Carl A. Royal

Of Counsel

Carl A. Royal emphasizes his practice on derivatives and the regulation of markets and market participants under federal securities and commodities laws.

He has represented derivatives dealers and end-users in a wide range of derivatives transactions, from interest rate swaps, to variable prepaid stock purchase agreements with caps and floors. He is familiar with both exchange-traded derivatives (futures and options) and with International Swaps and Derivatives Association, Inc. (ISDA) documentation used for privately negotiated swap transactions.

Mr. Royal formerly was Senior Vice President and General Counsel with the Chicago Mercantile Exchange (CME), the second largest futures exchange in the world. He has extensive national and international experience with respect to commodities, futures, and securities market products, services, and regulatory compliance. This includes:

• Negotiating significant transactions
• Implementing strategic plans
• Obtaining regulatory approvals for new products and systems
• Drafting and amending rules
• Advising boards of directors and senior management

In addition to the CME, Mr. Royal's representations have included:

• National securities exchanges
• Banks
• Clearing organizations
• Broker-dealers
• Investment advisers
• Futures commission merchants

He also has broad experience in corporate and securities law.

Experience

In his role at CME, Mr. Royal:

• Obtained international regulatory approvals to place GLOBEX® terminals in France, Hong Kong, Germany, Japan, Singapore, and the United Kingdom.
• Negotiated an agreement with Reuters to provide software and network for the original GLOBEX electronic trading system. Prepared and obtained Commodity Futures Trading Commission (CFTC) approval for GLOBEX rules governing access, trading, and resolution of errors.
• Negotiated agreements and regulatory plans with LIFFE and MATIF (futures exchanges in London and Paris) to allow CME members to trade futures on electronic systems offered by those exchanges and to allow their members to trade futures listed on GLOBEX.
• Created and obtained regulatory approval for GFX Corporation, a 100%-owned subsidiary of CME, which makes markets in CME currency futures contracts on GLOBEX.
• Negotiated surveillance information-sharing agreement with the Tokyo Stock Exchange to allow CME to trade futures on the Nikkei 225 stock index.
• Supervised agreements, rules and regulatory approval for cross-margining of futures accounts at the CME Clearing House and securities options accounts at The Options Clearing Corporation when the accounts hold offsetting positions.
• Developed rules for an options pledge program that allowed trading firms to use their options positions as collateral, thus freeing up their capital for other uses.
• Obtained favorable interpretation of margin regulations from Federal Reserve Board that allowed options market-makers to qualify for "exempt credit" when hedging their options positions with the underlying stocks.
• Obtained regulatory approval for the CME's plan to demutualize and convert from an Illinois nonprofit membership corporation to a for-profit Delaware corporation.

Publications

"Broker-Dealer Compliance Issues for Security Futures," Wall Street Lawyer (January 2003)

 

"New Legislation Creates Exemption for B2B Markets," @MARKETS (2001)

 

"Best Execution, Competition and Payment for Order Flow," Futures & Derivatives Law Report (2000)

 

"Automated Trading of Futures and Options," Review of Securities and Commodities Regulation (1988)

 

Speeches and Presentations

"OTC Derivatives," (Panelist) 28th Annual FIA Law & Compliance Division Workshop, Baltimore, Md. (May 12, 2006)

 

"Swaps and OTC Derivatives," CBA Futures and Derivatives Law Seminar, Chicago (Feb. 20, 2003)

 

"Regulation of Cross-Border Access to Fugures Exchanges," ABA Committee on Futures and Derivative Instruments, Winter Meeting, Key West, Fla. (Feb. 8, 2003)

 

"Exchange Issues with Single-Stock Futures," (Panelist) 23rd Annual FIA Law & Compliance Division Workshop, Baltimore, Md. (May 10, 2001)

 

"Regulatory Issues Associated with Electronic Trading," CBA Futures and Derivatives Law Seminar, Chicago (Feb. 23, 1999)

 

Pro Bono Activities

Mr. Royal is a volunteer attorney for the Pro Bono Center for Disability and Elder Law.

Awards and Honors

Leading Lawyer — Corporate Finance Law; Securities and Venture Finance Law, Illinois Leading Lawyers Network

Best Lawyers in America, Derivatives

Education

Professional Memberships

American Bar Association
Section of Business Law
       Committee on Regulation of Futures and Derivative Instruments

Chicago Bar Association
Futures and Derivatives Law Committee
       Past Chair