Feature

Dual class Premium listings: no reason for the reservations?

In the UK Listing Review it is suggested that the LSE should allow companies with dual class share (DCS) structures to list on the Premium segment. In this article, we discuss this proposal. First, we discuss the arguments that are made against DCS-listings, and we give an overview of the Swedish DCS-regulation. From there, we discuss the conditions for DCS-listing recommended in the Review. We conclude that the listing conditions suggested might not only hinder DCS-structures from being useful for some companies but would risk disabling mechanisms that could counteract several of the problems that DCS-structures may cause.

The European Commission’s targeted consultations on European Union settlement finality and financial collateral rules

The previous occasion on which we heard from the European Commission on the directives (an interpretative communication in March 2018)³ was somewhat of a non-event. In relation to key issues of interpretation, related to the question of which law governs the proprietary aspects of collateral transactions in book-entry securities, the Commission “clarified” that all the divergent approaches taken by member states were valid under the relevant directive provisions.⁴ In fact, despite their undoubted importance to the Commission’s longstanding aim of achieving integrated capital markets in Europe, relatively little has been said about the directives at EU-level, leaving it largely up to member states to define their scope and operation. In contrast, the consultations raised a number of important and interesting policy ideas. I will discuss a few of these below, as well as consider whether there are other material issues to be addressed in an eventual amendment to the directives in order to meet their objectives. I will argue that a review of the directives should prioritise the full resolution of the conflicts of laws that cross-border systems and financial collateral transactions present.

Do BNP v Trattamento and Fine Care v Natwest show the courts retreating from the principles established in First Tower Trustees?

Civil remedies for abusive short selling

In this article Jonathan Dawid considers how victims of abusive short selling can seek legal redress against those responsible for their loss.

Take it on trust: “relevant funds” under The Payment and Electronic Money Institution Insolvency Regulations 2021

In this article, Timothy Sherwin considers the provisions concerning the return and stewardship of “relevant funds” under the new Payment and Electronic Money Institution Insolvency Regulations 2021. The article was written before the High Court’s judgment in In the matter of ipagoo LLP (in administration) [2021] EWHC 2163, which, in contrast to In Re Supercapital [2020] EWHC 1685 (Ch), determined that no statutory trust exists over safeguarded funds held under the Electronic Money Regulations 2011. The Ipagoo decision does not overrule Supercapital and relates to different legislation but the inconsistency in approach means that the existence of a statutory trust may not now be the correct legal position. (A case analysis on the ipagoo decision will follow in the October edition).

Scheme meetings in a global pandemic

COVID-19 has fundamentally altered how companies are able to hold meetings of their shareholders and creditors. This article explores how the courts have dealt with these disruptions in the context of schemes of arrangement under Pt 26 of the Companies Act 2006, and under the new restructuring plan regime under Pt 26A of the Companies Act 2006. It demonstrates that the courts have adopted a flexible approach, enabling meetings to be held even where members or creditors cannot physically come together due to social distancing restrictions.

Creative uses of collateral: opportunities for leveraged companies

Credit to leveraged companies normally ties to the cash flow of the borrower’s business. But the coronavirus pandemic has wreaked havoc on the financial standing of many borrowers, upending their ability to predict cash flows and prompting them to raise capital against hard assets’ liquidation value. In the process, new transaction structures have emerged that use collateral more creatively to maximise borrowing capacity.

Payments by mistake: when will the discharge of an existing debt be a defence to a claim for repayment?

On 11 August 2020, Citibank made a payment of US$900m to the lenders under a syndicated loan agreement, in what the US court later described as “one of the biggest blunders in banking history”. When Citibank sued for the return of the money, the US court held that it was not entitled to repayment because the payments discharged an existing debt and the recipients had no notice of the mistake. That decision, on 16 February 2021, has understandably caused consternation among bankers. One report described the decision as “eye-watering” and one that “will strike terror into earnest hearts in the global trust and agency community”. London, of course, is another global financial hub and the industry might be equally interested to know how this dispute might have been determined as a matter of English law. This article addresses that question.

Does situs actually matter in disputes concerning bitcoin?

There has been considerable interest in the recent ruling of the High Court in Ion Science Ltd v Persons Unknown (unreported, 21 December 2020)¹ as the first in which an English court has considered the question of situs in respect of a Bitcoin. Long described as an “intractable question”, many have taken the case to stand potentially for the proposition that the situs of a cryptoasset is the place where its owner is domiciled.

The proposal for a regulation on markets in crypto-assets: disjuncts between regulatory and private law

This article considers the EU Commission’s Proposal for a Regulation on Markets in Crypto-Assets. Premised on what is submitted to be a disjunct in the approaches taken to regulatory and private law rights and obligations, it considers the consequent private law issues arising in misrepresentation, negligence, proprietary interests, and private international law.