A [[financial instrument]], feared in Nebraska as some kind of [[Financial weapons of mass destruction|WMD]], in the cradle of the Levant as a sort of Godless gambling contract, amongst commodity producers of the Midwest (other than that one fellow in Omaha) as a legitimate [[hedging]] activity, and for legions of patient [[negotiator|negotiators]] in London, New York, Hong Kong and the thriving satellite constellation of low-cost jurisdictions from Bangalore to Nashville, a steady, dreary, unglamorous means of keeping home fires stoked and food upon the table.
{{tag|MiFID}} definition of [[derivative]] comes from the latter half (items (4) - (10)) of the definition of "[[Financial instrument - FCA Rulebook Term|Financial Instruments]]" set out in Section C of Annex I to {{tag|MiFID}} as follows:
Could be a [[swap]]<ref>Also, fondly, known as a [[sw-ŏp]], but ''never'' a [[sw-æp]]. [[Swap does not rhyme with crap|Swaps aren’t, and don’t rhyme with, crap]].</ref>, an [[option]] or a [[future]].
{{box|
Not, and especially not now, in light of the fabulous parallel regulation of the [[Securities Financing Transactions Regulation]], a [[stock loan]] or a [[repo]].
(3) [[Units in collective investment undertakings]] ({{tag|UCITS}}); <br>
:{{derivativecontractdefinition}}
(4) [[Option]]s, [[future]]s, [[swap]]s, [[forward rate agreement]]s and any other [[derivative contract]]s relating to securities, currencies, interest rates or yields, or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash; <br>
(5) [[Option]]s, [[future]]s, [[swap]]s, [[forward rate agreement]]s and any other [[derivative contract]]s relating to [[commodities]] that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event); <br>
(6) [[Option]]s, [[future]]s, [[swap]]s and any other [[derivative contract]] relating to [[commodities]] that can be physically settled provided that they are traded on a regulated market and/or an MTF; <br>
(7) [[Option]]s, [[future]]s, [[swap]]s, [[forward]]s and any other [[derivative contract]]s relating to [[commodities]], that can be physically settled not otherwise mentioned in C.6 and not being for commercial purposes, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are cleared and settled through recognised clearing houses or are subject to regular margin calls;
(8) [[credit derivatives|Derivative instruments for the transfer of credit risk]]; <br>
(9) Financial [[contract for differences|contracts for differences]]; <br>
(10) Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates, emission allowances or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event), as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market or an MTF, are cleared and settled through recognised clearing houses or are subject to regular margin calls. <br>
}}
{{anat|MiFID}}
__NOEDITSECTION__
__NOTOC__
=By Instrument=
==[[Securities]]==
===[[Debt Capital Markets]]===
*[[Medium Term Note]] Programmes
*Stand Alone [[Eurobond]] Issuance
*[[Commercial Paper]]
**[[Euro Commercial Paper Programmes]]
**[[Asset-backed]] [[Commercial Paper]]
====Supporting Documentation====
*Legal Documents
**Constituting Instruments
**Agency Agreements
**Terms and Conditions
**Offering Materials
**[[ICMA]] form of Final Terms
*Board Authorisation
*Side Letters, Agent Appointments and Dealer Confirmations
====Hedging====
*Term Funding
*Basis Risk
====Offering and Resale====
=====Listing and Prospectus Directive=====
*Passporting and Home Regulators
*Listing Rules
*Regulated Stock Exchanges
**London Stock Exchange
**Irish Stock Exchange
**Luxembourg Stock Exchange
**other Stock Exchanges
*Non regulated market Stock Exchanges
**EuroMTF
**AIM
**Others
*ESMA-sponsored amendments to the Prospectus Directive
''These contracts are not necessarily traded under an ISDA framework but may will be traded according to Exchange rules or financial institutions' "Standard Terms of Business"''
*[[EFET]] - European Federation of Energy Traders Master Agreements (Power and Gas)
*[[IETA]] - International Emissions Trading Agreement
*[[SCOTA]] - Standard Coal Trading Agreement
===[[Prime Brokerage]]===
:[[MiFID]] definition of [[derivative]] comes from the latter half (items (4) - (10)) of the definition of “[[Financial instrument - FCA Rulebook Term|Financial Instruments]]” set out in Section C of Annex I to [[MiFID]] as follows:
(in scope?)
==Derivative Transactions==
===Market Risk===
====Asset Class====
*[[Equity Derivatives]]
*[[Credit Derivatives]]
*[[Currency Derivatives]]
*[[Interest Rate Derivatives]]
*[[Commodity Derivatives]]
=====Market Disruption=====
=====Gap Risk=====
===Credit Risk===
===Collateral and Credit Support===
====Collateral ====
=====Overview=====
*Treasury, Liquidity implications of Collateral posting and recieving
*[[Rehypothecation]] and [[client asset]] protection
=====Credit Support Annex=====
*1994 NY Pledge form of CSA
*1995 english Law Title Transfer
=====Eligible Collateral=====
*Cash
*Sovereign Bonds
*Corporate Bonds
*Other Assets
**Letters of Credit
====Non-Collateral Credit Support====
*Guarantees
*"Liens" and Security Interests
====Intercreditors and Loan financing====
==Regulatory Environment==
{{sa}}
Implications for derivatives and capital markets transactions of regulatory initiatives. ''This should cross reference where appropriate the Financial Services Module''
(4) options, futures, swaps, forwards and any other derivative contracts relating to securities, currencies, interest rates or yields, emission allowances or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash;
(5) options, futures, swaps, forwards and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event;
(10) options, futures, swaps, forwards and any other derivative contracts relating to climatic variables, freight rates or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, OTF, or an MTF;
(11) Emission allowances consisting of any units recognised for compliance with the requirements of Directive 2003/87/EC (Emissions Trading Scheme).
Derivative /dɪˈrɪvətɪv/ (n.)
A financial instrument, feared in Nebraska as some kind of WMD, in the cradle of the Levant as a sort of Godless gambling contract, amongst commodity producers of the Midwest (other than that one fellow in Omaha) as a legitimate hedging activity, and for legions of patient negotiators in London, New York, Hong Kong and the thriving satellite constellation of low-cost jurisdictions from Bangalore to Nashville, a steady, dreary, unglamorous means of keeping home fires stoked and food upon the table.
MiFID definition of derivative comes from the latter half (items (4) - (10)) of the definition of “Financial Instruments” set out in Section C of Annex I to MiFID as follows:
