enables us to shape the evolution of the derivatives market and translate our deep understanding into effective, efficient and practical advice to our clients.   

Representative matters

  • Several major financial institutions with respect to the management of risk and the close-out of exposure relating to Credit Suisse, Silicon Valley Bank, Russian sanctions, and other market disruptions. 
  • Each of the Credit Derivatives Determinations Committees globally on matters relating to credit derivatives, including settlement of credit derivatives on the Russian Federation.  
  • IntercontinentalExchange in a wide range of matters, including ongoing development of its ICE Clear Credit, ICE Clear Europe and ICE Clear US clearinghouses for credit default swaps and other products, resolution and recovery planning for clearinghouses, development of segregation models, client clearing solutions and bankruptcy remote structures, new product and rulebook development, U.S. and EU regulatory “equivalence” and other cross-border regulatory issues, and SEC and CFTC regulatory matters. 
  • A major financial institution on the development of template documentation for trading voluntary carbon credits under an International Swaps and Derivatives Association Master Agreement.  
  • A working group of financial institutions in the Middle East on the structuring of Islamic derivative and repo products to facilitate the use of compounded risk free rates. We developed three innovative structures in consultation with the banks’ structuring and operational teams and Shari’ah advisers, and drafted template documentation for each structure to standardize the approach taken by financial institutions in the relevant market. We also provided advice on adapting the ISDA Benchmarks Supplement for use with Islamic transactions and the interaction of the derivative structures with murabaha and ijara financing arrangements.  
  • Digital asset market participants with respect to digital assets including cryptocurrencies and the related technological infrastructure (e.g., distributed ledgers), particularly derivatives and custody transactions.  Significant to these projects has been the negotiation of bespoke provisions reflecting the unique characteristics of digital assets, including consideration of the technical aspects of digital asset transfers, methods for pledging digital assets, non-traditional price sources (and related fallback provisions) and events such as hard forks, airdrops and issues with respect to exchange and wallet operation, to ensure that any commercial terms properly reflect those characteristics.  We have also led industry development of standard terms for digital assets derivative transactions. 
  • An Asian headquartered international bank in relation to default and subsequent close-out of an ISDA Master Agreement related to hedging for a leveraged financing. Significantly, we provided advice around the rights of the bank as swap counterparty while navigating (a) restrictions under the complex intercreditor arrangements and (b) U.S. Chapter 11 considerations (the counterparty having entered Chapter 11 shortly prior to close-out).  
  • Financial institutions, investment banks, corporate issuers, hedge funds, family offices and holders of large equity stakes on numerous strategic equity transactions involving convertible bonds, stake building, hedging, financing and structured disposals of listed shares.  
  • Numerous prominent, multi-billion dollar buy-side market participants with respect to all their derivatives matters, including assistance with their trading documentation (including ISDA, repo and securities lending agreements) and financing commitments (including prime brokerage and related term commitments). 

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