Feature

Enhancing trust in ESG ratings: welcome moves to fix the ecosystem

In this article, we consider the encouraging progress being made in the introduction of voluntary and mandatory solutions to address identified shortcomings and promote greater consistency, reliability and trust in the market for ESG ratings.

Delivering valid notices of assignment: s 136 in 2024

It is well established that emails satisfy a requirement for “writing” and are documents. It is also well known that many documents in writing need to be authenticated by the writer’s signature. There are now multiple mechanisms that allow for electronic signatures as a means of authentication of an electronic document. The use of email and other electronic communications to give notice to a debtor of the fact of a statutory assignment under s 136 of the Law of Property Act 1925 is also widespread. The question as to whether electronic notice of an assignment under s 136 is valid has still not been to the Court of Appeal. Case law is confused on the point. This article suggests once again the better view is that it should be valid and the contrary case law should not be followed.

Pitfalls with board resolutions authorising loan facilities

Directors sometimes express doubt as to what role a company’s board should play, once authority to negotiate and enter into a loan facility has been delegated to one or more of their number. If new terms are offered or circumstances change, which alter the suitability of the proposed finance, what can, or should the remaining directors do? In turn, what should the appointed director(s) do? This article explores some of the issues and considers how some pitfalls might be avoided.

Fund finance and sustainability: new guidance on the application of the SLLPs

Over recent years there has been significant growth and development in the fund finance industry, which has expanded over the last decade into a global market now worth more than US$600bn, according to the asset manager abrdn. As the market has continue to mature, the variety of tools available to investors (which include private equity, private credit and venture capital) to fund their operations has expanded considerably beyond the traditional subscription facility to encompass many more types of fund financing. One such innovation has been the introduction and adoption of sustainable finance, either by the way of use of proceeds facilities (green loans) or sustainability-linked loan facilities. 

In light of the increased use of ESG-linked financing in the fund finance market, on 5 March 2024 the Loan Market Association, Asia Pacific Loan Market Association, Loan Syndications and Trading Association and the Fund Finance Association published 'A Guide to the Application of the Sustainability Linked Loan Principles in Fund Finance' (Guide), which provides practical guidance to market participants on how the Sustainability Linked Loan Principles can be used the fund finance market, as well as identifying and addressing challenges and considerations  particular to fund finance transactions. 

In this article we will examine the use of sustainability-linked financing in the fund finance market and consider some of the issues raised by the Guide. 

Does the restoration of Crown preference mean that guarantors can get off the hook?

When the economic landscape changes, people often look to wriggle out of their financial commitments. Just such a change occurred in 2020, when HMRC’s status as a preferential creditor of insolvent companies was restored.

Joining the dots: a wider use for AML e-verification tools?

Everything is electronic nowadays. Globalisation, technology and Covid have all played a significant part in driving legal changes that mean it is rare not to be able to sign documents, open bank accounts or indeed do most things using just a keyboard or a click. But can established processes help to mitigate the risks of more newly permitted e-signatures? This article looks at how anti-money laundering identity verification processes can help with verification of document signatories.

The new NPL Directive: an uncertain path ahead

Almost four years ago – in March 2018 – the European Commission proposed a directive intended to promote the growth of the secondary market in non-performing loans (NPLs). This was part of a broader plan to help reduce the burden of NPLs on European bank balance sheets. After a long and winding legislative road, the European Parliament approved the final version of the Directive on 19 October 2021. The same text was approved by the Council on 9 November 2021 and is likely to be published in the Official Journal of the EU in the coming months. In this article we set out some of the features of the new Directive and areas of likely market concern (and especially for the securitisation market) arising out of it.

Wholesale Markets Review: an enhanced, tailor-made regime for UK markets

In this article, Elisabeth Øverland considers the principal proposals included in HM Treasury’s recent consultation on wholesale markets regulation – the Wholesale Markets Review.

Merricks v Mastercard: the litigation risks for the financial services sector

The recent decisions in the Merricks v Mastercard  litigation will most obviously have a significant impact on the competition class actions regime, but may also have repercussions for the wider litigation landscape, particularly in relation to mass consumer claims. In this article, we consider the potential litigation risks for the financial services sector.

ETFs: could crisis be looming?

Exchange traded funds, or ETFs, are one of the most successful financial innovations in the modern era; of similar vintage and, arguably, significance to mortgage-backed securities, but to date thankfully not (yet) as contorversial. 

This article looks at their key features, contextualises their inexorable rise by reference to some performance figures and, by reference to two examples of their higher risk synthetic variants, leveraged and inverse ETFs, highlights both the potential systemic risks they pose to the stability of global financial markets and regulators’ preparedness to address those risks.