In a complex market spanning myriad clients, products and regulatory regimes, few law firms can claim to offer support and expertise in a truly global sense. Clifford Chance is one of them. The firm’s work on everything from fundamental market infrastructure to cutting-edge product development is peerless, and secures its win as Global Capital’s Global Law Firm of the Year.
No law firm is more involved in the regulatory response process across the global derivatives market than Clifford Chance. In the US, the firm has advised leading trade associations — including the International Association of Credit Portfolio Managers and the Reinsurance Association of America — and major banks in their response to Basel III reform. In Europe and the UK, the firm is the go to practice for clients seeking to understand regulation from EMIR to SFTR. In Asia, regulators frequently turn to Clifford Chance experts to provide views on complex legal and regulatory issues, including in relation to derivatives. When China passed its first derivatives law in 2022, Clifford Chance was the only international firm invited to provide comment directly to the Chinese legislature.
“We were asked to represent the legal industry in providing feedback directly to the National People's Congress and had several closed door sessions with the securities regulator,” says Terry Yang, a partner in the Hong Kong office and part of the derivatives and structured products and regulatory team. “That really stands out as an example of Clifford Chance’s position as the market leading practice in many jurisdictions for derivatives and structured finance.”
The firm’s transactional work is equally impressive. The breadth of Clifford Chance’s risk transfer practice, for example, is unparalleled. Europe is by far the largest in the market for credit risk transfers and it is one that Clifford Chance has made its own. “We’ve focused on the market since the aftermath of GFC through its growth to become one of the most important tools for bank risk and capital management,” says Timothy Cleary, a partner in the London office. “We've been there with issuers on the journey and we now act for almost all large global banks.”
A major theme over the last two years is the opening up of the risk transfer market in the US, where Clifford Chance has been at the forefront of market development. “We've been using derivatives and portfolio risk transfer mechanisms, but we've also been involved in building the infrastructure that lies underneath that,” says Gareth Old, partner in the Derivatives and Structured Products Group in New York. “That includes building investment vehicles for private credit funds to come into the market.”
Clifford Chance’s global strength across transactional and regulatory issues has kept it at the forefront of emerging segments. New investment products are evolving in the related worlds of crypto currency and tokenization of investment products. These require law firms to be able to help clients and lawmakers navigate how the next generation of assets and new way of delivery of services should be treated. “Across these spheres we're both at the forefront in terms of the regulatory advice, but also in terms of the transactions in relation to such products.” says Leng Ng, partner in the Singapore office and part of the derivatives, structured products and regulatory team.
Old points to the firm’s work with JP Morgan in the US on the bank’s cross border repo collateral tokenization project. This essentially allowed for real time settlement of repo collateral within the JP Morgan infrastructure, making the market greater and more efficient. In a perfect example of the firm’s worldwide reach, this involved Clifford Chance lawyers from New York and London to Luxembourg and Singapore.
Carbon trading — both in the compliance and voluntary markets — is an expanding area of work that has become a growing area of interest in the European market and is now picking up pace in the US. The Clifford Chance derivatives and structured products team has worked on many bespoke and market developing products and platforms for trading and is in collaboration with traders, investors and issuers on products. “Banks keen on sustainable finance and keen to make a positive impact are looking at voluntary carbon with a similar attitude,” says Paget Dare Bryan, partner in London. “We'll be helping people build their approach and identify regulatory issues.”
Ultimately, Old says that the way the firm maintains a culture of collaboration is key to its success. Almost the entire Clifford Chance derivatives, structured products and regulatory team grew up within the firm. “When we do hire laterals we are extremely careful to make sure that they fit culturally and understand the Clifford Chance approach,” he says. “This gives us the ability to deliver the same consistent and reliable advice to clients across the globe in a way that I think few firms are able to do.”