This course will examine how derivatives are regulated. It will introduce students to the most common forms of derivative instruments, how they are used and the regulatory structure applicable to futures, options and swaps. It will cover the regulation of exchanges and clearinghouses, including issues of principle-based vs. rule based regulation, conflicts of interest and governance standards. It will consider issues of systemic risk and the efforts of regulators to increase transparency in the derivatives markets.
The course will cover the regulation of foreign exchanges and intermediaries and the impact of regulation on global derivatives business. The course will also study the law of market manipulation and other fraudulent or disruptive trading practices and how regulation seeks to protect market users and the price discovery process.