Financial Trading and Markets Regulation (21510). 2 units. Modern financial institutions engage in a wide array of trading activities using a multitude of financial instruments. These financial instruments – securities, futures, swaps, and other derivatives – are transacted by market participants in a variety of ways – sometimes traded directly with counterparties, sometimes on exchanges, and sometimes through other electronic trading facilities. Under the new, and increasingly complex, web of regulations that applies to these transactions, financial institutions must make business decisions based on regulatory realities. Lawyers advising financial institutions and other market participants, in turn, must understand both the transactions and the regulatory regimes to which they are subject.
This course will explore the ways in which financial institutions trade financial instruments and the patchwork of regulations to which this trading activity is subject. The primary focus of the class will be derivatives trading – specifically futures and swaps trading – and the change in trading regulation since the passage of the Dodd-Frank Act in 2010. We will explore the legal structure around this trading and its application to real-world trading desks, including understanding how regulation affects business strategy and vice versa. Each student will write a paper and will present the paper idea to the class, with the ultimate goal of submitting the paper for publication in this area of increasing academic focus. No prerequisites. Enrollment limited to fifteen. G.D. Rosenberg.