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Lawrence B. Patent

Of Counsel
+1.202.778.9219
Fax +1.202.778.9100
Mr. Patent regularly counsels businesses regarding compliance with the legal requirements governing commodity interest transactions, including over-the-counter (“OTC”) derivatives and exchange-traded futures and swaps, covering U.S. and international markets. His clients include, among others, hedge funds, currency dealers, commodity pool operators (“CPOs”), commodity trading advisors (“CTAs”), institutional investors, investment advisers, trade associations, energy companies, agricultural producers, swap dealers, and introducing brokers.

Mr. Patent services diverse client needs, providing advice regarding the registration, disclosure, and other regulatory requirements of the Commodity Futures Trading Commission (“CFTC”) and National Futures Association (“NFA”), preparing internal compliance procedures and policies for registered entities and trading operations, responding to requests for time-sensitive legal advice concerning particular market positions and strategies, and conducting compliance training. Mr. Patent has been very active in all phases of the financial reform (“Dodd-Frank”) process, including both the legislative and regulatory aspects. Mr. Patent has been recognized since 2013 as a leading lawyer for his work in the practice area of Derivatives and Futures Law by The Best Lawyers in America®.

Mr. Patent joined K&L Gates in 2008 after serving more than thirty years as an attorney with the CFTC, the last five as a Deputy Division Director.

Professional Background

Prior to joining K&L Gates, Mr. Patent served as deputy director of the Division of Clearing and Intermediary Oversight (now the Division of Swap Dealer and Intermediary Oversight) at the CFTC. Mr. Patent worked at the CFTC in various capacities for more than 30 years. He was the principal drafter of many CFTC regulations regarding intermediaries, including the original regulations governing introducing brokers in 1983 and the last major general reform of intermediary regulation in 2000, and he supervised the preparation of or drafted many important CFTC staff interpretive letters. He represented the CFTC in its dealings with other regulators, particularly the Securities and Exchange Commission (“SEC”), on issues relating to intermediaries, and is quite familiar with relevant regulations of the SEC and the Financial Industry Regulatory Authority (“FINRA”). Mr. Patent was the original Chair of the Registration Working Group, which is composed of CFTC and NFA staff and meets several times a year to discuss issues relating to registration of intermediaries. Mr. Patent also worked with various international regulatory bodies in connection with review of their regulatory frameworks.

Professional/Civic Activities

  • Member, Bloomberg SEF LLC Disciplinary/Appeals Panel

  • Little League Coach in Challenger Division, Arlington, Virginia

Speaking Engagements

  • Panelist, ”Cryptocurrencies and Related Investment Products,” 2018 DC Investment Management Conference (November 8, 2018)
  • Panelist, ”FinTech and Cryptocurrencies,” 2017 DC Investment Management Conference (November 2, 2017)
  • Speaker, Investment Adviser Association (“IAA”) and K&L Gates “Hot Topics in CPO and CTA Regulation and Compliance,” via webinar, May 2, 2017
  • Panelist and Team Leader, “Compliance Rapid Fire,” Futures Industry Association Law and Compliance Division Annual Conference, June 2015
  • Panelist, “Compliance Issues for National Futures Association (NFA) Members,” Investment Advisor Association Webinar, April 3, 2013
  • Panelist, “‘Who, What and Where?’ – Product and Entity Definitions,” Futures Industry Association Law and Compliance Division Annual Conference, May 2012
  • Panelist, “Ethics with Respect to Derivatives and Futures,” American Bar Association Business Law Section, Derivatives & Futures Law Committee Winter Meeting, February 2011
  • Panelist, “New Regulation of Derivatives Under Financial Regulatory Reform Legislation,” Women in Housing and Finance Securities Task Force, October 2010
  • Panelist, “Soup to Nuts (Part 1 & Part 2),” Futures Industry Association Law and Compliance Division Annual Conference, April 2010.
  • Panelist, “The Regulation of OTC Derivatives, Swaps Dealers and MSPs,” Futures Industry Association Law and Compliance Division Annual Conference, April 2010.
  • Contributor, “Private Investment Fund Investment in Cleantech, Alternative Energy, and Carbon Products: Legal and Regulatory Considerations,” in Energy and Environmental Project Finance Law and Taxation, Oxford University Press, 2010.
  • Advised several clients, including Amazon Web Services, Nike and T-Mobile, regarding virtual power purchase agreements (“VPPAs”), particularly with respect to compliance with Dodd-Frank and regulations promulgated thereunder
  • Represented the Motion Picture Association of America (“MPAA””) as well as various movie industry craft unions in opposing futures contracts based upon motion picture box office receipts, and developed a statutory provision banning such contracts
  • Provided Opinion of Counsel to NZX, New Zealand’s futures exchange, on the treatment of customer funds by U.S. futures commission merchants for trades on NZX; this led to a further engagement regarding the application of U.S. law to a related entity, Smartshares
  • Assisted The Church Alliance in obtaining recognition under CFTC regulations adopted under Dodd-Frank that “church plans,” i.e., employee benefit plans for workers at religious institutions, could “opt in” to being classified as “Special Entities” under business conduct regulations applicable to swap dealers
  • Review and monitor proposed regulations that would further define the term “swap dealer” on behalf of Peabody Energy, which involved drafting a formal comment letter on the proposed regulations and setting up and participating in meetings with staff and Commissioners of the CFTC, as well as researching the treatment of “market makers” under the Commodity Exchange Act
  • Co-Counsel on an amicus brief representing the Futures Industry Association regarding the treatment of customer funds in a bankruptcy, which resulted in the 7th Circuit reversing the district court as requested
  • Consultation and advice to numerous clients regarding amendments to CFTC regulations rescinding or modifying exemptions from registration as a CPO or CTA