Structured Products

Our lawyers have extensive experience with all aspects of structured products, including establishing, modifying, and maintaining programs.

Our lawyers have been involved in establishing programs for many financial institutions, providing for the issuance of more than $125 billion in debt securities. We have also assisted our clients with modifying their outstanding programs to accommodate new product developments and changing regulatory and tax considerations and modifications in prevailing market practice. Our platforms range from registered notes sold to retail investors, complex exchange traded notes, Rule 144A offerings sold to qualified institutional buyers, European medium-term note programs, and unregistered bank note programs to structured certificate of deposit programs.

Securities Law Compliance. Our lawyers have worked closely with our clients when preparing offering documentation that complies with federal, state, and relevant international securities laws.

Banking Law Compliance. Our experienced bank regulatory lawyers have assisted our clients subject to U.S. and international banking laws in addressing the diverse regulatory issues faced by these institutions when they use programs to raise capital or offer structured products. Our clients include not only U.S. bank holding companies and federal and state chartered banks but also numerous global banking organizations with U.S. operations.

Executing Transactions. A principal advantage of maintaining a structured product program is the ability to permit prompt execution of transactions with a modicum of new disclosures. Our lawyers specializing in this area have considerable experience in executing transactions under highly compressed time frames. Their deep experience includes familiarity with the various types of linked or indexed note structures prevalent in the market, knowledge of the derivatives market definitions and concepts that are frequently used in preparing a specific offering, and a thorough grasp of the detailed procedures to be followed under various types of programs, including programs registered under the federal securities laws, programs executed under U.S. banking law, and programs executed offshore.

Tax Analysis and Disclosure. Our tax lawyers have extensive experience in analyzing proposed note structures and in assisting our clients in preparing appropriate tax disclosures for the various types of structured products that may be issued under a note program.

Assistance in Structuring Products. We are often asked by our clients to assist them in developing new product structures, variations on existing products, and new proprietary indices. In doing so, we are able to apply a broad range of skill sets. Product development may involve analysis of applicable securities and banking laws, consideration of customary market practices and procedures, knowledge of the related equity derivatives market, and analysis of relevant tax and ERISA issues.

Client Resources

We regularly offer our clients training programs and provide updates on SEC, FINRA, and other developments. Our structured products-focused newsletter, “Structured Thoughts,” was the first law firm newsletter dedicated to developments in the structured products industry. Please see below for previous issues.

  • 11/26/19 Volume 10, Issue 6
    • European Commission consultation on EU benchmark regulation.
    • FINRA: Suitability and sales practices remain an issue.
    • SEC charges Switzerland-based dealer for selling unregistered security-based swaps for bitcoins.
    • Regulators propose delay in initial margin phase-in for swaps with certain financial end users.
  • 10/18/19 Volume 10, Issue 5
    • FINRA sanctions for a broker for failing to reasonably supervise sales of complex securities.
    • NASAA’s report warning about the risks of leveraged and/or inverse exchange-traded funds.
    • FINRA’s 2019 report on Examination Findings and Observations, describing effective practices that could help broker-dealers improve their compliance and risk management programs.
  • 7/24/19 Volume 10, Issue 4
    • The SEC’s newly released margin rules for security-based swap dealers.
    • U.K.’s Financial Conduct Authority consultation on its proposal to ban the sale, marketing, and distribution of derivatives and exchange traded notes that reference certain types of cryptoassets.
    • FINRA’s Regulatory Notice 19-21, which established higher strategy-based margin requirements for exchanged-traded notes and options.
  • 6/26/19 Volume 10, Issue 3
    • New Regulation Best Interest, and its impact on the structured products market.
    • The SEC’ June 2019 request for comment on simplifying, harmonizing and improving the exemptions from registration under the Securities Act of 1933.
    • The EU Commission’s response to a request for guidance from the European Supervisory Authorities as to the scope of the PRIIPs Regulation.
  • 4/18/19 Volume 10, Issue 2
    • FINRA’s proposed amendments to its Corporate Financing Rule and how they would impact offerings of structured notes
    • The SEC’s new annual report exhibit requirement for debt securities
  • 2/27/19 Volume 10, Issue 1
    • FINRA’s January 2019 guidance to the use of pre-inception index performance (PIP) data relating to a proprietary index
    • FINRA’s annual “Risk Monitoring and Examination Priorities Letter” and issues relating to structured products
    • The European Supervisory Authorities Final Report relating to a joint Consultation Paper on possible amendments to the PRIIPs Delegated Regulation
  • 12/10/18 Volume 9, Issue 7
    • FINRA Examination Findings and Structured Product Sales
    • PRIIPs – ESAs’ Letter to the European Commission Regarding Guidance on Key Information Documents On Investment Funds 
  • 9/13/18 Volume 9, Issue 6
    • SEC Fines Broker-Dealer for Unsuitable Sales of Leveraged ETNs
  • 8/10/18 Volume 9, Issue 5
    • UK Financial Conduct Authority Calls for Input on PRIIPs
    • ESMA Temporary Product Intervention Measures
    • SEC Issues Investor Alert about Non-Traditional Index Funds
    • The Return of Gary Plastics
  • 6/28/18 Volume 9, Issue 4
    • SEC Fines Broker-Dealer for Early Resales of Structured Notes
    • Structured Note Pricing Supplements and Blood Letters – Who Is Responsible for the Disclosures?
    • When Is an Index Sponsor an Investment Adviser?
  • 4/16/18 Volume 9, Issue 3
    • Final Canadian Bail-In Rules: Impact on Structured Notes Offered in the United States
    • FINRA Issues Sweep Letter Regarding Products Linked to VIX
    • Pricing “Above the Range” in Structured Product Offerings
    • IRS Extends Deadline for Withholding and Reporting Partnership Dividend Equivalent Payments
    • SEC Panel Discusses Retail Investor Disclosure and Education
    • ESMA Temporary Product Intervention Measures for CFDs and Binary Options
    • FCA Statement on Cryptocurrency Derivatives
  • 3/7/18 Volume 9, Issue 2
    • FINRA 2018 Exam Priorities: Suitability and Complex Products
    • Sales of Structured Notes to Advised Accounts
    • Historical Performance Graphs: Saying Farewell to The Financial Crisis?
    • Massachusetts Charges Broker-Dealer in Connection With Violations of DOL Fiduciary Rule
    • SEC Commissioner Stein Highlights Concerns Regarding Retail Investors and Complex Structured Products
  • 2/2/18 Volume 9, Issue 1
    • Linking to ETFs vs. Linking to Indices
    • A Rule 424(b) Primer for the Structured Note Market
    • FINRA’s 2017 Examination Findings and Structured Products
    • The Credit Roundtable Proposes New LIBOR Fallbacks
    • 2018: Business As (Un)usual: European Financial & Regulatory Developments into 2018
    • Infographic: Structured Products 2017 At A Glance
  • 12/27/17 Volume 8, Issue 9
    • Structured Product Red Herrings: Rule 433 and Rule 424(b)
    • PRIIPs Implementation Date Fast Approaching
    • Benchmark Regulation: Latest on Grandfathering
    • Financial Conduct Authority Releases Data Relating to Complaints about Financial Products
    • Notice Extends Phase-In of Section 871(m) Regulations
    • EU Regulatory Agenda: What to Expect in 2018
    • U.S. Regulatory Agenda: What to Expect in 2018
  • 11/15/17 Volume 8, Issue 8
    • Sales of VIX-Linked ETPs – Back to Basics for FINRA
    • Recent SEC and FINRA Actions Relating to Survivor’s Options
    • FINRA Mark-Up Rules and Offerings to Advisory Accounts
    • SEC Announces Efforts to Protect Retail Investors and to Take on Cyber Threats
    • Structured Products Magazine Conference
  • 9/26/17 Volume 8, Issue 7
    • LIBOR: The End Game
    • Structured Notes and Regulation M: A Primer
    • New EU Prospectus Regulations: Impact on Structured Notes Offered in the EEA
    • KIDs and the U.S. Securities Laws
    • FINRA Fines Broker-Dealers for Sales of Non-Traditional ETFs
    • NASAA Survey Finds Seniors Are Most Vulnerable to Financial Fraud
    • Changes to S&P and Russell Index Methodologies
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