Eligible Financial Contracts - A Legal Analysis

"This book will go a long way to explaining what eligible financial contracts are and what effects they may have (including benefits and defects). It will get the reader beyond the jargon and provide a firm foundation upon which one will be able to navigate the dark tunnels of this area with all of the bumps, dips and pitfalls."

From the Foreword by The Honourable James Farley

Your Source for Understanding Derivatives and other Eligible Financial Contracts in a Volatile Market
With the current wave of insolvencies, bankruptcies and liquidations faced by financial institutions and corporations, the need for practitioners to understand which and how financial contracts are eligible for legal protection has never been more important. Considering that many businesses employ derivatives and other eligible financial contracts (EFCs), practitioners need to be well-versed in the contractual mechanisms and statutory exceptions that protect counterparties in default situations and during insolvency-related proceedings. A firm grasp of how Canadian legislation shelters EFCs is paramount during the current economic crisis as recent events have proven that these instruments can have a significant impact on financial markets.

Martin Marcone, a noted legal and financial expert, deals with these issues in Eligible Financial Contracts, a new publication from Butterworths that is as well-timed as it is informative. The resulting text will help practitioners steer their way through a highly complex yet increasingly relevant area of the law.

Features and Benefits
Practitioners seeking to understand EFCs and how they are protected by Canadian insolvency legislation will be armed with a range of tools, including:

• Regulatory analysis - a complete description of both international and domestic regulatory capital adequacy frameworks and how they affect the treatment of EFCs within Canada
• Practical explanations and examples - Detailed explanations of the EFCs and their fundamental provisions, including reproductions of primary industry-standard derivative contracts published by the International Swaps and Derivatives Association (ISDA)
• Legal analysis - a provision-by-provision explanation of the key Canadian statutes impacting EFCs, including a review of relevant case law.

Analysis of Timely Issues
With Canadian-specific analysis of the ISDA Master Agreement, Eligible Financial Contracts tackles the key issues by offering:

• Detailed commentary in respect of each EFC listed in applicable Canadian statutes, including various forms of derivatives, repurchase transactions, securities loans, margin loans and related guarantees and collateral arrangements
• Practical and legal explanations of how netting and collateral are used to mitigate risk in respect of EFCs, including examples appearing in ISDA documentation
• Structured descriptions of the Canadian legal protection available for EFCs
• Considerations for foreign market participants doing business in Canada

A Must-Have For

• Lawyers, traders and negotiators - who need to understand EFCs and how they are protected by Canadian insolvency laws
• Domestic and foreign insolvency practitioners - who are seeking complete explanations of key legislation in this area
• Financial institutions and companies - who are involved in trading the various types of EFCs
• International lawyers and academics - seeking to understand the development and operation of Basel II and the Accord's impact on domestic capital adequacy standards