In Practice

Green bonds: time for new investor protections?

Green bonds, the proceeds of which are intended to be applied to green projects, have increased in popularity as investors seek to tackle the climate crisis alongside maximising economic returns. A feature of green bonds that some may find quite surprising is that the intended use of proceeds of a green bond is not specified in the contractual terms and conditions. The terms and conditions of a green bond are in fact typically identical to those of a conventional bond. The FCA and others have raised the question of whether the “use of proceeds” provisions in green bond documentation should reflect their central purpose and whether the current legally flexible approach to use of proceeds is sufficient to protect investors from “green-washing”. In this In practice article, we outline the reasons why “use of proceeds” provisions have not been tightened in green bonds so far and why, ultimately, the current approach is aligned with the green goals market participants are seeking to achieve.

Rated subscription lines: bringing fund governing documents and finance documents into focus

In this In Practice article we will explore the benefits of obtaining a rating for a subscription facility. By reference to ratings criteria announced by the main agencies, we will explore how the limited partnership agreement, side letters and the related finance documentation are analysed to arrive at a rating.

The critical importance of “Shariah compliance” in the Islamic financial services industry: the UK’s need for jurisprudential clarity

In this In Practice article, leading UK and international legal authority on Islamic financial law, Professor Lu’ayy Al-Rimawi explains how the muddled question of “Shariah compliance” in the UK will inevitably transplant itself into litigation risk in terms of misselling and/or misrepresentation claims and the UK’s need for jurisprudential clarity.

CP24/2: a comparison with other International Financial Centres

On 27 February 2024, the Financial Conduct Authority (FCA) published CP24/2: Our Enforcement Guide and publicising enforcement investigations – a new approach, which sets out a proposal that would see the regulator publicly announce the opening and progress of investigations, and other proposed changes to simplify the FCA’s Enforcement Guide (EG). We consider the FCA’s proposed approach to publicising information about ongoing investigations through the lens of the FCA’s secondary “international competitiveness” objective by comparing the proposal with other major international financial centres.

Culture and D&I in Financial Services: the latest reforms to shift the dial

This article explores the Financial Conduct Authority’s diversity and inclusion proposals for non-financial misconduct, alongside the wider political reform agenda, noting the intersecting financial regulatory and employment issues.

Personhood and the law: do crypto and digital assets need their own rules?

In this In Practice article Charles Kerrigan considers the tension between the concept of personality under English commercial law and the innovations of the crypto industry.

Diversity and inclusion: both a path and a destination

The UK financial regulators’ focus on diversity and inclusion (D&I) reflects changing societal norms and the increasing prominence of the Environmental, Social and Governance (ESG) agenda. This article examines some of the proposals and considers how implementation may be more challenging than it might appear at first sight.

Is litigation funding compatible with Shariah principles?

Biodiversity finance: becoming second nature

International financial markets have started to show significant interest in nature and biodiversity. Whilst climate change and greenhouse gas emissions have made the headlines in recent years, there has been much less focus on their equally important counterparts, nature and biodiversity. However, that has started to change.

European middle market CLOs could rise in 2024: despite some challenges

Collateralised loan obligations (CLOs) are a prominent feature in the European capital markets landscape. Last year, public issuance of CLOs in Europe generated a volume of €26bn from 69 deals, remaining relatively steady from 2022 despite a slow start to the year. However, the market is off to a strong start in 2024, with year-to-date volume at the end of February standing at €6.3bn and with market participants predicting a bumper year.