Derivatives and Structured Products Legal Outlook 2024
In our Derivatives and Structured Products Legal Outlook 2024, we are delighted to share a series of high-level overviews of the key topics we expect to have an impact on the derivatives and structured products landscape over the coming year.
2024 looks set to be another busy year, with considerable regulatory and market developments anticipated – from reforms to EMIR in the EU, the Smarter Regulatory Framework in the UK, increasing divergence between the EU and UK rules impacting structured products and securitisation, to innovation in digital and ESG product areas.
Please do reach out to the contacts listed, or your usual Linklaters contact to discuss any of these topics in more detail.
Key Topics
1
OTC derivatives and clearing
Further change is on the horizon in 2024 as the Commission’s EMIR 3 proposal continues its progress through the legislative process. In the UK, it is anticipated that regulators will consider UK EMIR in the context of the Smarter Regulatory Framework, and work is continuing on the Wholesale Markets Review. We will also see the conclusion of the EMIR/UK EMIR REFIT reporting reforms.
The wave of regulatory reforms that took shape in 2023 looks set to gather momentum in 2024. These reforms include changes to the prospectus and retail disclosure regimes in both the EU and the UK and a variety of other investor protection measures.
Mainstream adoption of digital market infrastructure
Digital innovation in market infrastructure for traditional regulated markets is on a clear upward trajectory, while banks and traditional financial institutions continue to exercise vigilance towards decentralised native cryptoassets. This trend is reflected in the outputs of financial sector industry bodies.
ESG: The outlook for derivatives and structured products
We expect to see an even greater diversity and volume of ESG-linked derivatives and structured products transactions executed in 2024, as investors continue to seek more sustainable investment opportunities. Carbon allowances, structured product solutions, social/governance financing wrapped transactions and debt for nature swaps are all likely to receive focus this year.
Risk sharing transactions remain an important tool for banks managing their regulatory capital requirements and credit risk. However, there are a number of important regulatory developments coming up which will shape the market in 2024, including changes to both the UK and EU securitisation rules and the prudential treatment of securitisations.
