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It is dangerous to use pithy terms to describe the complex risks of a fund
For marketing purposes, the complex and multiple risks of a fund are often summarised in catchy terms which ultimately are inaccurate or incomplete. This can lead to a charge of misrepresentation and censure by the regulator and litigation by the investors.
25 March 2024Interest under a loan linked to a base rate: issues to consider
This article considers the issues that it is suggested finance lawyers should have in mind if asked to advise on a proposed loan where the interest payable is to be linked to the Bank of England bank rate, the base rate of another central bank, or the base rate of the lender. The author focuses on key differences between different methods of calculating interest, how interest rates can be structured and various practical issues that arise.
25 March 2024Interpreting statutes and contracts: what are the differences? Part I
In this Part 1, Richard Calnan discusses the similarities between contractual and statutory interpretation and then explores one important difference. Part 2, to be published in a later edition, will discuss three other important differences.
25 March 2024Is your MAE/MAC clause ready for the next pandemic?
In this article, Sa’ad Hossain QC considers lessons for the draftsmen of MAE/MAC clauses from the recent Travelport v WEX litigation.
25 March 2024Does the liquidator have a duty to deal with trust assets?
The extent, if any, to which the liquidator of a corporate trustee is under duties in relation to trust property has received very limited attention from the English courts. The point is important since corporate trustees collectively hold property worth trillions. If such trustees cannot be placed in special administration proceedings or if the administrator of a corporate trustee is unable fully to deal with trust property prior to the end of the special administration, the absence of any duty on the liquidator to deal with such property in some appropriate way would open up a serious lacuna in the efficacy of the liquidation regime. This article sets out tentative and exploratory considerations that may assist a court asked to address this question.
25 March 2024Transfers of equitable interests in the digital asset world
In this article Hin Liu explains why it is uncertain whether commercial parties can transfer their equitable interests under certain digital asset arrangements. He suggests the need for statutory reform to maintain the necessary confidence that transactions in the digital asset world can take effect as intended.
25 March 2024The UK’s bank ring-fencing legislation: legal uncertainties and potential solutions
This article is based on the FMLC’s Report on UK bank ring-fencing legislation, published in November 2021, in which the FMLC recommended amendments to the legislative framework. It delves into four of the eight issues examined by the FMLC’s Report, providing the legislative context, the impact of the uncertainty and the proposed solution by which each issue may be mitigated.
25 March 2024A comparison of re-proposed SEC Rule 9j-1 and the UK/EU Market Abuse Regulation
Despite industry criticism of the Rule 9j-1 originally proposed in 2010, the SEC recently re-proposed Rule 9j-1 with even further reach in antifraud, anti-manipulation liabilities for security-based swaps. In particular, the re-proposal lowers the standard of mental state requirement for insider trading liabilities, adds a new prohibition on acts and attempted acts of price manipulation, and seeks to apply similar expanded violations to assets underlying or related to the security-based swap. Compared to the re-proposed Rule 9j-1, the UK/EU Market Abuse Regulation has a different scope and is not specifically designed to apply to swaps and derivatives, but contains prohibitions in the same categories as those under the re-proposed Rule 9j-1.
25 March 2024Sanctions test illegality clauses in financial contracts
The recent sanctions imposed in response to the war in Ukraine have meant that the consequences of illegality under financial transactions such as derivatives, repo and securities lending have again been in the spotlight for financial institutions and their clients. The legal position varies across different market standard agreements. This article considers the relevant provisions in the ISDA aster Agreement (2002 version) (ISDA Master Agreement), the Global Master Securities Lending Agreement (2010 version) (GMSLA) and the Global Master Repurchase Agreement (2011 version) (GMRA), in each case assuming that the governing law is English law.
25 March 2024Non-fungible tokens: select legal issues
Non-fungible tokens (NFTs) have captured investor attention as an emerging asset class, with the value of the relevant market estimated at US$10.7bn (third quarter of 2021). Although there is nothing new about their underlying technology (blockchain), what is novel is its use by artists, athletes, and public figures to commercialise their creative work, and to monetise their brand name. We explore three of the plethora of legal issues that NFTs throw up: (i) the nature of NFT holders’ rights; (ii) whether NFTs can qualify as “securities”; and (iii) the extent to which they are covered by crypto-asset-specific regulation in select jurisdictions.
25 March 2024
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