SPECULATORS CAN AMASS LARGE WEALTH “Speculators can amass large wealth from financial derivates but the law of such derivative falls far short of ethics”.

Speculators can amass large wealth from financial derivates but the law of such derivative falls far short of ethics

Transactions linked to commodities, securities, foreign exchange rates, interest rates, indexes of inflation, derivatives and other conditional triggering events; 2. Call options and put options; and Obligations to deliver securities, currency or commodities not earlier than three days after making the agreement. In addition to introducing a working definition of derivative transactions, the Amendment Law granted the FSFM rulemaking authority for the regulation of derivatives. (Hull, J.C. 2009 pp. 56)

The FSFM recently used this authority to publish a draft rule that classifies assets, rates and indexes to which derivatives are linked as underlying assets and states that a derivative may be linked to one or several underlying assets. The rule also identifies options, futures, exchange forwards and swap agreements as derivatives. Commentators from the FSFM have indicated that, as drafted, the list of derivatives is not meant to be exhaustive. Master agreements for derivatives The Amendment Law provides that parties may enter into both master agreements that employ standard terms (such as the Isda Master Agreement) and bespoke agreements drafted to meet the special needs of the parties. Standard documentation for market was recently jointly published by the National Association of Securities Market Participants, and the National Foreign Exchange Association. Master agreements may include a provision for determining the close-out sum payable at the termination of multiple transactions. The Amendment Law does not, however, cover close-out netting as is common in the US and western Europe. As a result, in a bankruptcy a party may be required to pay the bankrupt counterparty monies owed under a derivatives contract without the benefit of offset against amounts owed it . One of the biggest changes was made in relation to the deductibility of derivative related expenses. Investors improperly certified as qualified investors may put the securities back to the broker or, in the case of an asset manager, require that the securities be sold to a third party, and recover from the broker or asset manager any losses. To reduce their risk profile stock brokers and asset managers tend to limit certification only to transactions qualified investors undertake with the certifying broker/asset manager and its affiliates or certify investors for each separate transaction. In 1969 when the Department of Defense began funding the research of computer networking and the idea Internet was conceived. By the 80's the Internet was still in its youth and very few households had access to the Internet, but at very grueling speeds. The Internet, as a means for commerce, did not become reality until the 1990's. Before this time, it was mainly a tool for the army, and a research device for some American universities. When faster more readily available and relatively cheep means of accessing the Internet were introduced, it was only then did people start ...