Feature

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).

Electronic trade documents: what is a reliable computer system? and problems in contracting for a “reliable system”

The International Trade and Forfaiting Association (ITFA) has recently published an “Addendum” to its Guide to Digital Negotiable Instruments in connection with the Electronic Trade Documents Act 2023. The ITFA Addendum recommends that members might adopt a contractual term: “The [Issuer/Drawer/Obligor] and the [Holder] agree for the benefit of themselves and any subsequent [Holder] of this [… ] that the [relevant system] constitutes a ‘reliable system’ for the purposes of the Electronic Trade Documents Act 2023 and they agree not to challenge it being a reliable system for the purposes of the Electronic Trade Documents Act 2023”.¹ This article discusses whether that term provides a solution to the problem that it purports to address, and some legal issues that may arise.

ESG as a case-study in legal uncertainty*

This article focuses on the nature and consequences of legal uncertainty in the context of ESG and the related issue of whether law reform might improve legal certainty.

Delisting the dead: a UK perspective

Dieudonné Ozia Mazio was a smuggler mixed up in violence in the Democratic Republic of the Congo. Anwar Al-Awlaki was a Muslim cleric in Yemen, once called the world’s “most dangerous ideologue”. Mazio and Al-Awlaki are extreme examples of sanctioned dead people. They died many years ago, but their names remain on UK and other sanctions lists. Their names provide a point of entry into live issues about “delisting” or taking names off sanctions lists. What is the current state of the UK’s sanctions list? How does delisting work? How important is it? Can we make it better? How? What impact does the current system have on human rights? The discussion below tackles these issues and argues for reform of how the UK government reviews its sanctions list. This article also aims to provoke debate. The time is right, pending further inquiry into UK sanctions policy. There may be a chance to influence legislative plans for 2025.

Is crystallisation crystal clear?

In this article, Tina Kyriakides considers issues surrounding the crystallisation of floating charges including whether partial crystallisation, de-crystallisation and re-crystallisation is possible.

Voting issues in debtor schemes of arrangement and restructuring plans: the rights of sub-participants

In this article Robert Amey considers a sub-participant’s right to vote on a scheme of arrangement or restructuring plan with a look at its treatment as a contingent creditor and whether the analysis which has been applied to beneficial bondholders can be carried across.

The correct approach to findings of foreign law: precedent and policy

This article considers the recent Court of Appeal decision of Banca Intesa Sanpaolo SpA v Comune di Venezia [2023] EWCA Civ 1482 and focusses on some of the potential implications of that decision on the approach to findings of foreign law in English proceedings.