Commodity derivatives meaning

In this issue: Sustainable finance and ESG round-up Trade and commodity finance Sustainable finance Debt capital markets Regulation for derivatives lawyers Regulation for banking lawyers Cryptoassets Daily and weekly news alerts New and updated content Useful information Sustainable finance and ESG round-up For a summary of this week’s Sustainable finance and ESG developments, see: Sustainable finance and ESG weekly round–up—5 September 2024. Trade and commodity finance ICC issues report on the advantages of trade digitalisation The International Chamber of Commerce (ICC) Digital Standards Initiative has released a report that, through 22 case studies, demonstrates how supply chain participants use digital tools and interoperable global standards to resolve supply chain challenges and pain points. The case studies concentrate on shipping and logistics, commercial documentation and product information, cross‑border regulatory compliance, and financial services and fraud prevention as priority areas for digitalisation. The report indicates that by digitising trade workflows, businesses can cut...

In this issue: Banking and Finance case round-up Lending Security Debt capital markets Derivatives Regulation for derivatives lawyers Securitisation and structured products Restructuring Technology in banking & finance transactions Regulation for banking lawyers Scotland Daily and weekly news alerts New and updated content Useful information Banking and Finance case round-up Banking & Finance—November 2024 case round-up For a summary of the cases we flagged in Banking & Finance during October 2024, refer to News Analysis: Banking & Finance—November 2024 case round-up. Lending Re KRF Services (UK) Ltd [2024] EWHC 2978 (Ch) The judgment addressed a High Court application for an administration order, heard in that court, and centred on two key points of interest: (i) whether the sole director’s resolution to seek an administration order was effective; and (ii) the effect of the sanctions regime. On the first question, the court examined the company’s unamended Model...

In this issue: Sustainable finance and ESG weekly round-up Moveable Transactions (Scotland) Act 2023 Football Governance Bill LIBOR and benchmarks Sustainable finance Debt capital markets Derivatives Regulation for derivatives lawyers Technology in banking & finance transactions Structured products and securitisation Regulation for banking lawyers Banking & Finance Highlights 2024/2025 Daily and weekly news alerts New and updated content Useful information Sustainable finance and ESG weekly round-up For this week’s coverage of Sustainable finance and ESG developments, please see: Sustainable finance and ESG weekly round–up—19 December 2024. Moveable Transactions (Scotland) Act 2023 Moveable Transactions (Scotland) Act 2023 (Commencement) Regulations 2024 SSI 2024/378: From 1 April 2025, the outstanding provisions of the Moveable Transactions (Scotland) Act 2023 (the Act) will come into effect. See: LNB News 17/12/2024 9. Moveable Transactions (Forms) (Scotland) Regulations 2024 SSI 2024/379: These prescribe the forms to be used for the purposes set out...

The most common reasons for entering into derivatives are for the purposes of: Speculation — when a party seeks exposure to a given variable, for example taking a view on a commodity’s future price on the assumption it will rise or fall over a chosen period Hedging — aiming to offset exposure to the risk of an unfavourable shift in a variable, or to stabilise expected outcomes over time Arbitrage — seeking to take advantage of price discrepancies (between markets, or within the same market over time) to earn profit or cut costs, or where one participant can reach a price or market unavailable to another, including where prices differ over time Exposure to asset classes — obtaining access to a target market (eg commodities, shares, property) without incurring the expense, complexity and formalities associated with those markets, avoiding the same costs and complications Derivatives are commonly used alongside lending arrangements for hedging purposes in practice. In this context, the primary...

Introduction to the MiFID II level 2 and level 3 roadmap The recast Markets in Financial Instruments Directive (Directive 2014/65/EU (MiFID II)) and the Markets in Financial Instruments Regulation (Regulation 600/2014 (MiFIR)) were published in the Official Journal of the EU on 12 June 2014 and entered into force on 2 July 2014. MiFID II and MiFIR significantly reshaped and broadened the regulatory framework that had been established by the Markets in Financial Instruments Directive 2004/39/EC (MiFID I). As amended, the majority of the Directive and the Regulation began to apply on 3 January 2018, and EU Member States had until 3 July 2017 to transpose MiFID II into domestic law. Following the MiFID II/MiFIR review, the Official Journal of the EU on 8 March 2024 set out Regulation (EU) 2024/791 amending MiFIR and Directive (EU) 2024/790 amending MiFID II. Regulation (EU) 2024/791 entered into force on 28 March 2024. Member States are required to transpose the provisions of Directive (EU) 2024/790 into national law by 29 September 2025...

What does this Practice Note cover? This Practice Note sets out an explanation of warrants (often termed securitised derivatives) and considers: what warrants are types of warrants key warrant terminology how warrants are listed and offered how warrants are documented, and the differences between warrants and comparable instruments What are warrants? A warrant is a tradeable security that grants the holder the right, but not the obligation, to: buy or sell a specified asset (the underlying asset, or simply the underlying) at a specified price (the exercise price or strike price) on a specified date or dates (the exercise date(s)) A warrant is a type of derivative—its value is derived from the underlying asset and offers exposure to that value without owning the asset. They are sometimes described as securitised derivatives, ie derivatives embodied in securities. A warrant is not a debt security and so has no principal...