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A 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 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 2024Inside the machine: the European Commission’s proposed consolidated tape for bonds
The author considers the origins, purpose and implications of a very particular machine – the European Commission’s proposed “consolidated tape” for bonds.
25 March 2024The Commercial Rent (Coronavirus) Act 2022: what does it mean for landlords and their funders?
This article summarises the position of landlords and their funders, and of tenants, under the Commercial Rent (Coronavirus) Act 2022.
25 March 2024SFDR RTS and ESG sectoral amendments: mismatches and implementation challenges
On 6 April 2022, the European Commission adopted the final Regulatory Technical Standards (RTS) under the Sustainable Finance Disclosure Regulation (SFDR) and its Annexes. The RTS was previously supposed to apply from July 2022 but will now instead apply from 1 January 2023.
25 March 2024Burdening assignees with arbitration agreements via “conditional benefits”
In this article, the author compares two concepts that seek to explain why an assignee of a chose in action may be burdened by an arbitration agreement to which it is not privy. He posits that, of the “conditional benefits” concept and the “subject to equities” principle, the latter provides the better explanation.
25 March 2024Another roll of the dice: the elusive line between hedging and speculation
The question of whether a derivative transaction is properly characterised as a hedge or as speculation has long vexed the English courts. It has arisen recently in a decision of the Commercial Court dealing with the capacity of an Italian local authority to transact interest-rate swaps. This article reviews the caselaw on the question and asks: (i) is it possible for the courts to make any distinction between hedging transactions and speculative transactions?; and (ii) what test should be applied?
25 March 2024
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