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About the practice
Awards and accolades
Deals
Know-how and materials
Islamic Finance Derivatives contacts
Our news
The 14 November 2009 edition of International Financing Review includes an article on the Sharia-compliant derivatives in which partner Richard Tredgett and associate Yusuf Battiwala are quoted commenting on the Master Agreement for Sharia-compliant derivatives. Access by subscription only.
Innovation: Downturn temporarily blunts inventiveness Article in the Financial Times (5 May 2009). Access by subscription only.
The journey towards absolute return Article in The Banker (10 March 2009).
Shariah CDS In The Works An article in Derivatives Week (24 Nov 2008). Access by subscription only.
Profit rate swap The market for Sharia-compliant derivatives products is at a fascinating juncture and we are witnessing the embryonic stages of an OTC derivatives market.
August 2008 edition of Risk Magazine includes an article on the techniques being used to enable investors to access hedge funds in a sharia-compliant way. Partner Nick Williams isquoted. Access by subscription only.
About the practice
The Islamic Finance Derivatives team forms part of Allen & Overy's renowned Derivatives & Structured Finance practice which is well known in the market for being innovative and commercially aware of client’s needs. The Derivatives & Structured Finance practice is a market leader and includes 14 partners and over 68 qualified associates specialising in derivatives work.
The team is also global external counsel to the International Swaps and Derivatives Association, Inc (ISDA). Such expertise has proved an invaluable foundation from which to build the innovative structures now evolving in the Islamic finance derivatives field.
Our Islamic Finance Derivatives team works on predominately private bilateral transactions and have been involved in a number of bespoke transactions involving the development of OTC derivatives technology that would be considered halal in the world of Islamic Finance. Our clients are based predominately in London however, we do also work closely with our offices in Dubai and Saudi Arabia to help better service clients based in that geographical region.
Through innovative structuring of certain Islamic products e.g. murabaha, wa'ad, arbun and/or salam one can mimic conventional swap cash flows and therefore generate a similar economic profile to conventional derivatives. To date we have drafted Sharia compliant cross-currency swaps, profit rate swaps, credit default swaps, structures that embed options, total return swaps and Sharia compliant retail programmes.
Simultaneously we have also been involved in the increasing use of equity swaps in the Middle East. Structuring a secured loan by way of an equity swap is becoming the preferred route for a number of key Islamic clients and this methodology has been regularly used to secure credit lines from a number of international banks.
We are at the cutting edge of understanding the synergy between English law and Sharia law issues and have an increasing body of know how relating to English law and local law insolvency issues, netting and set-off peculiarities, broker arrangements and have analysed in some depth how certain financial arrangements such as indemnities and pecuniary loss would be viewed given current scholarly thought.
We have also been actively involved in ISDA-IIFM-run discussions to develop a Sharia-compliant ISDA Master Agreement and have commented extensively on this project most notably as to how one can document a Sharia compliant close-out mechanism.
Awards and accolades
“In the field of OTC and primary market derivatives, the firm is in a class of its own” Chambers UK, 2008
“Allen & Overy LLP remains the first choice for derivatives both in the UK and internationally” Legal 500 UK, 2006/7
"Allen & Overy has few competitors for the most complex finance work. It has appeared on the Islamic tranches of many massive projects in the Middle East, and has a history of ground-breaking transactions in various areas" Legal 500 UK, 2006/7
"Allen and Overy is well placed to capitalise on the growing sophistication of the Islamic Finance market" Chambers UK, 2008
Deals
Know-how and materials
Islamic Finance Derivatives contacts
Richard Tredgett
Richard is a partner in the Derivatives and Structured Finance Group in Allen & Overy LLP. He advises on various forms of structured finance and derivatives transactions. He has worked on many documentation projects for the International Swaps and Derivatives Association, including ISDA’s EMU Protocol, ISDA’s 2002 Master Agreement and various commodity and energy-related documentation initiatives. He is a frequent speaker on derivatives documentation and collateral. Richard is advising a number of major investment banks on OTC Sharia-compliant derivative transactions.
richard.tredgett@allenovery.com
Andrew Sulston
Andrew is a partner in the Derivatives & Structured Finance Group in Allen & Overy LLP. Andrew trained at Allen & Overy and was admitted as a solicitor in England and Wales in 1997. He spent 2½ years in the Tokyo office following qualification and returned to London in 2000. Andrew specialises in derivative securities and other derivative products linked to a wide range of underlying asset classes. Working primarily with a number of major financial institutions, he works in the areas of equity-linked, fundlinked, credit-linked, FX products and emerging markets transactions. He is also increasingly involved in products for the retail markets and Sharia compliant securities products, including Wa’ad based products under structured securities programmes.
andrew.sulston@allenovery.com
Yusuf Battiwala
Yusuf is an associate in the Derivatives & Structured Finance Group at Allen & Overy LLP in London and is also a member of the firm’s Islamic Finance Group. He has worked in its London, New York and Frankfurt offices and has also been on secondment to a major investment bank.
Yusuf advises on a wide range of OTC derivatives and structured finance transactions, including a variety of Shari'a-compliant transactions. He has advised on a number of Shari'a-compliant hedging structures utilising traditional Islamic contracts such as the murabaha and the wa'ad. As an active member of the working group, he has commented extensively on the draft Master Agreement that is to be published by ISDA/IIFM to document Shari'a-compliant hedging transactions. He has also advised on Shari'a-compliant structured note programmes, including advising Deutsche Bank on the groundbreaking Al Mi'yar programme which provides for investors to receive a profit or loss on their investment based on the performance of a wide range of independent reference assets or indices whilst offering the full range of structured product pay-offs. Yusuf is also involved in developing template documentation for credit default swaps on sukuks.
yusuf.battiwala@allenovery.com
Kevin O'Sullivan
Kevin O’Sullivan specialises in derivatives and structured finance transactions. His experience includes advising corporates, banks, pension trustees, open-ended investment companies and insurance companies on ISDA documentation. He has worked on transactions involving credit derivatives (particularly CDS on ABS) and equity derivatives. He has also experience of Shari'a compliant trade documentation. Kevin has spent time in our Singapore office and also on a client secondment with Credit Suisse.
kevin.osullivan@allenovery.com
Further information
Find out more about Allen & Overy's Islamic Finance Group.