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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 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 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 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 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 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 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 2024Fund finance: the regulatory requirements applicable to securitisations in the EU and UK
In the March 2022 edition of Butterworths Journal of International Banking and Financial Law ((2022) 3 JIBFL 198), we briefly explored the analysis undertaken to determine whether a transaction in the European fund finance market constitutes a “securitisation” under the EU1 and UK2 regulatory frameworks. If a fund financing does constitute a securitisation, further work is required to establish how the applicable regulatory requirements will be met. In this follow-on article, we survey the application of the key regulatory requirements imposed on participants in securitisations in the EU and UK in the context of fund financing transactions, namely: risk retention, transparency (and reporting), due diligence and credit granting requirements. We also consider the direct applicability of the rules to fund parties and the related provisions participants in these transactions should expect in the financing documents.
25 March 2024Russia and Ukraine: the end of Article VIII 2b?
Bad wars expose the weaknesses in the international framework of law. The attack by Russia on Ukraine is no exception to this proposition in an area of law often considered to be obscure but of very significant consequences. This is Article VIII 2b of the IMF agreement which allows a member’s exchange controls unilaterally to override its contracts in certain cases. This Article is considered a blot on the otherwise pure parchment of the IMF Agreement and should be removed.
25 March 2024
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