Regulation of equity derivatives

Copyright © 2025 LexisNexis

This Overview is a guide to the Financial Services content within the Regulation of equity derivatives subtopic, with links to appropriate materials.

What are equity derivatives?

An equity derivative is a financial instrument that references and offers economic exposure to the performance of an equity asset or other equity-related variable from which the instrument’s price or value is derived.

Equity derivatives may be traded on an exchange or over-the-counter (OTC) (see further details below). They may also be funded or unfunded. Equity derivatives are used primarily by funds and investors as speculative investments and by end users and banks as commercial hedges. However, they also have a variety of other uses which will be covered in further detail below.

Equity derivative instruments fall into the following five principal categories:

  1. •

    options—the two main types of options are put options and call options. A put option holder has the right to sell an underlying asset (for example shares) to a counterparty for an agreed price on an agreed

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 Financial Services News

FCA's Jessica Rusu speech highlights AI innovation and Nvidia collaboration

The Financial Conduct Authority (FCA) has published a speech delivered by its chief data, information and intelligence officer, Jessica Rusu, at London Tech Week 2025. The speech outlines the FCA's five-year strategy to deepen trust, rebalance risk, support growth, and improve lives through the use of artificial intelligence (AI) and industry collaboration, notably with Nvidia. Rusu noted that the FCA has established an AI Lab with four components— AI Sprint, AI Input Zone, AI Spotlight and the ‘Supercharged Sandbox’—to evaluate the risks and opportunities of AI in financial services. Rusu also noted the introduction of AI Live Testing which allows firms to test AI models in a controlled, live setting during development. The speech highlights that the collaboration with Nvidia will enhance the Digital Sandbox by providing advanced GPU tools, software, and training resources. This partnership aims to support innovative companies in developing, refining, and scaling AI models. The speech further notes that the FCA is modernising its internal processes by digitising regulatory procedures and streamlining legacy systems to support the growth and competitiveness of the UK financial services sector.

FCA publishes final rules for the PISCES sandbox to allow trading in private company shares

The Financial Conduct Authority (FCA) has published policy statement PS25/6, establishing the final rules for the Private Intermittent Securities and Capital Exchange System (PISCES)—a new platform where shares in private companies can be traded on an intermittent basis. The platform will be delivered through a sandbox approach, allowing the FCA to test the design before finalising a permanent regime in 2030. The sandbox is now open and prospective operators should apply to the FCA for a PISCES approval notice. Once approved they will be able to run intermittent trading events.

Financial Services—other developments (10/6/2025)

A round-up of other developments, which have not been covered in full by the LexisNexis Financial Services practical guidance team but may nevertheless be of interest.

FCA appoints Sarah Pritchard as new deputy chief executive

The Financial Conduct Authority (FCA) has appointed Sarah Pritchard as deputy chief executive to manage its expanding responsibilities, which now include oversight of the Payment Systems Regulator, regulation of stablecoin and crypto firms, and buy now pay later activities. Pritchard, who joined the FCA in June 2021, previously led the supervision, policy and competition division as well as the markets’ function, and has overseen reforms including the overhaul of the listing rules. In her new role, she will also be responsible for the FCA’s international work, supporting efforts to enhance UK growth and competitiveness.

View Financial Services by content type :  
News
Practice notes
Precedents
Q&As

Popular documents

Priority between loss reliefs in loss making companies

Priority between loss reliefs in loss making companiesWhy does it matter?A company that is a member of a group and has incurred any of the types of losses available for surrender by way of group relief may, without any further rules, have more than one way in which to use the loss. There are a

Late payment penalties—inheritance tax

Late payment penalties—inheritance taxWhile interest often accrues on overdue tax, the late payment of certain taxes may also attract a penalty. For information on the interest accruing on overdue tax, see Practice Notes: IHT—payment deadlines on death—Interest on IHT and Interest on late paid

Contributory negligence in personal injury claims

Contributory negligence in personal injury claimsContributory negligence is a partial defence which can lead to a discount in damages.Other defences may also be relevant. See Practice Notes: Did the claimant consent to the risk of injury? and Was the claimant involved in an illegal activity?If a

Template for regulatory references given by SMCR firms and disclosure requirements

Template for regulatory references given by SMCR firms and disclosure requirements[Insert addressee details]Dear [insert name][It is our understanding that [insert name of prospective employee] [was an employee of yours between the dates of [insert dates as appropriate] OR is a current employee of
Priority between loss reliefs in loss making companies

Priority between loss reliefs in loss making companies

Priority between loss reliefs in loss making companiesWhy does it matter?A company that is a member of a group and has incurred any of the types of losses available for surrender by way of group relief may, without any further rules, have more than one way in which to use the loss. There are a

Late payment penalties—inheritance tax

Late payment penalties—inheritance tax

Late payment penalties—inheritance taxWhile interest often accrues on overdue tax, the late payment of certain taxes may also attract a penalty. For information on the interest accruing on overdue tax, see Practice Notes: IHT—payment deadlines on death—Interest on IHT and Interest on late paid

Contributory negligence in personal injury claims

Contributory negligence in personal injury claims

Contributory negligence in personal injury claimsContributory negligence is a partial defence which can lead to a discount in damages.Other defences may also be relevant. See Practice Notes: Did the claimant consent to the risk of injury? and Was the claimant involved in an illegal activity?If a

Template for regulatory references given by SMCR firms and disclosure requirements

Template for regulatory references given by SMCR firms and disclosure requirements

Template for regulatory references given by SMCR firms and disclosure requirements[Insert addressee details]Dear [insert name][It is our understanding that [insert name of prospective employee] [was an employee of yours between the dates of [insert dates as appropriate] OR is a current employee of