Financial Institutions Advisory & Financial Regulatory

Shearman & Sterling's Financial Institutions Advisory & Financial Regulatory Group provides a full, global service to financial institutions, exchanges, ECNs/MTFs, clearing and settlement providers, fund firms and corporations on the laws and regulations of the world’s key financial and commercial centers, including on business structure, day-to-day regulatory/compliance issues and regulatory relationships. Capitalizing on our broad international capabilities, we provide innovative solutions on a national and cross-border basis while assisting clients in maintaining their relationships with regulators.

Our lawyers have significant experience in establishing new financial institutions and infrastructure providers, structuring and facilitating businesses including through acquisitions, dispositions and reorganizations of financial businesses, and advising on regulatory aspects of other types of transactions such as capital markets offerings, structured finance transactions and funds.

During this time of considerable change in global financial regulation, we are advising on the financial regulatory developments and the new issues raised by those changes. Our lawyers are also continually monitoring pending regulatory and legislative proposals in order to keep our clients well positioned with practical and detailed analysis.

We regularly advise clients on:

• Organizational structuring
• Prudential issues, including capital adequacy, consolidated supervision, board/senior executive roles/actions and compensation
• Conduct of business, including sales and trading
• Customer and related agreements
• Commercial arrangements
• Consumer credit and retail financial services
• Regulation of transactions, including securities offerings, M&A and derivatives
• Exchange, multilateral trading facility (MTF), clearing house and settlement system rules
• Money laundering and foreign corrupt practices legislation
• Internet products and services
• New financial services, systems and products
• Impact of new laws and regulations
• The Dodd-Frank Act, related rulemaking (such as the Volcker Rule) and related international initiatives
• Disputes with regulatory bodies, regulatory investigations and enforcement proceedings
• Litigation and arbitration
• Insolvency
• Antitrust and competition law

We command a wealth of experience in both international and local contexts, through offices located throughout the Americas, Europe and Asia. Several lawyers in the group previously held prominent positions in key regulatory authorities worldwide, including the SEC, the Federal Reserve System, the Office of the Comptroller of the Currency, U.S. Treasury, Internal Revenue Service, NASD, Nasdaq, the UK’s FSA and various European and Asian regulatory agencies.

Representative Engagements

Our recent engagements include representing:

• Allianz in the sale of Dresdner Bank to Commerzbank
• Banco Itaú Holding Financeira in its combination with Unibanco-Uniao de Bancos Brasileiros to form Itaú Unibanco Holding
• Citibank in the sale of CEFS, which manages the Post Office Card Accounts, to JPMorganChase Bank
• Hedge funds and financial institutions on their prime broker arrangements
• Hypo Real Estate on the regulatory aspects of its restructuring
• ICE Clear Europe in its establishment as the first new derivatives clearing house in London since 1880. The team that worked on this deal was named the Structured Finance/Debt Capital Markets Team of the Year in 2010 by Legal Business
• ICE on its establishment of a CDS central counterparty in New York and London, its acquisition of The Clearing Corporation, and in the formation (and conversion to non-bank status pursuant to Dodd-Frank) of ICE Trust U.S.
• ICE on its purchase of ECX, an exchange group for environmental contracts such as carbon credits
• IPIC on the acquisition and subsequent disposal of debt and equity interests in Barclays
• Legg Mason on its acquisition of Citibank’s asset management business
• LMAX Limited on the establishment of the first retail MTF trading contracts for differences
• Merrill Lynch on its sale to Bank of America
• Mitsubishi International Corporation and Mitsubishi Global Investment, both subsidiaries of Mitsubishi Corporation, in their acquisition of a 19.5% interest in Aladdin Capital Holdings
• Mizuho Corporate Bank in its minority investment in Merrill Lynch and in Evercore
• Morgan Stanley in the Ron Perelman litigation
• North Cove Partners in its spin-out from Bank of America and formation of an independent private equity firm
• RBS in its acquisition of ABN AMRO Bank with Fortis Bank and Banco Santander Central Hispano
• RBS and UBS Investment Bank as joint dealer managers on a tender offer by the Royal Bank of Scotland plc
• SIX x-clear in becoming the second (parallel) central counterparty for the London Stock Exchange and on acting as clearing house to several MTFs, including as parallel clearing house with other European clearing houses
• Société Générale in connection with its €4.8 billion rights offering
• Various financial institutions on issues arising from the Lehman insolvency and on investments with Bernard Madoff

Our Financial Institutions Advisory and Financial Regulatory practice encompasses the following areas:

Banking
Our highly regarded banking advisory lawyers counsel the largest and most dynamic global institutions on M&A, regulatory and general advisory matters and on their relationships with banking regulators worldwide. We provide advice on a wide range of issues covering all U.S. federal banking laws and associated regulations, the UK Financial Services and Markets Legislation, and European directives and regulations.

Securities Broker-Dealer
We advise the world’s most dynamic broker-dealers on regulatory, compliance and securities law matters in all major global jurisdictions (including the various U.S. federal and state systems), on all aspects of:

• FINRA and SEC rules of conduct for broker-dealers
• FSA rules
• EU, EEA directives and the rules of exchanges
• MTFs
• Clearing houses and settlement systems
• Derivatives and structured products

Our lawyers also counsel commodities, futures and derivatives market participants on every aspect of their businesses, providing transactional support, developing new services and products, and advising on regulation and compliance, including new regulation and registration categories.

Investment Funds, Managers, Operators, Administrators and Distributors
We have a diverse and sophisticated funds practice, with experience in all major asset classes and geographies, and advise on a broad range of alternative investment products and services, including private equity funds, hedge funds, real estate funds, Shari’ah compliant funds and registered and unregistered funds of hedge funds.

Derivatives and Structured Products
We advise financial institutions, hedge funds, pension plans and corporates in developing, structuring and executing a variety of structured products and derivative instruments. We advise on cleared and non-cleared products and provide counsel on the impact of related new and proposed legislation.

Exchanges, Electronic Communication Networks, Multilateral Trading Facilities, Clearing and Settlement
We have acted as lead advisor to some of the world’s major financial infrastructure providers on their proprietary businesses, including their participant rules, relationships with other service providers (including through outsourcings) and regulatory compliance.

Insurance, Reinsurance and Intermediation
We counsel many of the world’s largest insurance and reinsurance companies, providing advice on M&A, securities, regulatory, litigation, tax and related issues. We have extensive experience in the major insurance and reinsurance markets.

Investigations and Enforcement
We have represented financial market participants in investigations and criminal and enforcement proceedings before numerous bodies, including the Fed, DOJ, SEC, CFTC and FSA, for alleged violations of laws and regulations. These matters have related to the confidentiality of information, disclosure and accounting questions, regulatory audits and trading procedures.