INSTITUTIONALLY MANAGING YOUR TRADING RELATIONSHIPS Previously published in Wells Fargo Prime Service’s Industry and Regulatory Updates, October 2018 edition Is it really that important to spend time and money negotiating the terms of my trading and financing agreements? Why? It’s really all about relationships, isn’t it? Are some terms more important than others? On a…
CUSTOMER’S RIGHT TO THE RETURN OF ASSETS HELD IN PRIME BROKERAGE ACCOUNTS Due to recent market events, I have been fielding very similar calls from clients and others regarding a prime brokerage customer’s right to the return of their securities and cash held in their prime brokerage accounts. They want to know if the PB must…
ISDA PUBLISHES DF PROTOCOL EXTENSION AGREEMENT LINKING DODD-FRANK PROTOCOL TO EMIR PROTOCOL The European Market Infrastructure Regulation (“EMIR”) is a comprehensive European Union regulatory regime created to increase the stability and oversight of European OTC derivatives trading. EMIR applies generally to European entities trading in OTC derivatives, including trading activities with non-European counterparties. As part of…
DEVI’S CORNER: ‘INSTITUTIONAL’ WHEN AUM IS LESS THAN $500M The buzzword when investors are conducting due diligence on a hedge fund today is “Institutional.” Funds strive to appear institutional when they present their back office operations to investors. Investors meet with hedge funds to determine if the manager is institutional enough to entrust with their…
DEVI’S CORNER: WHEN THE BANKS WON’T CALL YOU BACK – NAV TRIGGERS’ EFFECTS ON HEDGE FUNDS Between 2007 and 2009, many hedge funds declined in size due to investor redemptions and/or performance declines. These same hedge funds trade derivative agreements under an ISDA Master Agreement that typically contain provisions defined as Additional Terminations Events (”ATE”) which…
THE FUND ADVISOR – COLUMN 1: KNOW YOUR ISDA AGREEMENT The ISDA Master Agreement is not just a form. This is the first installment of the Fund Adviser, a column that will address legal issues commonly faced by hedge funds. Prominent among those issues are agreements with other parties. When effecting various trading strategies, a…
THE CREDIT AND LEGAL RISKS OF ENTERING INTO AN ISDA MASTER AGREEMENT When a hedge fund decides to enter into derivatives, the first hurdle is a large stack of documents that must be signed with each trading counterparty. This stack will usually include an ISDA Master Agreement published by the International Swaps and Derivatives Association. The…
Available upon request
Available upon request