Sector specific derivatives

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This Overview is a guide to the Banking & Finance content within the Sector specific derivatives subtopic, with links to appropriate materials.

Financial derivatives are contracts entered into between two parties, or purchased over an exchange, and which take their value from another instrument. They have a wide variety of uses and allow investors flexible and cost effective access to the movements of shares, bonds and instruments which are not available through direct investment in that particular asset class.

The flexibility of derivatives allows them to be used for a wide range of purposes. The Practice Notes in this sub-topic explain some of these different types of derivatives.

For more information on the different types of derivatives, see Practice Note: Types of derivatives.

Swaps

A swap describes a wide variety of derivative transactions. Since their inception in the 1980s, swaps have evolved into a worldwide market encompassing trillions of pounds worldwide in notional value. They are subject to different regulations and laws depending on the market in which they are traded. Swaps are generally documented under the International Swaps and Derivatives Association, Inc. (ISDA) framework.

In

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Latest Banking & Finance News

Banking and Finance weekly highlights—17 July 2025

This week's edition of Banking and Finance weekly highlights includes: (1) FCA publishes final stripped-back rules to help companies raise capital and boost growth; (2) analysis in the Vietjet Aviation Joint Stock Company case which examined the importance of ensuring that the security document clearly states whether the lender may exercise assigned rights prior to the security becoming enforceable; and (3) ISDA launches Notices Hub and protocol to streamline delivery and receipt of critical notices.

FCA issues Primary Market Bulletin 56

The Financial Conduct Authority (FCA) has issued Primary Market Bulletin 56. The bulletin outlines the FCA’s use of transaction and position data to monitor compliance with reporting obligations under the UK Market Abuse Regulation (UK MAR), including directors’ dealings. It highlights enforcement action taken against a former Person Discharging Managerial Responsibilities (PDMR) at Wizz Air Holdings Plc, who failed to notify 115 transactions, including trades during closed periods, resulting in a £123,500 fine. The bulletin also reminds issuers of the upcoming expiry on 29 July 2025 of transitional provisions under the UK Listing Rules (UKLR), including those for inflight applicants and shell companies and the need to ensure compliance with eligibility and operational requirements. Issuers are also reminded to provide up-to-date contact details as required. In addition, the FCA has announced plans to enhance the National Storage Mechanism and launched a user survey to support improvements to data accessibility.

ESMA defers changes to disclosure framework for private securitisations

The European Securities and Markets Authority (ESMA) has published a Feedback Statement summarising responses to its February 2025 consultation on a simplified disclosure template for private securitisations under Article 7 of the Securitisation Regulation (Regulation (EU) 2017/2402). The proposed template aimed to reduce reporting complexity and to better reflect the bilateral nature of private transactions. While stakeholders generally supported the objective of simplification, most respondents advised against proceeding with the amendments at this stage, citing the ongoing review of the Level 1 framework and the risk of regulatory misalignment. ESMA has therefore decided to defer any changes to the technical standards until key concepts under Level 1 are clarified.

ISDA launches Notices Hub and protocol to streamline delivery of critical notices

The International Swaps and Derivatives Association (ISDA) has launched the ISDA Notices Hub and the ISDA 2025 Notices Hub Protocol to provide a digital alternative for delivering time-sensitive notices under the ISDA Master Agreement. The initiative is intended to support more efficient and reliable delivery of termination notices and waivers, particularly in circumstances where physical delivery may be delayed or impractical. The ISDA Notices Hub, developed in collaboration with S&P Global Market Intelligence, is a secure online platform that facilitates the exchange of critical notices and centralises address updates. The accompanying protocol enables firms to amend their documentation to allow use of the Hub, with 79 entities having adhered at launch. The platform is available at no cost to buy-side firms, with discounted access for dealers during the initial period. Features include automated notifications and a single-entry system for updating delivery details across agreements.

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