Feature

UK 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.

Part 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.

Transferring 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).

Drop downs and up-tiers in English law loan documentation

Over the past few years there has been a focus on whether loan documentation can be used to create additional priority debt, often as a result of transactions that were not anticipated by incumbent lenders. Various labels have been attached to these types of transaction, with the following becoming common currency: “drop down” and “up-tiering” transactions. While they have different component parts, they result in participating creditors gaining a priority position viz-à-viz other creditors in the borrower’s capital structure. A number of articles discussing aspects of these transactions have been circulated by market participants and the LSTA has published a very helpful market advisory on drafting for New York law credit agreements. This article takes a look at these topics in English law documentation.

Distressed insurers: recent insolvency reforms and future resolution framework

In this article the authors consider the changes introduced by Financial Services and Markets Act 2023 to enhance the insolvency framework and tools available in relation to distressed insurers – and the proposed new UK Insurance Resolution Regime which is intended to provide the Bank of England with enhanced powers to manage the failure of systemically important insurers.

Welcome clarification from the DIFC Court on the amendments to the UAE Federal Banking Law

In this article, Zoe O’Sullivan reviews the recent decision of Punjab National Bank v Shetty (CFI No. 079/2020, 19 January 2024) issued by the Dubai International Financial Centre (DIFC) Court (and comments on its implications for financial institutions established in the DIFC).

Hedging risk-free rates

Creditor beware: proving for debts in limited recourse loans following Lendy

SFDR Commission Q&As: more Qs than As

On 26 July 2021, the European Commission published Q&As under the EU Sustainable Finance Disclosure Regulation (SFDR) with the aim of clarifying certain aspects of the regime. However, as we consider below, the Commission’s feedback in the Q&As has given rise to more questions than answers.

Converting fiat money into cryptoassets over a blockchain: what new laws and regulations are required?

When real money is converted into cryptocurrencies, such transactions do not fit into established financial services regulation. This is the case whether analysing the UK, Sweden, Singapore or any other leading FinTech jurisdiction. After clarifying the difference between fiat money and cryptoassets, this article explains why distributed ledger technology (DLT) does not fit into existing regulations, such as MiFID governing trading venues. Nor do other existing financial regulations sufficiently protect consumers. Alternative solutions are proposed in the form of new financial services law focused on crypto exchanges, DLT and wallet providers.