The Derivatives Market Regulation Seminar will provide students with an introduction to the law governing the derivatives markets. Focus is on regulated futures and options on futures markets, over-the-counter market for derivatives, including the swap and forward markets, as well as the evolution of cryptocurrency and products associated with this exciting new asset class. Topics include the mechanics of trading in the futures and other derivatives markets; the use of the derivatives markets for hedging, speculation, and price discovery; and the organization and regulation of contract markets and their members. Industry guest presenters will provide perspective from a practitioner’s viewpoint.

The futures market is one of the most varied in the world. Commodities as diverse as live hogs, gold, coffee, and securities indexes are all available. The swaps market is one of the largest financial markets in the world, yet in comparison to agricultural commodities, it is only recently regulated. As noted above, consideration will be given to cryptocurrency and the regulatory challenges in overseeing this new asset class. This course focuses on these markets, transactions, and participants. The course curriculum will be fluid so we can discuss current events (e.g., proposed new regulation, litigation, or civil or criminal actions) as issues arise.

Specifically covered are: (1) the Commodity Exchange Act’s regulatory regime for commodity futures, exchange-traded commodity options and foreign exchange; (2) the role of the Commodity Futures Trading Commission, the National Futures Association, and the Securities and Exchange Commission; (3) the swaps regulatory regime imposed by the Dodd-Frank Act; (4) the registration categories of markets, such as designated contract markets, derivatives clearing organizations, and swaps execution facilities, and market participants, such as futures commission merchants, introducing brokers, swap dealers and major swap participants; (5) hedge funds and commodity investment vehicles; (6) industry standard agreements such as ISDA Master Agreements; (7) inter-jurisdictional differences in regulation and the extraterritorial application of U.S. regulation; (8) enforceability issues in bankruptcy; and (9) evolution of crypto-currency, new products and regulatory challenges.

Students are expected to participate in substantive class discussions. There is a final exam. 

Recommended for the Following Professional Pathways: Corporate Transactions and Governance; Financial Services and Compliance

Prerequisite or Co-requisite: Corporations

2 Credits