Feature

Floating charges again

Far too much ink has been spilled attempting to distinguish between fixed and floating charges, so I will keep this brief. It was prompted by reading Sarah Worthington’s article in this journal last year (‘Fixed and floating charges: still favouring absolutism over multi-factored nuance’ (2023) 9 JIBFL 583). My purpose is twofold: to argue that distinguishing between fixed and floating charges is both conceptually impossible and commercially pointless; and then to suggest how the law might be reformed.

Russia’s quest for financial independence through the use of digital assets, cryptocurrencies and digital currencies

The Russian Central Bank and its regulatory bodies, which were historically against all things crypto, took a co-ordinated U-turn shortly after Russia's invasion of Ukraine in Feburary 2022 and the imposition of unprecedented sanctions by the West - because they realised that cryptocurrencies and digital assets can be used the evade sanctions. Having been subject to widespread sanctions for over two years and effectively cut off from the international payment system (SWIFT), and largely shut out of Western's bank and bank accounts, Russia is trying to adjust the "new order" and its international isolation - both economically and financially. It is finding new ways to receive monies from the West for its raw materials and to trade independently of Westen banks  and the US dollar, so that it can transact with both friendly and not so friendly countries on the premise that West cannot  trace those transactions.

The FSB’s Consultation on Liquidity Preparedness for Margin and Collateral Calls: is it all about liquidity?

The FSB consultation report on Liquidity Preparedness for Margin and Collateral Calls (https://www.fsb.org/2024/04/liquidity-preparedness-for-margin-and-collateral-calls-consultation-report/), responded to a number of high-profile loss-making transactions by various banks involved in lending against collateral comprised of large positions in single listed stocks. Recently, the most talked-about debacle was that of  Archegos Capital Management (Archegos), the family office of Bill Hwang with total assets reported at around $36bn. In a nutshell, the prices of several stock positions held by Archegos dropped  for different reasons and it could not post enough cash collateral, so some of the lending banks had to liquidatethe collateral shares. Some banks managed to exit their positions quickly, but other chose not to, and suffered substantial losses. 

This article provides a detailed overview of the issues involved in such large transactions and highlights the key procedural requirements and potential regulatory developments needed. 

Judicial review in the financial services sector: a question of risk and reward

Successful judicial review challenges are rare – those in the financial services sector perhaps particularly so. Does the rarity of successful challenges explain why financial institutions may overlook their public law rights when engaging with regulators? This article explores recent examples of judicial review in the financial services sector, the risks involved for financial institutions in bringing such claims, and key considerations for those wishing to exercise their public law rights.

Leading the charge (pun intended): international security transactions in the Middle East

This article introduces the latest legislation adopted in the Dubai International Financial Centre (DIFC), one of the Middle East’s leading financial centres, in respect of secured transactions. It discusses the policy objectives underpinning this new legislation, as well as certain innovative legal concepts which were included in it, and which the DIFC Authority (DIFCA) hopes will push the DIFC to the “forefront of best practice” globally.

The Corporate Sustainability Due Diligence Directive: impact on financial services businesses

The EU’s Corporate Sustainability Due Diligence Directive (CS3D) will be highly consequential for those large EU and non-EU companies that fall within its scope. Despite some misleading commentary to the contrary, the financial sector is in scope of the CS3D as finally agreed by the European legislators in May 2024. In this article, we discuss the extent of these obligations and some uncertainties that remain, especially for asset managers in the private equity and venture capital sector.

Turn the Unfair Terms Directive into a Regulation!

In this article, the authors set out the arguments for replacing the EU Directive on Unfair Terms in Consumer Contracts with a Regulation by identifying the problems with the current legislation and the advantages of a change.

Fixed rate loans: tough break (costs) for borrowers

This article considers the recent decision in Farol Holdings Limited & ors v Clydesdale Bank PLC & National Australia Bank Limited  [2024] EWHC 593 (Ch) and its likely impact on the landscape of lender/borrower disputes for the recoverability of break costs and the establishment of an unfair relationship.

Debt financing of AI companies: identifying “AI assets” for the security net

In this article the authors identify the assets of the AI ecosystem, provide a non-exhaustive methodology for identifying them and explain how you would typically take security over certain of those assets in the context of a debt finance transaction.

Financial sanctions and investment treaty arbitration

Financial institutions may be the subject of sanctions unilaterally imposed by individual states. While sanctions can be challenged through domestic means, foreign investors affected by sanctions have the right to bring proceedings against the sanction-imposing host state before international arbitral tribunals, provided investment treaty protection exists. Final awards, in particular monetary remedies against the host state, can be enforced globally.