Derivatives & Legal Structuring
Derivatives and structured products are complex. They involve several transactions such as: funding, hedging, collateral management, monitoring, etc.... They also involve several departments working together to deliver the expected result: sales, trading, credit/market risk, legal, compliance... to name a few.
Knowing the law and standard documentation such as ISDA, GMRA, OSLA, AFB/FBF for OTC transactions, and EMTN/LaunchPad/Secured Limited Recourse programmes for securitised products, are obvious pre-requisites to practice in that area.
Legal structuring requires, in addition to the above, a good understanding of these transactions and how the relevant departments operate and interact. It also requires the ability to combine "simple" transactions such as options, forwards, equity swaps, notes issues and the like... within the appropriate legal framework.
This is the process which will allow turning a financial concept or a mathematical model into an actual "euroclearable/marketable" financial product, such as a securitised CPPI in which a client can invest, or into an equity finance deal which will allow a client to raise funds against a block of listed shares, for example.
