Derivatives (e.g., over-the-counter and exchange-traded futures, forwards, options, and swaps) are essential to the means and mechanisms of modern global finance. They are employed by financial institutions, major corporations, institutional investors, and high net-worth individuals both to manage risk relating to their business and investments and to generate speculative profits. This seminar will introduce students to the different types of derivatives markets and U.S. regulation of these markets. Specifically it will explore the different market structures for derivatives that are permissible under U.S. law: formal, organized exchanges (e.g., the CME), electronic trading facilities and over-the-counter markets; the types of instruments that may be traded on each; the types of traders who can use each; and the different levels of regulatory supervision applicable to each. The course will also consider the legal elements and negotiable variables of OTC derivatives, including the common ISDA master agreement, schedule, and credit support annex. We will also consider the role played by derivatives such as credit default swaps in structured finance, and we will review the role played by intermediaries and liquidity providers (such as investment banks and hedge funds). Lastly, we will consider the policy and systemic implications raised by derivatives and their users, including questions suggested by the collapse of Bear Stearns and other fiascos.
Section Offerings for 2012-13
|L9064-001||13S||Derivatives Law and Regulation|
|R. Miller||M 6:20 PM-8:10 PM||GRHL 602|
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