Law firm of the year: Simmons & Simmons

Risk Awards 2026: Swiss-army-knife law firm aids clients in areas ranging from carbon credits to synthetic risk transfer to crypto

Craig Bisson, Simmons & Simmons

Simmons & Simmons

It’s becoming commonplace for law firms to focus their energy on one part of the derivatives universe, picking up the reputation of being a sell-side or buy-side law firm. Simmons & Simmons doesn’t want either of the exclusive labels.

Instead, its practice has been solving some of the thorniest legal dilemmas for clients of all stripes in jurisdictions across the globe.

In France, the firm helped parties unlock a new form of collateral. In Singapore, it acted on a synthetic risk transfer deal that provided capital relief in two jurisdictions. And in the United Arab Emirates, it laid the legal groundwork for businesses to launch in the burgeoning crypto market.

“There are other law firms in the UK and globally who have pivoted particularly to the sell side,” says Craig Bisson, a partner at Simmons. “We have a broadly balanced international cross-border structure that covers both sides deeply and fully.”

Stressed markets bring elevated collateral demands for the financial sector. When prices of derivatives swing wildly, firms are squeezed of their collateral reserves and many rush to secure the same kind of assets to meet further demands.

Regulators have become anxious of the problem. The Financial Stability Board recommended derivatives counterparties diversify their collateral pools in a report published last year following its analysis of several liquidity squeezes.

The clients have been grateful, and they’ve given us further mandates on this

Astrig Bourmayan, Simmons & Simmons

Carbon credits provide an alternative form of collateral to the existing universe of cash, bonds and shares. The EU’s emissions trading scheme has become a mature market for the buying and selling of allowances, with investors able to rely on quickly converting these holdings into cash.

In France, however, a peculiarity in local laws means carbon credits are not classed as financial instruments but movable assets. Astrig Bourmayan, a partner at Simmons, says the distinction prevents domestic firms from relying on standard structures for receiving collateral, such as providing security of rights on a pledge.

Furthermore, the EU’s emissions allowance system has a yearly return system, whereby companies must give up their allowances to cover their verified emissions from the previous year.

These legal snags would militate against deals with a maturity of five or 10 years, says Bourmayan. Counterparties would need to arrange for the return of old carbon credits and their replacement with new ones if they were taking security directly over the credits.

Simmons has found a neat workaround by advising clients to take security over the balance of accounts where carbon credits are held instead. These accounts are with national administrators, which in France is the Caisse des Dépôts et Consignations (CDC). Under French law, Bourmayan says the rights over the balance of an account are classified as collateral receivable, allowing the balance to be pledged. This mechanism enables companies to replace EU allowances they use to cover their emissions.

Yet the collateral, while valid, is not enforceable for the taker. To overcome this hitch, Simmons came up with the idea that counterparties receiving the collateral can be made authorised persons in charge of the account holding the credits at the CDC.

“The authorised person could be the pledgee, for example, if the pledgor is happy with that,” says Bourmayan. “In which case, if you were to enforce [your rights], the CDC will not get involved into the enforcement itself.” Rather, the CDC will enforce the instructions of the authorised person, she says.

The aim is to help financial institutions in France to diversify the liquid assets they hold to meet collateral demands.

“It was very innovative,” says Bourmayan. “The clients have been grateful, and they’ve given us further mandates on this.”

First SRT in the Lion City

With regulators having ramped up the capital requirements banks face from their activities following the 2008 financial crisis, lenders are increasingly using a tool that transfers the risk of losses from banks to investors. There are various ways synthetic risk transfer (SRT) can be facilitated, including through credit default swaps referencing an underlying portfolio, financial guarantees or credit-linked notes.

Parties on both sides of these transactions praised the law firm for its diligence and expertise – valued qualities in a market still experimenting with new ways to apply the technology to different parts of banks’ books.

Simmons aided Dutch pensions giant PGGM in an SRT involving two interlinked credit default swaps on trade finance loans that Standard Chartered extended to clients across Asia, the Middle East and Africa.

Although the same structure had been carried out in Hong Kong between Standard Chartered and PGGM two years previously, David Toole, a partner at Simmons, says the significance of the Singaporean deal is the country “has not traditionally been a big SRT jurisdiction”.

With no bank having issued an SRT in the Lion City before, Toole says engagement “takes longer” with the regulator to guarantee a deal results in capital relief for the issuing bank.

For us, that has to be Simmons. Some law firms will just say a structure is tricky without taking a clear view on whether it works. Simmons will take a view

In-house lawyer at an SRT issuer

“We were acting on the investor side, so we were one step removed from the direct discussions but obviously helped facilitate that in terms of flexibility in structuring the transaction,” says Toole.

Simmons had to ensure the structure didn’t introduce additional risks for PGGM. The intention of the two swaps was to provide capital relief for Standard Chartered’s group-wide requirements applied to its headquarters in the UK as well as its Singaporean subsidiary’s requirements.

“It’s making sure that continues to be the case, that you’re protecting a single portfolio, notwithstanding the capital relief in two jurisdictions,” says Toole. “It is a more complex structure, but shouldn’t on the face of it create additional risks for an investor.”

The deal, known as Shangren VII, allowed both the UK and Singaporean entities of StanChart to purchase funded first loss protection on 0%–7.5% losses on a $1.5 billion trade finance portfolio with a range of borrowers. The Shangren special-purpose vehicle issued $112.5 million in credit-linked notes to PGGM.

More recently, dealers are turning to SRTs to pass on the risk from their derivatives counterparties. These are typically more complex beasts than SRTs on loans due to exposures fluctuating according to moves in the prices of underlying assets, whereas the exposure on loans is determined only by the amount borrowers need to repay. An unfavourable market move against a defaulting counterparty can lead to a larger loss filtering through the SRT to the investor.

“The credit default swap market was set up to move bond and loan risk rather than derivatives counterparty credit risk, so the documentation requires both a high level of technical ability and a very practical approach,” says an in-house lawyer at an SRT issuer. “For us, that has to be Simmons. Some law firms will just say a structure is tricky without taking a clear view on whether it works. Simmons will take a view.”

One area that has seen more interest in recent years is an arrangement whereby an extra trigger is added to the three usual ones for a credit default swap payout. This fourth trigger prompts a payout if a counterparty defaults on a derivatives trade.

Marcin Perzanowski, a partner at Simmons, says the firm has been involved in “four to five” of these transactions in the past year.

Confidentiality is a main consideration for SRT on derivatives, Perzanowski says. The basic legal template for many over-the-counter derivatives is the Isda master agreement. When SRT counterparties transfer risk in relation to a master agreement, they need to know how much information they are able to disclose.

Another issue concerns the nature of the credit default swap contract. “If you’re selling protection, then you have to think, is that a contract of insurance? How do you make sure that it could not be characterised as a licensable activity?” says Perzanowski.

Life thrives in the crypto desert

Simmons has also been active in the United Arab Emirates to support the flourishing digital asset sector, by crafting the vital documentation underpinning these new services.

One client, a crypto firm, needed a legal opinion showing the enforceability of derivatives terms for collateral, in order to satisfy a regulatory pre-condition for the sale of crypto derivatives to institutional investors.

Typically, collateral and netting opinions issued by Isda offer legal certainty by setting out the circumstances in which the terms of a master agreement are enforceable. However, existing opinions only cover a small number of digital assets that derivatives could be linked to.

“The coverage of Isda netting opinions for digital assets is very limited – it’s basically bitcoin and ether, and all cash-settled,” says an in-house lawyer at a digital assets company, a client of Simmons. “If you want a legal opinion to give you comfort on other trades, you need a law firm capable of that.”

Oliver Ward, a managing associate at Simmons, says the firm drafted a ‘top-up’ opinion allowing the physical exchange of crypto assets as collateral, “most likely stablecoins”. This required delving into the existing opinions and analysing how the legal issues considered in those would apply in the context of derivatives resting upon crypto assets. Ward says the original industry opinion runs to “150-odd” pages.

“That was needed for their business in the Middle East looking to expand their derivatives offering,” says Ward.

The law firm has also helped establish documents allowing a crypto infrastructure provider to offer a platform to safeguard margin being exchanged between parties. The platform holds collateral posted to it on behalf of payers and receivers.

The documents Simmons prepared set out the terms that accounts are maintained by the platform provider on behalf of participants, as well as settlement procedures, eligibility criteria and termination rights.

The infrastructure provider wanted to allow the use of tokenised money market funds as a settlement asset. The instrument falls into a legal grey area between the traditional and digital asset world. A holder’s rights are recorded on both a shareholder register and represented in the form of a cryptographic token on a blockchain. Ward says the characterisation of these tokens needed careful consideration as it can have important implications on the nature and enforceability of any security interests.