{"product_id":"the-post-reform-guide-to-derivatives-and-futures-isbn-9780470553718","title":"The Post-Reform Guide to Derivatives and Futures","description":"\u003cb\u003eAn in-depth look at the best ways to navigate the post-reform world of derivatives and futures\u003c\/b\u003e  \u003cp\u003eThe derivatives market is one of the largest, and most important financial markets in the world. It's also one of the least understood. Today we are witnessing the unprecedented reform and reshaping of this market, and along with these events, the entire life cycle of a derivatives transaction has been affected. Accordingly, nearly all market participants in the modern economy need to view the handling of risk by derivatives in a very different way.\u003c\/p\u003e \u003cp\u003eMany aspects of financial services reform are based on a belief that derivatives caused the Great Recession of 2008. While the difficulties we now face cannot be blamed solely on derivatives, the need to understand this market, and the financial products that trade within it, has never been greater. \u003ci\u003eThe Post-Reform Guide to Derivatives and Futures\u003c\/i\u003e provides straightforward descriptions of these important investment products, the market in which they trade, and the law that now, after July 16, 2011, governs their use in America and creates challenges for investors throughout the world. Author Gordon Peery is an attorney who works exclusively in the derivatives markets and specializes in derivatives and futures reform and market structure. Since representing clients in Congressional hearings involving Enron Corp., he has developed extensive experience in this field. With this guide, he reveals how derivatives law, and market practice throughout the world, began to change in historic ways beginning in 2011, and what you must do to keep up with these changes.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eExplains what derivatives and futures are, who trades them, and what must be done to manage risk in the post reform world\u003c\/li\u003e \u003cli\u003eAccurately reflects the futures and derivatives markets as they exist today and how they will be transformed by the Dodd-Frank Wall Street Reform and Consumer Protection Act\u003c\/li\u003e \u003cli\u003eHighlights the risks and common disputes regarding derivatives and futures, and offers recommendations for best practices in light of the evolving law governing derivatives\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eThe financial crisis has changed the rules of Wall Street, especially when it comes to derivatives and futures. \u003ci\u003eThe Post-Reform Guide to Derivatives and Futures\u003c\/i\u003e will help you navigate this evolving field and put you in a better position to make the most informed decisions within it.\u003c\/p\u003e \u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003eAcknowledgments xix\u003c\/p\u003e \u003cp\u003eIntroduction 1\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart One The Crises That Led to Derivatives Reform 15\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Seven Causes of the 2008 Market Crises 17\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIgnoring the Warning Signs 18\u003c\/p\u003e \u003cp\u003eMore than Seven Causes of the 2008 Market Crises 20\u003c\/p\u003e \u003cp\u003eAn Incomplete Response to Problems Exposed in the Enron Bankruptcy 26\u003c\/p\u003e \u003cp\u003eEnron Finance Used by Banks and the Lack of Regulation 29\u003c\/p\u003e \u003cp\u003eThe Absence of Effective Regulation 30\u003c\/p\u003e \u003cp\u003eThe Shadow Banking System 34\u003c\/p\u003e \u003cp\u003eDevelopment of an Unregulated Global Derivatives Market 39\u003c\/p\u003e \u003cp\u003eThe Rise of Credit Derivatives and the Credit Default Swap 44\u003c\/p\u003e \u003cp\u003ePrivate-Label Residential Mortgage-Backed Securitization 45\u003c\/p\u003e \u003cp\u003eU.S. Policy Fostering Home Ownership and\u003c\/p\u003e \u003cp\u003eGSE Mismanagement 47\u003c\/p\u003e \u003cp\u003eDerivatives and Structured Products Accounting Practices 49\u003c\/p\u003e \u003cp\u003eNotes 52\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 The Crises and Reform Timeline 55\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMarch 17, 2008: Bear Stearns Is Sold 57\u003c\/p\u003e \u003cp\u003eMarch 27, 2008: Barack Obama Introduces Reform Principles 58\u003c\/p\u003e \u003cp\u003eSeptember 15, 2008: A Bankrupt Lehman Brothers 59\u003c\/p\u003e \u003cp\u003eNovember 2008 to January 2009: American Leadership Ascends 60\u003c\/p\u003e \u003cp\u003eMarch 26, 2009: Geithner Provides Testimony to Congress on Reform 60\u003c\/p\u003e \u003cp\u003eMay 13, 2009: Geithner Writes a Letter to Harry Reid 61\u003c\/p\u003e \u003cp\u003eJune 2, 2009: An Early Voice Speaks Out against the Clearing Mandate 61\u003c\/p\u003e \u003cp\u003eJune 22, 2009: American Corporations Lobby against Central Clearing Mandates for OTC Derivatives 62\u003c\/p\u003e \u003cp\u003eJuly 22, 2009: Introduction of Legislation Favoring Exemptions to the Clearing Mandate 62\u003c\/p\u003e \u003cp\u003eJuly 30, 2009: Introduction of Broad Outlines of the New Law 63\u003c\/p\u003e \u003cp\u003eSeptember 8, 2009: The Industry Demonstrates Commitment to Centralized Clearing 63\u003c\/p\u003e \u003cp\u003eOctober 2, 2009: House Releases Draft of OTC Derivative Legislation 63\u003c\/p\u003e \u003cp\u003eNovember 11, 2009: Senate Releases Draft of OTC Derivative Legislation 64\u003c\/p\u003e \u003cp\u003eDecember 11, 2009: House Passes the Wall Street Reform and Consumer Protection Act of 2009 64\u003c\/p\u003e \u003cp\u003eJanuary 1, 2010: The New York Fed Publishes The Policy Perspectives on OTC Derivatives Market Structure 65\u003c\/p\u003e \u003cp\u003eApril 7, 2010: Financial Crisis Inquiry Commission Begins Hearings 65\u003c\/p\u003e \u003cp\u003eApril 16, 2010: Senator Lincoln Introduces the Wall Street Transparency and Accountability Act of 2010 66\u003c\/p\u003e \u003cp\u003eApril 22, 2010: President Obama Returns to Cooper Union to Speak on Reform 66\u003c\/p\u003e \u003cp\u003eApril 26 to 27, 2010: Senate Votes to Delay Debate on Derivatives Reform 67\u003c\/p\u003e \u003cp\u003eApril 27, 2010: The Goldman Hearing 67\u003c\/p\u003e \u003cp\u003eApril 28, 2010: Senate Votes Again to Proceed with Financial Services Reform 70\u003c\/p\u003e \u003cp\u003eMay 20, 2010: Senate Passes Its Version of the Legislation 70\u003c\/p\u003e \u003cp\u003eJune 30, 2010 and July 15, 2010: Congress Approves Legislation and Seeks the President’s Approval 71\u003c\/p\u003e \u003cp\u003eJuly 21, 2010: President Obama Signs Dodd-Frank into Law 71\u003c\/p\u003e \u003cp\u003eU.S. Rule Making in 2010 and 2011 73\u003c\/p\u003e \u003cp\u003eU.S. Reform Blazes the Trail for Global Derivatives Reform 79\u003c\/p\u003e \u003cp\u003eNotes 80\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two Derivatives Reform 83\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIntroduction to Part Two 83\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Introduction to Futures, Margin, and Central Clearing 85\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThree Crises and the Need for the Futures Model 87\u003c\/p\u003e \u003cp\u003eA Brief History of Futures Contracts and Markets 92\u003c\/p\u003e \u003cp\u003eThe Commodity Futures Modernization Act of 2000 98\u003c\/p\u003e \u003cp\u003eIntroduction to the Futures Model and Basic Futures Concepts 100\u003c\/p\u003e \u003cp\u003eRegulation of Futures 112\u003c\/p\u003e \u003cp\u003eA Futures Contract in Action 114\u003c\/p\u003e \u003cp\u003eDefault by a Clearing Member in the Futures Model 117\u003c\/p\u003e \u003cp\u003eGlobal Reform and the Futures Model 120\u003c\/p\u003e \u003cp\u003eNotes 126\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 U.S. Derivatives Law in Title VII of Dodd-Frank 131\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOrganization of Dodd-Frank 131\u003c\/p\u003e \u003cp\u003eIntroduction to Titles VII and VIII 134\u003c\/p\u003e \u003cp\u003eThe Approach to Understanding New Derivatives Law in the United States 136\u003c\/p\u003e \u003cp\u003eProducts 137\u003c\/p\u003e \u003cp\u003ePeople 147\u003c\/p\u003e \u003cp\u003eTaxpayers 153\u003c\/p\u003e \u003cp\u003eWhistleblowers 169\u003c\/p\u003e \u003cp\u003ePlatforms 170\u003c\/p\u003e \u003cp\u003eNotes 175\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Title VIII of Dodd-Frank 177\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOpposition to Title VIII 178\u003c\/p\u003e \u003cp\u003eBefore Title VIII 180\u003c\/p\u003e \u003cp\u003eWhat Exactly Does Title VIII Set into Motion and When? 182\u003c\/p\u003e \u003cp\u003eWhat Is a Systemically Important Activity? 183\u003c\/p\u003e \u003cp\u003ePractical Results of the New Law 184\u003c\/p\u003e \u003cp\u003eNotes 186\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 A Primer on Legal Documentation 187\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBackground 190\u003c\/p\u003e \u003cp\u003e“Let’s Use an ISDA” 191\u003c\/p\u003e \u003cp\u003eHistory of the ISDA 194\u003c\/p\u003e \u003cp\u003eBasic OTC Architecture 195\u003c\/p\u003e \u003cp\u003eThe ISDA Documentation in Practice, and Problems in 2008 202\u003c\/p\u003e \u003cp\u003eGlossary 208\u003c\/p\u003e \u003cp\u003eNotes 210\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 The Life Cycle of a Cleared Derivatives Trade 211\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStep One: Legal Documentation 211\u003c\/p\u003e \u003cp\u003eStep Two: Trade Execution via an SEF, SB-SEF, or DCM 215\u003c\/p\u003e \u003cp\u003eStep Three: Alleging and Affirming a Trade; Reporting in Real Time 221\u003c\/p\u003e \u003cp\u003eStep Four: The FCM Take-Up 222\u003c\/p\u003e \u003cp\u003eStep Five: Trade Is Centrally Cleared 223\u003c\/p\u003e \u003cp\u003eStep Six: The Trade Is Reported for the Second Time 225\u003c\/p\u003e \u003cp\u003eNotes 226\u003c\/p\u003e \u003cp\u003ePART THREE Trading Before and After Reform 227\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 The History of Derivatives and Futures 229\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Earliest Derivative 230\u003c\/p\u003e \u003cp\u003eTrees, Forests, and Wildfires 231\u003c\/p\u003e \u003cp\u003eDid They Exist in Antiquity? 233\u003c\/p\u003e \u003cp\u003eOTC and Exchange Derivatives 233\u003c\/p\u003e \u003cp\u003eBack to Biblical Times 234\u003c\/p\u003e \u003cp\u003eThe Dark Ages and Medieval Europe 239\u003c\/p\u003e \u003cp\u003eThe Muslim Empire 240\u003c\/p\u003e \u003cp\u003eDevelopment and Early Use of the Bill of Trade or Exchange 241\u003c\/p\u003e \u003cp\u003eAfter the Protestant Reformation 244\u003c\/p\u003e \u003cp\u003eAn Early Sighting of the Term Commodity Pools 249\u003c\/p\u003e \u003cp\u003eTen Wise Men 250\u003c\/p\u003e \u003cp\u003eThe Modern Era Begins in the States in 1848 258\u003c\/p\u003e \u003cp\u003eEarly-Twentieth-Century America 259\u003c\/p\u003e \u003cp\u003e1907 Bankers Panic 260\u003c\/p\u003e \u003cp\u003eS\u0026amp;Ls and Mortgage Finance Functions Well Before Abuses 268\u003c\/p\u003e \u003cp\u003eThe Creation of Fannie and Freddie 268\u003c\/p\u003e \u003cp\u003eDisco, Dealers, Swaps, and Redlining in the 1970s 269\u003c\/p\u003e \u003cp\u003eU.S. Regulators Formally Recognize Swaps 273\u003c\/p\u003e \u003cp\u003eThe Birth of the OTC Market 274\u003c\/p\u003e \u003cp\u003eThe Evolution of Options Markets 275\u003c\/p\u003e \u003cp\u003eThe Futures Trading and Practices Act and the 1993 Swaps\u003c\/p\u003e \u003cp\u003eExemption 276\u003c\/p\u003e \u003cp\u003eISDA 277\u003c\/p\u003e \u003cp\u003eThe 1987 Crash and 1990s Crises 279\u003c\/p\u003e \u003cp\u003eThe Commodity Futures Modernization Act of 2000 286\u003c\/p\u003e \u003cp\u003eEnron Loophole 287\u003c\/p\u003e \u003cp\u003eThe First Decade of the Twenty-First Century 288\u003c\/p\u003e \u003cp\u003eNotes 289\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Market Structure Before and After 2010 299\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAncient Commodity Markets 299\u003c\/p\u003e \u003cp\u003eEarliest Modern Exchanges 300\u003c\/p\u003e \u003cp\u003eThe Great Depression and Bucket Shops 301\u003c\/p\u003e \u003cp\u003eOpen Outcry and Pits Give Way to the Machines 302\u003c\/p\u003e \u003cp\u003eReform of U.S. Market Structure 305\u003c\/p\u003e \u003cp\u003eDerivative Clearing Organizations (DCOs) 307\u003c\/p\u003e \u003cp\u003eSwap Data Repository 308\u003c\/p\u003e \u003cp\u003eMarket Participants in the OTC Derivatives Trade 309\u003c\/p\u003e \u003cp\u003eNotes 311\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Four Continuing Education 315\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Survey of Derivatives 317\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOverview of the Strategies and Trade Structure 319\u003c\/p\u003e \u003cp\u003eEarly Derivatives and the Beginnings of the OTC Market 320\u003c\/p\u003e \u003cp\u003eForwards versus Options 320\u003c\/p\u003e \u003cp\u003eOption Basics 322\u003c\/p\u003e \u003cp\u003eOptions Pricing 324\u003c\/p\u003e \u003cp\u003eBasic Option Strategies 326\u003c\/p\u003e \u003cp\u003eExchange-Traded Options 328\u003c\/p\u003e \u003cp\u003eSwaps Follow Options in the Evolution of Derivatives 329\u003c\/p\u003e \u003cp\u003eCredit Derivatives 330\u003c\/p\u003e \u003cp\u003eCredit-Linked Notes and Other Securities 336\u003c\/p\u003e \u003cp\u003eTotal Return Swaps 336\u003c\/p\u003e \u003cp\u003eInterest Rate Swaps 338\u003c\/p\u003e \u003cp\u003eEquity Swaps 340\u003c\/p\u003e \u003cp\u003eCurrency Derivatives 341\u003c\/p\u003e \u003cp\u003eProperty Derivatives 342\u003c\/p\u003e \u003cp\u003eCommodity Derivatives 344\u003c\/p\u003e \u003cp\u003eEnergy Swaps 345\u003c\/p\u003e \u003cp\u003eStructured Products, Securitization, CDOs, and CDOs Squared 346\u003c\/p\u003e \u003cp\u003eExchange-Traded Derivatives: Futures and Other Listed Products 348\u003c\/p\u003e \u003cp\u003eAdditional Resources 349\u003c\/p\u003e \u003cp\u003eOnline Resources 349\u003c\/p\u003e \u003cp\u003eGlossaries 350\u003c\/p\u003e \u003cp\u003eNotes 350\u003c\/p\u003e \u003cp\u003eAbout the Author 351\u003c\/p\u003e \u003cp\u003eIndex 353\u003c\/p\u003e \u003cp\u003e\u003cb\u003eGORDON F. PEERY \u003c\/b\u003ehas lectured in London, Hong Kong, Toronto, Brunei, Kuala Lumpur, and the United States on the 2008 market crises and derivatives reform. Since representing a leading investment bank in televised Enron hearings in Congress, Mr. Peery developed a global legal practice exclusively devoted to derivatives and futures clients. In his seventeenth year in large firm legal practice, Mr. Peery is a partner who counsels governments, sovereign wealth funds, international investment advisors, states, counties, global investment management clients, funds, managed accounts, real estate firms, energy companies, and individuals as a leader within the Derivatives and Structured Products Practice of K\u0026amp;L Gates LLP, one of the ten largest law firms in the world. Mr. Peery has actively contributed to International Swaps and Derivatives Association, Inc. (ISDA) and the Futures Industry Association (FIA) working groups and has taught for ISDA. He has helped shape the next generation of derivatives and futures documentation and has authored or coauthored over thirty articles on derivatives and futures. He holds degrees from Vanderbilt Law School (JD, recipient of the endowed Bennett Douglas Bell Memorial Award) and the University of Southern California, where he graduated with a double-major, \u003ci\u003emagna cum laude, \u003c\/i\u003eas a member of Phi Beta Kappa.\u003c\/p\u003e  \u003cp\u003eDerivatives law and market practice continue to change in historic ways since the Global Recession of 2008. Today there is no aspect of our financial system that evolves more dynamically than the derivatives market. Even though this market is arguably the largest and most powerful in the world, it is also the least understood. This is due to the arcane language that derivative practitioners frequently use, the complexity of these financial instruments, and the continuous evolution of the markets in which they trade. The need to understand derivatives has therefore never been greater. This text is designed to meet that need in an understandable way.\u003c\/p\u003e \u003cp\u003eSince his work in Congressional hearings years ago involving derivatives traded by Enron Corp., author Gordon F. Peery developed a specialty in the legal aspects of futures and derivatives. As a leading thinker and counselor in derivatives reform, Peery reveals how derivatives law and market practice began to change in historic ways in 2011. Engaging and informative, \u003ci\u003eThe Post-Reform Guide to Derivatives and Futures:\u003c\/i\u003e \u003c\/p\u003e\u003cul\u003e\n\u003cli\u003e Explains what derivatives and futures are, who trades them, and how this trading will be transformed at the direction of the leaders of G20 countries\u003c\/li\u003e \u003cli\u003e Illustrates how high-profile failures over the years involving Long-Term Capital Management L.P., The Bear Stearns Companies, Inc., and Lehman Brothers Holdings Inc., compelled lawmakers to transform the OTC derivatives market into a market that resembles the futures market\u003c\/li\u003e \u003cli\u003e Provides an anatomy of a cleared derivative, illustrating each stage in its life cycle\u003c\/li\u003e \u003cli\u003e Dispels the myth that derivatives caused the 2008 market crises and explains how that myth played a role in reform\u003c\/li\u003e \u003cli\u003e Presents a panoramic historical survey of derivatives, from those used thousands of years ago to the present, and concludes with resources for monitoring today’s rapidly evolving law and practice\u003c\/li\u003e\n\u003c\/ul\u003e \u003cp\u003e\u003ci\u003eThe Post-Reform Guide to Derivatives and Futures\u003c\/i\u003e is the first comprehensive treatment of OTC derivatives reform that includes historical and practical reference points. It will enable readers of all experience levels to understand the evolution of post-reform derivative markets.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990315843813,"sku":"NP9780470553718","price":95.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470553718.jpg?v=1761787324","url":"https:\/\/k12savings.com\/products\/the-post-reform-guide-to-derivatives-and-futures-isbn-9780470553718","provider":"K12savings","version":"1.0","type":"link"}