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Moveable Transactions Reform in Scotland: acquiescence and the perils of over-pledging
This article identifies certain practical challenges in respect of taking Scottish statutory pledges (SSPs) under the recently passed and not-yet-in-force Moveable Transactions (Scotland) Act 2023. It identifies that SSPs will be released if lenders informally acquiesce in the transfer of part of the pledged property, and argues that pledging too many assets, especially current assets, is an avoidable danger to an SSP.
08 April 2024Transferring legal title to a digital asset: shared and limited control arrangements (Part 2)
In this article, Hin Liu proposes a three-step structure for deciding what the rule for the transfer of title to a digital asset should be in the shared or limited control context. The structure provides a framework that can be applied by a legislature or court (or law reform body).
08 April 2024UK SDR: setting the ESG blueprint for the world?
The new sustainability disclosure requirements and investment labels regime was introduced by the Financial Conduct Authority (FCA) to improve clarity and address the risks of greenwashing in the UK financial markets. The policy includes four sustainability labels (all of which have the same status – ie there is no hierarchy) and an anti-greenwashing rule applicable to FCA-regulated firms. Overall, the FCA have taken a very pragmatic approach (eg in areas like minimum portfolio composition and temporary breaches), which also avoids many of the issues posed by the EU Sustainable Finance Disclosure Regulation regime by contrast (which was intended to be a disclosure regime but has become a de facto labelling regime). However, some uncertainty remains, notably around the practical adoption of the newly introduced labels as well as the application of the regime to overseas funds, which are not currently covered. Implementation of the regime by firms would require careful examination of the new rules in light of the principle and outcomes-based approach taken by the FCA. Helpfully, the rules have been written with interoperability and international convergence in mind – and the overall pragmatic and outcomes-based approach is likely to provide a useful ESG product labelling and disclosure regime for international regulators.
08 April 2024Part 26A Restructuring Plans: how significant is the Court of Appeal’s judgment in Adler?
The judgment sets out how a court should approach exercising its cross-class cram-down power, emphasising that any differential treatment of a dissenting class must be commercially justified where that class would be at least partially in-the-money in the “relevant alternative”. It also contains valuable reminders of best practice when using the Pt 26A procedure.
08 April 2024Decentralised finance (DeFi): a game-changer or just a passing fad?
DeFi is a term used to describe decentralised applications that provide financial services using blockchain technology. DeFi leverages on technologies such as smart contracts and open-source protocols to execute peer-to-peer transactions without the use of any centralised party. Given the increasing prevalence and receptiveness towards DeFi, stakeholders in the financial industry should possess some basic understanding of this new alternative to the traditional financial system. This article outlines the distinctive characteristics, underlying benefits and risks of DeFi applications, and the regulatory approaches towards regulating such applications.
26 March 2024Protection of client assets under Belgian law and trust-like structures
The purposes of this article is to give a brief overview of the reception of the trust concept under Belgian law, including the recognition of a foreign law trust, as well as to provide a description of certain trust-like structures under Belgian law.
26 March 2024The social side of sustainable finance
This article looks at the rise of social loan financing spurred on recently by COVID-19 recovery financing and discusses the challenges for borrowers and lenders in using the use of proceeds and sustainability-linked social loan structures.
26 March 2024A fresh look at the three Rs: the EU’s CCP Recovery and Resolution Regulation
The EU Regulation on Recovery and Resolution of CCPs came into law in February 2021. It sets a clear path for CCPs in near-terminal difficulties, broadly following previous international guidelines. New tools have been created to enable CCPs to recover, and a familiar toolkit has been made available to resolution authorities. Yet problems remain: the purpose of resolution is still unclear, the tools for resolution all have drawbacks, and the checks and balances on the process are weak. Nonetheless, this article concludes that the Regulation is a valuable model law for other jurisdictions, while important unanswered policy questions concerning CCPs should remain on the agenda for debate.
26 March 2024A review of private credit in the immediate wake of COVID-19
In the aftermath of the global financial crisis, private credit institutions emerged as being able to offer flexible financing solutions on short timeframes when compared to more heavily regulated banks. Traditional bank lending inevitably had slower processes and more limited scope to support nuanced credits. The strengths of the private credit model may well permit those institutions to advance their position further in the post-pandemic landscape. Whilst all private credits funds have as their objective a strong economic return, the context of each investment will determine the optimal approach each institution will employ to achieve that result.
26 March 2024The Lehman litigation: the waterfall keeps falling
In Lehman Brothers Holdings Scottish LP 3 v Lehman Brothers Holdings Plc (In Administration) [2021] EWCA Civ 1523, the Court of Appeal determined the priority of competing subordinated claims over the £800m to £1bn available in the distributing administration of LB Holdings Intermediate 2 Ltd and considered the common law position regarding part payment of a debt by a surety, as well as the rule against double proof.
26 March 2024
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