Hunton Andrews Kurth LLP is actively involved in the domestic and international legal aspects of physical, environmental, and financial commodities and derivatives trading around the world. Our commodities and derivatives trading groups offer clients a broad, interdisciplinary, and integrated set of legal resources unique to Hunton Andrews Kurth—attorneys in the firm’s energy, climate change, regulatory, and other practices collaborate with those groups to address client trading objectives and corresponding needs. The firm provides legal insights and guidance to enable clients to meet the challenges of an increasingly complex regulatory framework, not to mention the requirements of voluntary trading regimes, in the US and overseas.

Our clients include multinational oil companies, investor-owned utilities, power project developers, midstream operators, and coal, oil, and gas producers, as well as financial institutions, such as broker dealers, exchanges, trading houses, and hedge funds. Attorneys in our commodities and derivatives trading groups are located in London, Houston, Washington, New York, and other offices across the globe.

Energy Commodities Trading on Established Markets

Our commodities and derivatives trading groups support energy-trading clients in derivatives and physical trades for energy commodities that include electricity, coal, lignite, crude oil, refined products, propane, natural gas, and LNG. We advise clients on various matters related to trading, such as account agreements compliance and risk management policies, financial reporting, tax matters, recordkeeping, trading floor and middle office operations, and “rogue trader” insurance. We also represent clients on matters with CFTC, FERC, SEC, FTC, and state public utility commissions.

Trading of Physical Energy Commodities in Over-the-Counter Markets

Our commodities and derivatives trading groups regularly work with clients to negotiate and document all types of customized and standardized principal master forward trading agreements in use in the industry for trading and hedging transactions, including the General Terms and Conditions of major trading partners and, of course, the Edison Electric Institute (EEI) Master Agreement (including the EEI Power and Gas Annexes), ISDA Master Agreement (including the ISDA oil, gas and power annexes), North American Energy Standards Board (NAESB) Agreement and its predecessor, Gas Industry Standards Board (GISB) Agreement for trading natural gas in North America, and Western Systems Power Pool (WSPP) contract. We frequently negotiate credit support arrangements and master netting contracts, including guarantees, security agreements, and netting agreements among international parties. We also represent market participants in the drafting and negotiation of structured transactions related to commodities, such as intermediation structures and long-term supply agreements.

Financial Trading and Hedging in Regulated and Over-the-Counter Markets

Hunton Andrews Kurth routinely counsels energy and other clients on financial trading and hedging transactions on fully regulated exchanges, and  on exempt commercial markets and in bilateral OTC markets, including transactions to be given up to clearinghouse and those to be settled on a bilateral basis. We regularly assist clients on the negotiation of ISDA Master Agreements, as well as related schedules and annexes, and on the negotiation of transaction confirmations –  both long and short form – incorporating a wide variety of ISDA definitions. We have developed customized swap confirmations for use pending the execution of formal master trading agreements as well as swap confirmations for traditional swap and basis trading activities.

We provide related regulatory and transactional counsel involving all major North American and global energy commodity exchanges, including the New York Mercantile Exchange (NYMEX), Chicago Board of Trade (CBOT), Kansas City Board of Trade (KCBT), Chicago Climate Exchange (CCX), Intercontinental Exchange (ICE), and Natural Gas Exchange (NGX). We also negotiate service and margining agreements with floor brokers, clearing brokers, clearing houses, futures commission merchants, and other financial service intermediaries on NYMEX, CCX, ICE, NGX, and more.

Climate Change and Emissions Trading

Hunton Andrews Kurth has been recognized as an international leader for climate change issues in Chambers Global, Chambers Europe, and Chambers USA.

We represent a variety of participants in the primary and secondary greenhouse gas emission reduction (carbon) credit and allowance markets. Our attorneys help clients prepare for and efficiently manage compliance with the emerging laws and regulations dealing with greenhouse gas emission reductions, including the Kyoto Protocol, EU Emissions Trading Scheme, US Regional Greenhouse Gas Initiative, Western Climate Initiative, and California’s A.B. 32, as well as voluntary carbon credit regimes. We also regularly represent US- and foreign-based entities participating in the compliance and voluntary carbon markets for hedging, speculative, and pre-compliance purposes.

Our US emissions trading practice advises clients on the structuring of innovative trades, advising on carbon funds, advising on Kyoto Protocol projects outside the US, setting up template forms to enable buyers and sellers to transact carbon trade under a voluntary regulatory paradigm, conducting due diligence on voluntary carbon projects, and advising large corporate entities on the development of strategic compliance plans for an emerging carbon market. Attorneys in this group are experienced in physical and financial carbon trades (the majority of the trades currently are physical), and US attorneys regularly work in both the voluntary and compliance carbon markets involving the Kyoto Protocol and EU Emissions Trading Scheme.

Commodity Pool Operators

We represent clients with registration and disclosure issues as commodity pool operators. We help clients with various matters with the National Futures Association and state-level commodity pool laws.

Master Netting Agreements

We have negotiated master netting agreements for clients, and are conversant with all of the market standard forms and many proprietary forms. Many of these agreements have involved multiple affiliates located in several different countries and trading under a wide spectrum of master agreements.