Navigating derivatives regulation
The OTC derivatives market has undergone significant change as a result of global financial regulatory reforms under Dodd-Frank and EMIR. This makes derivatives as a tool for hedging risk much more complicated. Funds must now assess their structure and derivatives related strategies along with their related documentation, policies and post-trade procedures.
Those with international operations face further complexity, as they must navigate multiple jurisdictions and regulatory regimes with new, complex reporting requirements dictated under EMIR and AIFMD as well as global documentation, risk mitigation, and margin requirements.
Chatham offers a powerful blend of proven buy-side regulatory expertise, practical derivatives experience, and customized technology solutions. We provide clients both the expertise to navigate the regulatory and economic challenges to hedging, and the operational support and technology systems they need to manage their programs in a compliant and affordable way.
- Regulatory Reporting: Chatham provides an end-to-end solution that relieves the operational burden of reporting and reduces compliance risk in a cost effective way. As the largest third-party submitter of trade reports to DTCC, a global trade repository, we report trades and their valuations across jurisdictions and asset classes for hundreds of clients. We also efficiently manage mandatory portfolio reconciliation and dispute resolution with counterparties worldwide.
- ISDA Advisory & Negotiation: As industry leaders in buy-side ISDA negotiation, Chatham reviews more than 2,000 agreements annually across more than 100 dealer counterparties. We will partner with in-house or outside counsel to ensure consistency with underlying facilities, credit agreements, or loans while delivering best in market terms. Unlike most law firms, Chatham will analyze terms from both a legal and an economic perspective to ensure that all provisions are legally and economically appropriate for the client and its hedging needs. Our flat fee review, negotiation, and execution approach provides transparency and eliminates unexpected trading fees.
- Regulatory Enterprise Advisory: The onset of cross-border derivatives regulation has created a daunting maze of regulatory requirements that can be difficult to navigate. Our tailored, enterprise-wide regulatory strategies and implementation programs are developed to support both the economic and legal business objectives for risk management. Our deep-dive analysis assesses the impact of global derivatives regulation on a firm’s risk management program, evaluates existing transaction processes, risk management policies and procedures, and develops customized remediation and compliance plans that address all facets of derivatives regulation from regulatory reporting, portfolio reconciliation, valuations, documentation, recordkeeping, margin, and clearing.
- OTC Margin Advisory & Management: With the implementation of the margin rules worldwide, it has become clear that the margin rules can have significant, economic consequences on a fund’s performance. Chatham works with funds to assess both the economic and legal impact of the margin rules on a fund’s structure and hedging strategy and partners with them to develop a strategic response plan. Our role is to work with funds to provide tailored strategies and derivative solutions to best navigate the economic and legal impact of margin for funds.
Whether your firm uses derivatives to hedge risk once a day or once a year, we can simplify the process and challenges of regulatory compliance.