Lee & Ko is a member of the ISDA and is keenly aware of the latest developments in the global and domestic derivatives markets. We regularly consult with the ISDA on the development of derivatives regulations in Korea to prepare ourselves for new regulatory challenges.

Pursuant to the enactment of the Financial Investment Services and Capital Markets Act, the derivatives market in Korea is becoming increasingly diverse and specialized. In light of this trend, clients are more than ever looking to the derivatives specialists at Lee & Ko to provide legal advice and assistance on all aspects of derivative transaction, such as (i) structuring derivative products, (ii) evaluating the legality of such products and advising on possible compliance solutions, (iii) analyzing relevant laws and regulations, (iv) preparing definitive documentation for derivatives transactions and (v) obtaining regulatory approvals.

Lee & Ko has represented clients in high-profile legal proceedings involving derivative transactions. A team of Lee & Ko litigators and derivative specialists recently won, on behalf of major Korean financial institutions, the first major ruling in the litigation involving “knock-in, knock-out” currency derivatives (KIKO). During the recent global financial crisis, Lee & Ko had the privilege of representing the Korean government in its bilateral currency swap arrangements with each of the U.S., China and Japan and its participation in the Chaing Mai Initiative (multilateral currency swap arrangement among ASEAN+3 nations), which stabilized the Korean financial market.

Major Cases

Acting as defense counsel in obtaining not-guilty verdict for client defending against ELW related scalping charges
Commissioned by the Korea Securities Dealers Association and the Korea Federation of Banks to draft standard form derivatives documentation in Korean for the Korea Options, Swaps & Derivatives Association and the Korea Federation of Banks
Drafting agreements for and evaluating the legality of credit-linked notes (CLN), credit-default swaps (CDS), derivative-linked securities (DLS), equity-linked notes (ELS) and equity-linked warrants (ELW) on behalf of numerous domestic and foreign financial institutions and insurance companies
Counsel to the Bank of Korea and the Ministry of Strategy and Finance on drafting the Chang Mai Initiative multilateral currency swap agreement for ASEAN plus Korea, China and Japan
Counsel to the Bank of Korea in its bilateral currency swaps with financial authorities of other Asian countries (Japan, China and others) and the U.S. Federal Reserve Bank
Counsel to various local financial institutions and non-financial companies in connection with the termination of their derivative transactions with Lehman Brothers and its affiliates
Counsel to major Korean banks in litigations concerning KIKO transactions
Counsel to fund investors in litigations concerning FX (foreign exchange) forward contracts.
Advice on repurchase (repo) transactions
Advice on bankruptcy law issues concerning derivative transactions
Advice on disputes concerning total return swaps (TRS) marketed by JP Morgan (Hana Bank, SK Securities and others)
Advice on the formation of a joint corporation specially designed for dealing in derivatives
Advice on preliminary attachment procedures and related issues in connection with the Daewoo Engineering & Construction CLN
Advice on pseudo-forward contracts