Legal Framework Of Structured (Hybrid) Financial Instruments

The current economic environment, in particular low interest rates on deposits and the collapse of the securities market, will create a demand by both institutional and retail investors for potentially profitable instruments, at least above inflation and the average rate of bank deposit, if the investor agrees to take risks. On the other hand, organizations (hereinafter despite the form of the financial instrument - issuer) will be forced to find affordable and accessible ways to fund ongoing activities. A possible response to these economic needs could be structural (hybrid) financial instruments. This work is the first systematic study in Russia of the legal regime of structural financial instruments as a separate category of financial engineering. The first chapter seeks to understand structural (hybrid) financial instruments as an economic and financial category. The identification of the substantive characteristics of the explored financial instrument will determine the required extent of legal regulation of structural financial instruments. Based on the findings of the first chapter, chapter two examines structural financial instruments from a legal perspective. In the light of current Russian legislation, consideration is being given to the legal form in which structural financial instruments may be offered. An analysis of the advantages and limitations of existing legal forms, including those provided for by the foreign legal framework (United States and Spain), has made it possible to identify the legal factors hindering the growth of the Russian market for structural financial instruments, and to formulate criteria for the characterization of a contract or security as a structural financial instrument. The key actors in the legal relationships being considered in this work are organizations that create structural financial instruments - issuers - and investors. Equally important are the various intermediaries that facilitate the issuance and circulation of structural financial instruments.