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Entering into derivatives contracts

What are common types of derivatives?

Angola

Angola

  • Swaps
  • Options
  • Futures

Last modified 23 Jul 2020

Australia

Australia

Derivative contracts are entered into in Australia for a range of reasons including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contract are widely used in Australia, including futures agreements and forwards, options, swaps (including credit default swaps) and contracts for difference. Underlying assets commonly include equities, fixed income instruments, commodities, foreign currencies and credit events.

The gross notional outstanding for interest rate derivatives in Australia is worth in excess of AUD10 trillion, the majority of which are denominated in AUD. There is also a sizeable FX swap market, with average daily turnover in excess of AUD100 billion.

Last modified 3 Dec 2019

Belgium

Belgium

The definition of ‘derivative’ is not set out in full in the European Market Infrastructure Regulation (EMIR) but cross refers to a sub set of financial instruments listed in the Markets in Financial Instruments Directive (MiFID).

Broadly speaking, a ‘derivative’ includes any option, future, swap, forward and other derivative contract relating to securities, currencies, interest rates, financial indices, commodities, financial contract for differences and credit default swap. This definition is, however, limited to bilateral derivative contracts, such as exchange traded derivatives (ETDs) and over-the-counter (OTC) contracts and does not, as a rule, include derivatives embedded in other contracts, such as securities or loans.

Last modified 18 Dec 2019

Brazil

Brazil

Derivative contracts are entered into in Brazil for a range of reasons including hedging, trading and speculation.

All of the main types of derivative contract are widely used in Brazil:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying assets seen in Brazil are:

  • equity;
  • interest rates;
  • commodities;
  • currencies; and
  • credit.

Last modified 4 Dec 2019 | Authored by Campos Mello Advogados

Canada

Canada

Derivative contracts are entered into in Canada for a range of reasons including foreign exchange, currency, commodity, hedging and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contracts are widely used in Canada:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contract is based on the value of the underlying assets. The main classes of underlying assets seen in Canada are:

  • equity;
  • interest rates;
  • commodities;
  • foreign currency; and
  • credit events.

Certain types of standardized over-the-counter derivatives, including interest rate swaps and foreign rate agreements, are also subject to mandatory clearing.

Last modified 2 Jan 2020

Chile

Chile

The most common derivatives in Chile are futures and forward agreements. There are also option agreements and swap agreements.

The main classes of underlying assets are (depending on the type of entity that enters into the specific derivative transaction):

  • local currencies;
  • goods, commodities and instruments representing such assets;
  • interest rates;
  • stock index and other indexes;
  • foreign currencies; and
  • indexation units (such as Unidad de Fomento).

Last modified 6 Dec 2019 | Authored by BAZ|DLA Piper

Colombia

Colombia

Under applicable Colombian law, derivatives are classified in two categories:

  • standardized – traded through the Colombian Stock Exchange (CSE), nonexistent counterparty risk because of the Central Counterparty Clearing House and constant liquidity (Market creators scheme); and
  • non-standardized – traded outside the CSE (Over the Counter), existing counterparty risk, the contracts are created taking into account the client's needs, and do not operate within a transactional system.

All of the main types of derivative contracts are widely used in Colombia:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in Colombia are:

  • equity;
  • interest rate;
  • commodities;
  • foreign currency; and
  • shares.

Last modified 20 Oct 2017 | Authored by DLA Piper Martinez Beltrán

Czech Republic

Czech Republic

Pursuant to the Act on Investment Companies and Investment Funds, all of the following main types of derivative contract are recognized under Czech law:

  • forwards;
  • futures;
  • swaps; and
  • options.

The value of derivative contracts is based on the value of the underlying assets. The main classes of underlying asset in the Czech Republic are:

  • securities;
  • interest rates;
  • exchange rate indices of funds held in Czech Crowns or a foreign currency;
  • securities contracts; and
  • commodities.

Last modified 20 Oct 2017

Finland

Finland

The main types of derivatives contracts used in Finland include inter alia:

  • swaps (such as interest rate and currency swaps);
  • forwards;
  • options;
  • futures; and
  • commodity-linked derivatives.

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying assets are:

  • equity;
  • fixed income instruments;
  • commodities;
  • foreign currency; and
  • credit events.

Last modified 26 Nov 2019

France

France

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contracts are widely used in France:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying assets seen in France are:

  • equity;
  • fixed income instruments;
  • commodities;
  • emission allowances;
  • indexes;
  • foreign currency; and
  • credit events.

Last modified 4 Dec 2019

Germany

Germany

Types of derivative contracts that are used in Germany include, among others:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

Last modified 20 Oct 2017

Ghana

Ghana

Forward contracts, interest rate swaps, currency swaps and options.

Last modified 15 Jan 2020 | Authored by Reindorf Chambers

Hungary

Hungary

Derivative contracts are entered into in Hungary for a range of reasons including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contract are widely used in Hungary:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in Hungary are:

  • foreign currency;
  • equity;
  • fixed income instruments; and
  • commodities.

Last modified 20 Oct 2017

Ireland

Ireland

In Ireland, derivative contracts are entered for a number of reasons, including hedging, arbitrage and speculation.

Derivatives may be traded OTC or on an organized exchange.

All of the main types of derivative contract are widely used in Ireland:

  • futures;
  • options (call options and put options); and
  • contracts for difference (including swaps (such as interest rate or currency swaps) and forwards).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in Ireland are:

  • equities;
  • fixed income instruments;
  • commodities;
  • foreign currency; and
  • credit events.

Last modified 16 Jul 2020

Italy

Italy

In Italy, derivative contracts are entered into for the following purposes:

  • hedging; and
  • trading (including trading for speculation purposes).

Derivatives may be traded over-the-counter (OTC) or on an organized exchange (ETD, Exchange Traded Derivatives).

The most common types of derivative contract in Italy entered into for hedging purposes are:

  • swaps (in particular interest rate swap or currency swap), as OTC derivative; and
  • forwards (to hedge foreign exchange rate risk).

The underlying asset is often constituted by a loan (denominated in euro), linked to the fluctuation of Euribor (or other similar reference rates).

The most common types of derivative contract in Italy entered into for trading purposes are:

  • futures;
  • swaps; and
  • options (call options and put options).

The value of the derivative contract is based on the value of the underlying assets and on other market factors. The most common underlying assets considered in the Italian market are:

  • equity;
  • fixed income instruments;
  • commodities;
  • foreign currency; and
  • credit events.

Last modified 22 Jan 2020

Ivory Coast

Ivory Coast

The main types of derivatives are:

  • futures;
  • forwards;
  • options; and
  • swaps.

The value of the derivatives is derived from the value of an underlying asset or group of assets, the main classes of which are:

  • Assets: commodities, shares or bonds;
  • Interest rates, exchange rates, or indices;
  • Foreign currencies.

Last modified 3 Aug 2020

Japan

Japan

The over-the-counter derivatives market is limited when compared with the market in the UK or US.

The market in derivatives has increased in recent years and derivative contracts are entered into in Japan for a range of reasons including hedging and speculation. Derivatives may be traded over-the-counter or on an organized exchange.

Common types of derivatives are:

  • forwards;
  • futures;
  • options;
  • swaps; and
  • credit derivatives.

Last modified 5 Dec 2019

Luxembourg

Luxembourg

Derivative contracts are entered into in Luxembourg for a range of reasons including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contract are widely used in Luxembourg:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in Luxembourg are:

  • equity;
  • fixed income instruments; and
  • foreign currency.

Last modified 10 Dec 2019

Mauritius

Mauritius

The most common types of derivatives are: 

  • futures;
  • options;
  • swaps; and
  • forwards.

Last modified 6 Dec 2019 | Authored by Juristconsult Chambers

Mexico

Mexico

In MexDer, only future, options and interest rate swap agreements are listed. Only futures and options with the following underlying assets are eligible:

  • futures – foreign currency, indexes, debt, shares and commodities; and
  • options – foreign currency, indexes, and shares.

All other types of derivatives contracts (including forwards and currency swaps) are privately negotiated in non-exchange-traded market transactions (OTC or Over the Counter).

Last modified 5 Dec 2019

Morocco

Morocco

Bank Al Maghrib Directive concerning the risk management framework for derivatives products defines derivatives as follows: "A derivative is a financial contract whose value depends on that of an underlying asset or index".

It also specifies that "derivative transactions include interest rate contracts, foreign exchange contracts, property title contracts, commodity contracts and options contracts".

The most common derivatives used to hedge interest rate risk are as follows:

  • Cap, floors, collars;
  • Swaps;
  • Options;
  • Futures;
  • Forwards.

Last modified 6 Jan 2020

Netherlands

Netherlands

The following derivatives are common types in the Netherlands:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps);
  • options (call options and put options); and
  • warrants.

Last modified 6 Dec 2019

New Zealand

New Zealand

Derivatives contracts are entered into in New Zealand for a range of reasons including hedging, trading and speculation.

The four most common types of derivatives are futures, forwards, options (call options and put options) and swaps (such as interest rate or currency swaps).

These are either privately traded over-the-counter derivatives or exchange-traded derivatives.

The value of the derivatives contracts is based on the value of the underlying assets. The main classes of underlying asset seen in the New Zealand are:

  • equity;
  • fixed income instruments;
  • commodities;
  • foreign currency; and
  • credit events.

Last modified 13 Dec 2019

Norway

Norway

Common types of derivatives include options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, or other derivative instruments, financial indices or financial measures which may be settled physically or in cash, commodity derivatives, credit derivatives and financial contracts for differences.

Last modified 20 Oct 2017

Peru

Peru

Derivative contracts are executed in Peru for a range of reasons including hedging, trading and speculation.

All of the main types of derivative contracts are widely used in Peru:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets.

The main classes of underlying assets seen in Peru are:

  • equity;
  • fixed income instruments;
  • commodities;
  • foreign exchange; and
  • credit events.

Last modified 5 Dec 2019 | Authored by DLA Piper Pizarro Botto Escobar

Poland

Poland

Derivatives contracts are entered into in Poland for various reasons, including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.

The main types of derivatives contracts are:

  • forwards;
  • futures;
  • swaps; and
  • options (call options and put options).

The Polish market for financial derivatives, although still fairly young, is high on the list of European markets. This is mainly due to the turnover on futures contracts, the most important derivative instrument listed on the Warsaw Stock Exchange, on the WIG 20 index.

Globally, the biggest influence on the financial market is attributed to instruments related to interest rates, which account for around 85% of the overall turnover. In Poland, this market is still very small and undeveloped. The largest turnover is generated on the over-the-counter (OTC) market in forward rate agreements and swaps.

Individual investors are not interested in speculation related to interest rates, and institutional investors conduct transactions on the OTC market. The situation is similar with respect to the currency derivatives market, where transactions, most commonly futures and options, are based on Polish currency.

Last modified 6 Dec 2019

Portugal

Portugal

The main types of derivatives traded in Portugal are:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps);
  • options (call options and put options);
  • credit derivatives;
  • contracts for differences; and
  • caps, floors and collars.

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in Portugal are:

  • transferable securities;
  • monetary instruments (eg savings certificates, commercial paper and cash bonds);
  • interest rates (eg Euribor, Libor, Ester – applicable in 2020);
  • foreign currency (eg euro/dollar and dollar/yen);
  • financial ratios (eg PSI 20 and S&P 500);
  • economic factors (eg inflation rates, unemployment rates and national product); and
  • other derivatives.

Last modified 6 Dec 2019

Puerto Rico

Puerto Rico

The derivative market in Puerto Rico is very limited and are generally traded over-the-counter.

The following types of derivative contract are used in Puerto Rico:

  • forwards;
  • futures;
  • strips (interests only strips and principal only strips);
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets.

Last modified 11 Dec 2019

Romania

Romania

Derivative contracts are entered into in Romania for a range of reasons including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.
All of the main types of derivative contracts are used in Romania:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying assets seen in Romania are:

  • equity;
  • indices;
  • commodities; and
  • foreign currency.

Last modified 20 Oct 2017

Russia

Russia

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contract are used in Russia:

  • forwards;
  • futures (most wide-spread and popular);
  • swaps; and
  • options (call options and put options).

The value of the derivative contract is based on the value of the underlying assets which, among others, may be:

  • securities;
  • commodities;
  • foreign currency;
  • interest rates;
  • inflation rate; or
  • credit events.

Last modified 5 Dec 2019

Senegal

Senegal

The main types of derivatives are:

  • futures,
  • forwards,
  • options,
  • swaps.

The value of the derivatives is derived from the value of an underlying asset or group of assets, the main classes of which are:

  • Assets: commodities, shares or bonds;
  • Interest rates, exchange rates, or indices;
  • Foreign currencies.

Last modified 29 Jul 2020

Singapore

Singapore

Derivative contracts are entered into in Singapore for a range of reasons including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange. Exchange traded derivatives are also subject to rules under the Singapore Exchange Derivatives Trading Limited.

All of the main types of derivative contract are widely used in Singapore:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in Singapore are:

  • equity;
  • fixed income instruments;
  • commodities;
  • foreign currency; and
  • credit events.

Last modified 20 Oct 2017

Slovak Republic

Slovak Republic

Pursuant to the Act on Securities and Investment Services, all of the following main types of derivative contracts are recognized under Slovak law:

  • forwards;
  • futures;
  • swaps; and
  • options.

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying assets in Slovakia are:

  • securities;
  • interest rates;
  • exchange rate indices of funds held in euros or a foreign currency;
  • securities contracts; and
  • commodities.

Last modified 6 Dec 2019

South Africa

South Africa

South Africa has a robust derivative market, which makes up approximately 7.5% of GDP, and as such uses all the main types of derivatives contracts, including:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

Banks are the primary traders of derivatives in South Africa and as a result the most commonly traded derivatives are:

  • interest rate derivatives (swaps), which make up 85% of the derivative transactions traded in the South African domestic market; and
  • foreign exchange derivatives (currency swaps), which make up approximately 12% of South Africa's derivative trading.

Commodity and Agricultural derivative contracts (futures and options) are also traded extensively in the South Africa.

Last modified 5 Dec 2019

Spain

Spain

Derivative contracts are entered into in Spain for a range of reasons including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contract are widely used in Spain:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in Spain are:

  • interest rates;
  • equity;
  • fixed income instruments;
  • commodities;
  • foreign currency; and
  • credit events.

Last modified 5 Dec 2019

Sweden

Sweden

Derivative contracts are entered into in Sweden for a range of reasons including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contracts are used in Sweden:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in Sweden are:

  • equity;
  • fixed income instruments;
  • commodities;
  • foreign currency; and
  • credit events.

Last modified 22 Jan 2020

Thailand

Thailand

Common types of derivatives traded in Thailand include:

  • forwards, being contracts in which one party is obliged to deliver goods as specified in the contract to the other party at a given time in the future, and the other party, in turn, is obliged to make payment for such goods at a price specified therein;
  • futures, being contracts in which one party is obliged to make payment to the other party, or vice versa, in the amount which is equivalent to the difference between the price or value of goods or other variable specified in the contract and the price or value of such goods or variable prevailing at a given time or period of time in the future as specified in the contract; and
  • swaps and options, being contracts in which one party is entitled to demand the other party delivers goods, or makes payment for goods, or makes payment in the amount which is equivalent to the difference between the price or value of goods or variable specified in the contract and the price or value of such goods or variable prevailing at a given time or period of time in the future as specified in the contract, or to demand the other party enters into any of the contracts described above.

Derivatives may be traded over-the-counter or on an organized exchange, being the Thailand Futures Exchange (TFEX).

Permitted underlying assets in respect of which futures and options may be traded on the TFEX include:

  • equities – stock indexes and individual stocks;
  • debt instruments – bonds and interest rates;
  • commodities – precious metals, base metals and energy; and
  • other indexes – exchange rates, commodity indexes and others as may be announced by the Securities and Exchange Commission.

Currently, products available in Thailand include SET50 Index Futures, SET50 Index Options, Single Stock Futures, Gold Futures, Interest Rate Futures, USD Futures and Sector Index Futures.

The Bank of Thailand also regulates and supervises certain types of over-the-counter financial derivatives conducted by financial institutions.

Last modified 4 Apr 2020

Ukraine

Ukraine

Derivatives may be traded over-the-counter or on an organized exchange.

The most common types of underlying assets seen in Ukraine are commodities and foreign currencies.

As other types of assets, including equity, credit events and fixed income instruments, are less developed in Ukraine, Ukrainian counterparties tend to document these transactions via offshore entities and subject to foreign law.

Last modified 24 Jan 2020

UK - England and Wales

UK - England and Wales

The UK accounts for about half of the $640 trillion over-the-counter market derivatives market.

Derivative contracts are entered into in the UK for a range of reasons including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contract are widely used in the UK:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in the UK are:

  • equity;
  • fixed income instruments;
  • commodities;
  • interest rates;
  • foreign currency; and
  • credit events.

Last modified 6 Dec 2019

UK - Scotland

UK - Scotland

The UK accounts for about half of the $600 trillion over-the-counter market derivatives market.

Derivative contracts are entered into in the UK for a range of reasons including hedging, trading and speculation.

Derivatives may be traded over-the-counter or on an organized exchange.

All of the main types of derivative contract are widely used in the UK:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

The value of the derivative contracts is based on the value of the underlying assets. The main classes of underlying asset seen in the UK are:

  • equity;
  • fixed income instruments;
  • commodities;
  • foreign currency; and
  • credit events.

Last modified 20 Oct 2017

United Arab Emirates

United Arab Emirates

Although a variety of derivatives structures exist in the UAE, so far, the only relevant court decisions relate to foreign exchange contracts.

The new Netting Law contemplates a number of qualified financial contracts as well Shariah compliant contracts: murabaha, musawamah, master collateralized murabaha, restricted and unrestricted wakala, alternative profit rate swap, alternative cross-currency swap and alternative foreign exchange forward are all mentioned.

Last modified 23 Jan 2020

United States

United States

All of the main types of derivative contract are widely used in the US:

  • forwards;
  • futures;
  • swaps (such as interest rate or currency swaps); and
  • options (call options and put options).

Products may be 'over-the-counter' (OTC) or exchange traded and entered into for hedging or as part of a trading strategy.

The transactions types that we see most often relate to interest rate or currency hedging such as FX forwards, interest swaps or interest rate caps. The needs of the relevant entity drive the underlying type of hedging. A power company client may have commodity hedging needs whereas a manufacturer may be concerned only with hedging the interest rate on its debt.

Common products that we see are commodity derivatives, equity derivatives, interest rate derivatives, currency derivatives, credit derivatives and insurance-linked derivatives.

Last modified 24 Jan 2020

Are there any restrictions on issuing debt securities?

No.

What are common issuing methods and types of debt securities?

The most common type of debt securities in Angola is the issuance of commercial paper. Commercial paper is debt securities with a maturity of one year or less. Commercial companies, public companies, civil companies in commercial form and other legal persons governed by public or private law may issue commercial paper.

Among other requirements, the issue of commercial paper requires prior legal certification of accounts or auditing by an auditor registered with the Capital Market Commission (CMC).

What are the differences between offering debt securities to institutional / professional or other investors?

  • Agreements for investment services concluded with non-institutional investors shall be in writing and only such investors may invoke invalidity resulting from failure to comply with the form.
  • In intermediation agreements signed with non-institutional investors for the execution of operations in Angola, the possible application of foreign law may not have the consequence of depriving the investor of the protection ensured by the Angolan Securities Code provisions on information, conflict of interest and asset segregation.
  • Brokers must establish, in writing, an internal policy that allows them, always, to know the nature of each client, as a non-institutional or institutional investor, and to adopt the necessary procedures for its implementation.
  • The Broker's information duties to non-institutional investors are far more extensive than to institutional investors.

Assessment of the Adequate Character of the Operation:

In the case of non-institutional investors, the broker must ask the client for information regarding their knowledge and investment experience with regard to the type of security and derivative instrument or the service considered, to enable them to assess whether the client understands the risks involved.

If the broker considers that the transaction under consideration is not suitable for that client, they should advise the client in writing.

In the case of institutional investors, the broker may assume that, in respect of securities and derivatives, operations and investment services, the client has the necessary level of experience and knowledge to assess the appropriateness of the operation.

  • Public Offers:

An offer addressed to at least 150 people who are non-institutional investors resident or established in Angola is qualified as public.

When is it necessary to prepare a prospectus?

The general rule is that any public offer of securities must be preceded by the disclosure of a prospectus.

The exceptions to this rule are:

  • public offers of securities to be awarded, on the occasion of a merger, to at least 150 shareholders other than institutional investors, provided that a document containing information considered by the CMC to be equivalent to that of a prospectus is available at least 15 days before the date of the General Meeting;
  • the payment of dividends in the form of shares of the same class as the shares in respect of which the dividends are paid, provided that a document is available containing information on the number and nature of the shares and the reasons for and details of the offer;
  • public offers for distribution of securities to existing or former directors or employees by their employer where the employer has securities admitted to trading on a regulated market or by a company controlled by it, provided that a document is available containing information on the number and nature of the securities and the reasons for and details of the offer; and
  • public offers for sale of securities admitted to trading on a regulated market, provided that the admission prospectus is up to date.

What are the main exchanges available?

BODIVA – Angolan Debt and Stock Exchange

Is there a private placement market?

No.

Are there any other notable risks or issues around issuing or investing in debt securities?

No.

Are there any restrictions on establishing a fund?

No.

What are common fund structures?

Securities investment funds

Real Estate investment funds

Venture Capital investment funds

What are the differences between offering fund securities to professional / institutional or other investors?

Investment funds may be set up exclusively for institutional investors. In that case the Fund rules shall be explicit about the exclusive participation of institutional investors. A Fund intended exclusively for institutional investors may establish different rules compared to other funds, in particular establishing different time limits for ascertaining the value of the unit and payment of redemption, charge a management fee on the basis of the results of the Fund or dispense with the preparation of a half-yearly report.

Are there any other notable risks or issues around establishing and investing in funds?

No.

Are there any restrictions on marketing a fund?

The establishment of an investment fund is subject to prior authorization by the CMC.

Authorization requires approval by the CMC of the incorporation documents, the choice of depositary and the management entity's request to manage the Fund.

Are there any restrictions on managing a fund?

The management of Investment Funds may only be exercised by fund management entities empowered by law and registered with the CMC.

Fund management entities must maintain their business organization equipped with the human, material and technical resources necessary to provide their services under appropriate conditions of quality, professionalism and efficiency, in order to avoid wrong procedures.

Real Estate Fund Management entities must also maintain a technical department qualified to provide real estate project analysis and monitoring services or to contract such services externally.

Are there any restrictions on entering into derivatives contracts?

No.

What are common types of derivatives?

  • Swaps
  • Options
  • Futures

Are there any other notable risks or issues around entering into derivatives contracts?

No.

Luís Filipe Carvalho

Luís Filipe Carvalho

Partner
DLA Piper Africa, Angola (ADCA)
[email protected]
T +244 926 612 525
View bio

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