Skip Navigation
Menu
Close

Derivatives

"Kim & Chang is a dominant force in the derivatives market in Korea and
continues to be involved in several notable banking and financing deals."
– Asialaw Profiles 2017

Overview

The Derivatives Practice at Kim & Chang operates at the cutting edge of derivatives practices, providing advice to major market practitioners regarding over-the-counter and exchange-traded derivatives transactions, securities lending, repurchase transactions, derivative linked securities, and structured finance transactions.  

Kim & Chang acts as local counsel for many leading international organizations in the worldwide derivatives industry, such as the International Swaps and Derivatives Association (ISDA), the International Capital Market Association (ICMA), the International Securities Lending Association (ISLA) and the Futures Industry Association (FIA) and annually issues the industry opinions on the legal enforceability under Korean law of the standard agreements widely used in the global financial markets, such as the ISDA Master Agreements, the Global Master Lending Agreements (GMSLA), the Global Master Repurchase Agreements (GMRA) and the FIA agreements. 

Since the enactment of the Financial Investment Services and Capital Market Act (FSCMA), the basic law that governs the financial activities in Korea, and the implementation of numerous post-financial crisis global regulations in Korea causing significant changes in the derivatives industry has taken place.  Members of our practice have been active in the deliberation and implementation process of such regulatory changes through engagement with the regulators, contributing articles in major law journals and making presentations in various relevant forums.

Key Servicesshow

Regulatory Work

Our practice provides highly sophisticated legal advice on Korean financial sector regulations and the impact of globally coordinated post-financial crisis regulatory changes to the derivatives industry through our lawyers’ expertise and diverse experience in the sector.  We issue legal opinions on various domestic and cross-border OTC derivatives as well as exchange-trade derivatives (KRX and other foreign exchanges) involving equity, fixed income instruments, commodities, or credits to ensure they our clients’ transactions will be in full compliance with the relevant laws.  We also advise our clients on changes in international regulations on derivatives (CCP clearing, data-submission to trade repositories, margining, benchmark regulation, etc.) and their impact on domestic and cross-border derivatives transactions.


Transactional Work 

Representation of clients by our Derivatives Practice ranges in complexity from simple derivatives to structured products with complex embedded derivatives.  Our services include advising on the structure, negotiation of the terms, documentation, and all necessary government authorization processes. 

 

Generally, we assist clients in drafting or revising various standard agreements such as ISDA Master Agreements, GMSLA, or GMRA based on negotiations with the counter-party regarding schedules to be annexed to such agreements.  Particularly, if such agreements are governed by foreign law, we would draft the Annex or Schedule to be effective under and in full compliance with Korean law and regulations.  Also, in connection with structured finance products such as asset backed securities and credit linked notes, we draft and provide confirmations tailor-made to each product. 

 

Our practice advises on standard agreements widely used such as ISDA Master Agreement, GMSLA, GMRA, assists in drafting and revising such standard agreement, and actively participates in various reforms of regulations which impact derivatives transactions.


Dispute Resolution and Sanctions regarding Derivative Transactions

We provide full advisory service for clients that are subject to the jurisdiction of Korean regulators and are facing investigations or administrative proceedings relating to violations of regulations involving derivatives.  Our service includes in-depth analyses of the issues, development of defense strategies and advocacy of clients during the investigation and administrative proceedings.

 

Our practice also closely work with and support our lawyers in the litigation department in civil or criminal judiciary proceedings that involve derivative transactions.

Key Experiencesshow

  • As an associate member of the ISDA, as well as its Korean local counsel, issue annually a legal opinion on the enforceability (including close-out netting) of the ISDA Master Agreement and Credit Support Annex (CSA) since 1997 under Korean laws.
  • As Korean local counsel to the ICMA, issue annually a legal opinion on the GMRA.
  • As Korean local counsel to the ISLA, issue annually a legal opinion on the GMSLA and the OSLA.
  • As Korean local counsel to the FIA, issue annually a legal opinion on the Master Netting Agreement.
  • Participated in the Korea Financial Investment Association’s drafting of the Korean Standard Agreement of OTC Derivatives Transactions.
  • Prepared a Korea Appendix for the GMSLA, the OSLA, and the GMRA.
  • Advised the Korea Federation of Banks (KFB) regarding issues on the introduction of central clearing for OTC derivatives.
  • Assisted the KFB regarding setoff right issues for derivatives and the CDS master confirmation.
  • As Korean local counsel to the ISDA, drafted Credit Support Annex (VM CSA, IM CSA) governed by Korean law.
  • Advised major international banks and investment banks regarding derivatives, repo, securities lending transactions, and benchmark regulation.
  • Advised domestic financial institutions on the introduction of collateralization by securities lending and submitted statements of opinion for the introduction of collateralization.
  • Advice on the structured finance transaction based on derivatives (e.g., TRS, CDS) and representation of clients in legal disputes related thereto.
  • Advice on the securities/commodities financing structure based on derivatives, repo and securities/commodities loan and representation of clients in legal disputes related thereto.
  • Advice on the implementation of global benchmark regulations and assisting registration of benchmark with relevant jurisdictions.

Professionals

Key Contacts

Insights

Search Professionals

EXPERTISE RESET SEARCH

EXPERTISE

레이어 닫기

EXPERTISE

Close

Share

Close