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A guide to key resources: derivatives
Practical Law UK Practice Note Overview 8-387-5023 (Approx. 10 pages)
A guide to key resources: derivatives
| Maintained • United Kingdom |
A guide to Practical Law Finance's derivatives resources.
Derivatives overview
For an overview of derivatives, including an explanation of common types of derivatives, the key documentation and parties, see Practice note, Derivatives: overview (UK).
Types of derivatives
Swaps
For an overview of a swap transaction, see Practice notes, Derivatives: overview (UK): Swap and Equity derivatives: overview (UK): Equity swaps.
Options
For an overview of an option transaction, see Practice notes, Derivatives: overview (UK): Option and Equity derivatives: overview (UK): Equity options.
Futures
For an overview of a futures transaction, see Practice notes, Derivatives: overview (UK): Forwards and futures and Equity derivatives: overview (UK): Equity futures.
Forwards
For an overview of a forward transaction, see Practice notes, Derivatives: overview (UK): Forwards and futures and Equity derivatives: overview (UK): Equity forwards.
Total return swaps
For an overview of a total return swap transaction, see Practice note, Equity derivatives: overview (UK): Total return swaps
Equity derivatives
For an overview of equity derivatives, see Practice note, Equity derivatives: overview (UK).
Credit derivatives
For an overview of credit derivatives such as a credit default swap (CDS), see Practice note, Credit derivatives: overview (UK).
Auction settlement is the method of choice for the settlement of CDS. For information on how the auction settlement process has been hard-wired into ISDA's documentation framework governing CDS and a description of the mechanics of the auction process, see Practice note, Understanding the Auction Settlement and Restructuring Supplement to the 2003 ISDA® Credit Derivatives Definitions.
Commodity derivatives
For an overview of commodity derivatives, see Practice note, Commodity derivatives: overview.
Property derivatives
For an overview of property derivatives, see Practice note, Property derivatives.
Longevity swaps
For an overview of longevity swaps, see Practice note, Derivatives: a commercial perspective: Mortality derivatives.
Derivatives in practice
General
For an examination of how and why trading companies, institutional investors and lenders use derivatives, see Practice note, Derivatives: a commercial perspective.
Use of derivatives in loan transactions
For an overview of the use of derivatives in loan transactions, see Practice note, Derivatives: their role in loan transactions.
Early termination and close-out
We have the following resources on default, termination and close-out under the ISDA Master Agreement:
ISDA documentation
For an overview of the various documents which have been published by the International Swaps and Derivatives Association, Inc. (ISDA) to document OTC derivative transactions, see Practice note, ISDA® documents: overview (UK).
Master agreements
For an introduction to the ISDA master agreements, see Practice note, ISDA® documents: overview (UK): The master agreement.
For guidance on the structure of (and bespoke changes that can be made to) the:
- 1992 ISDA Master Agreement, see Practice note, Understanding the 1992 ISDA® master agreement and schedule.
- 2002 ISDA Master Agreement, see Practice note, Understanding the 2002 ISDA® master agreement and schedule.
Confirmations
For an introduction to the ISDA confirmations, see Practice note, ISDA® documents: overview (UK): Confirmation.
Definitions
For an introduction to the ISDA standard definitions, see Practice note, ISDA® documents: overview (UK): ISDA definitions.
Credit support and margin
For an overview of credit support documents, such as security documents, which have been published by ISDA to secure the liability of a party under a derivative transaction, see and Practice notes, ISDA® documents: overview (UK): Credit support and Understanding ISDA®'s English law credit support documents for non-regulatory margining; the 1995 CSA and 1995 CSD.
For more information on regulatory margining, see and Practice notes, Understanding ISDA®'s English law credit support documents for regulatory margining; the 2016 VM CSA and 2018 IM CSD, EMIR variation margin requirements: overview and Margin calls during global crises.
Novations
For an overview of how to novate derivates transactions, the documentation involved and the practical issues to consider prior to executing a novation, see Practice note, Novating derivatives: Documenting and understanding novations of transactions under ISDA® Master Agreements.
Islamic finance: derivatives
For an introduction to some of the issues surrounding the development of Islamic derivatives and an outline of some of the key structures, including Sharia-compliant cross-currency swaps, profit rate swaps, foreign exchange options and total return swaps, see Article, Islamic derivatives and Practice note, Islamic finance: standard documents: Documents for derivatives.
Set off and netting
Set-off and netting play an essential role in the closing-out of derivative transactions. For information on set-off and netting, see Practice notes, Set-off in finance transactions and Netting.
Tax
For an overview of the tax treatment of derivative transactions for UK companies, see Practice note, Derivatives: tax.
Regulation of derivatives
For an outline of the regulatory framework governing derivatives contracts in the UK and a summary of the latest domestic reforms affecting UK derivatives transactions, see Practice note, Derivatives: UK regulatory framework and reforms.
For an outline of the regulatory framework governing derivatives contracts in the European Union and a summary of the latest EU reforms affecting derivatives transactions, see Practice note, Derivatives: EU regulatory framework and reforms.
Brexit
For information on the key issues arising from Brexit that affect derivative transactions, see Brexit and derivatives toolkit.
IBOR reform
For background on IBOR reform and its impact on the derivatives market, see Practice note, Interest rate benchmark reform: bond and derivatives markets.
For an overview of ISDA documents designed to assist parties with IBOR transition, see Practice note, ISDA® documents: IBOR transition.
For a basic primer on the ISDA IBOR Fallbacks Supplement to the 2006 ISDA Definitions and IBOR Fallbacks Protocol (UK), see Practice note, Understanding the ISDA® IBOR Fallbacks Supplement to the 2006 ISDA Definitions and IBOR Fallbacks Protocol (UK).
Links to Practical Law's resources on derivatives
Practical Law Finance resources on derivatives
Links to our resources on derivatives (click on the tab corresponding to each resource):
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