Trading Policies & Procedures

Kolobara Law Firm assists market participants with identifying, quantifying, and managing legal and regulatory risk with an emphasis on prevention. To that end, we continuously develop tools and practices to enable our clients to adequately understand and implement the evolving regulatory and market conditions. In particular, Kolobara Law Firm counsels market participants about the best industry practices for review and evaluation of their underlying documentation. As a foundation document for every market participant’s trading or hedging activities, it is imperative that risk management policies and procedures are continuously reviewed and amended to accurately reflect a company’s strategic and financial direction.
Kolobara Law Firm provides comprehensive evaluation, drafting, training, and implementation services for trading/risk management policies and procedures, with clearly defined objectives and deliverables including the following:

Outlining a clear directive and authority from the governing body (Board/Audit Committee/Risk Oversight Committee), authorizing the operational implementation of trading policies and procedures and the approved practices governing the trading and exposure
management activities, as well as management’s accountability with respect to the compliance of trading and exposure management activities in accordance with the policies and procedures;
Implementing a clear segregation of duties on the trade floor including up-front deal flow analysis, independent monitoring (including independent valuations, price curves, models, and stress testing), and effective reporting (mid-market and daily mark-to-market);
Ensuring that there is a clearly defined appetite for risk, from a corporate viewpoint, including the exposure and position limits, stop loss limits, approved trading strategies and products, as well as regional markets;
Identifying and implementing a clearly outlined sequence of events for entering into trades (including any prior review and approval by various groups – credit, risk, tax, legal), verifying and confirming the trades, and following up with any further steps (such as
option exercise notifications, calculation period resets for rate swaps);
Verifying that there is sufficient documentation to ensure consistent and adequate legal and contractual protections across portfolio(s);
Enabling mandatory training requirements for all trading personnel to ensure that the most current and appropriate regulatory
requirements are timely communicated to everyone involved in the trading/risk management activities;
Ensuring that there is unequivocal emphasis on creating and maintaining a culture of compliance both internally and externally,
including, but not limited to: anti-manipulation rules and prohibited trading strategies, price reporting rules, generation and capacity rules, shipper-must-have rules, exchange position limit rules, large trader reporting requirements, and bona fide hedge definition;
Demonstrating clear and consistent enforcement, including appropriate sanctions for violating policies and procedures.