Sector specific derivatives

Copyright © 2025 LexisNexis

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

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Existing user? Sign-in TAKE A FREE TRIAL
Powered by Lexis+®
Latest Banking & Finance News

The Supreme Court tweaks Etridge (Waller Edwards v One Savings Bank plc)

Property Disputes analysis: English property law periodically produces epoch-making decisions of the highest court. In years to come, Waller Edwards v One Savings Bank plc may well become such a decision. It enjoys the respectable jurisprudential lineage of three famous House of Lords’ decisions: Barclays Bank v O’Brien, CIBC Mortgages v Pitt, and Royal Bank of Scotland v Etridge, but it also applies established principles in a novel way. Written by Marc Beaumont, Windsor Chambers.

ESMA updates Q&As on Prospectus Regulation, MiCA and UCITS Directive

The European Securities and Markets Authority (ESMA) has published updated questions and answers (Q&As) on regulatory implementation relating to the Prospectus Regulation (EU) 2017/1129, the Markets in Cryptoassets Regulation (Regulation (EU) 2023/1114) (MiCA) and the Undertakings for Collective Investment in Transferable Securities Directive (Directive 2009/65/EC) (UCITS). The Prospectus Regulation Q&A impacted is ‘Historical financial information’. The impacted MiCA Q&As are: (1) ‘Custody agreements in the exercise of rights attached to cryptoassets’; (2) ‘Commingling clients’ crypto-assets with crypto-assets from other entities of the group when acting as custodian’; and (3) ‘Shared order book model’. The impacted UCITS Directive Q&A is ‘Updates of notification letters for the cross-border marketing of UCITS’.

ISDA announces July 2025 launch of new derivatives notices platform

The International Swaps and Derivatives Association (ISDA) has announced the launch its new Notices Hub platform on 15 July 2025, addressing critical challenges in delivering derivatives termination notices. The platform aims to replace physical delivery requirements in ISDA Master Agreements, solving problems that emerged during pandemic lockdowns and the Ukraine invasion when office closures and safety concerns made physical delivery difficult. The platform will feature secure online delivery, automatic alerts to designated recipients, and the ability to update physical address details across all agreements through a single entry. The service will be free for buy-side firms, with dealers receiving a two-year discount for early adoption. ISDA has opened a free pre-adherence process for firms to sign the protocol updating their agreements. The platform will also allow for the exchange of waivers, such as those for net asset threshold events, bringing structure to what has traditionally been an ad hoc process.

LSE publishes first round of ISM Rulebook amendments for 2025

The London Stock Exchange (LSE) has published Market Notice N06/25, confirming amendments to the International Securities Market (ISM) Rulebook, following its initial consultation (Notice N03/25 from 29 May 2025). These changes, which take effect on 30 June 2025, will clarify existing requirements for expert statements and extend guaranteed bond structure provisions to sukuk instruments (Islamic finance). This consultation marks the first of two planned for 2025, with a second consultation expected to discuss alignment with the Financial Conduct Authority’s new Prospectus Rules. Market participants have responded positively to these technical clarifications. The updated ISM Rulebook will be available on the LSE website from 30 June 2025.

View Banking & Finance by content type :  
News
Practice notes
Precedents
Q&As

Popular documents

Total return swaps

Total return swapsWhat is a total return swap?A total return (or total rate of return) swap (TRS) is derivative contract in which one counterparty transfers the total economic performance, including income from interest and fees, gains and losses from price movements, and credit losses, of a

Credit linked notes

Credit linked notesWhat is a credit linked note?A credit linked note (CLN) is a funded credit derivative (see Practice Note: What are credit derivatives?). Unlike a credit default swap (which is in essence its unfunded equivalent), a CLN will be reflected on the balance sheet of the issuer of the

A negotiation guide for the 2002 ISDA Schedule

A negotiation guide for the 2002 ISDA ScheduleWhat is the ISDA Schedule?The International Swaps and Derivatives Association (ISDA) documentation framework involves layers of documentation (often referred to as the ISDA documentation architecture). The key layers of the documentation for a trade

ISDA and FIA Cleared Derivatives Execution Agreement and Addendum

ISDA and FIA Cleared Derivatives Execution Agreement and AddendumClearing requirements have brought about significant changes to derivatives documentation. While uncleared derivatives continue to be governed by an International Swaps and Derivatives Association (ISDA) Master Agreement and a Credit
Total return swaps

Total return swaps

Total return swapsWhat is a total return swap?A total return (or total rate of return) swap (TRS) is derivative contract in which one counterparty transfers the total economic performance, including income from interest and fees, gains and losses from price movements, and credit losses, of a

Credit linked notes

Credit linked notes

Credit linked notesWhat is a credit linked note?A credit linked note (CLN) is a funded credit derivative (see Practice Note: What are credit derivatives?). Unlike a credit default swap (which is in essence its unfunded equivalent), a CLN will be reflected on the balance sheet of the issuer of the

A negotiation guide for the 2002 ISDA Schedule

A negotiation guide for the 2002 ISDA Schedule

A negotiation guide for the 2002 ISDA ScheduleWhat is the ISDA Schedule?The International Swaps and Derivatives Association (ISDA) documentation framework involves layers of documentation (often referred to as the ISDA documentation architecture). The key layers of the documentation for a trade

ISDA and FIA Cleared Derivatives Execution Agreement and Addendum

ISDA and FIA Cleared Derivatives Execution Agreement and Addendum

ISDA and FIA Cleared Derivatives Execution Agreement and AddendumClearing requirements have brought about significant changes to derivatives documentation. While uncleared derivatives continue to be governed by an International Swaps and Derivatives Association (ISDA) Master Agreement and a Credit