In Practice
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The “crypto crash”: a catalyst for further crypto litigation?
In recent years, the cryptoasset market has developed rapidly, with market capitalisation for cryptoassets estimated to have been around US$2.6-3trn in 2021.1 The market for decentralised finance (DeFi), although still relatively small, has also expanded quickly from less than US$10bn in 2020 to nearly US$100bn in 2021.2 However, over the last few months the cryptoasset market – specifically cryptocurrencies – has been seeing one of its worst selloffs since a market rally in 2020. This has sparked panic amongst investors, causing substantial financial losses. Inevitably, this has seen a flurry of litigation globally in recent months. This trend is likely to continue. We consider the causes of the crypto crash and the likely litigation risks for financial institutions and advisers.
20 March 2024Embedded finance: key considerations for funders of platform borrowers
Embedded finance is, broadly, the availability of financial products, integrated into a company’s infrastructure, provided by non-financial institutions and capitalised by “traditional” financial institutions. Companies are providing these products directly to their own customers, cutting out financial institutions as intermediaries. The benefits of these technology driven products for end-users are efficiency of transactions and bundling complementary services to enhance customer experience (eg point of sale buy-now-pay-later (BNPL) credit).
20 March 2024Recent trends in leveraged financing: the ever more borrower friendly market
In this article the authors examine recent trends in leveraged finance transactions, looking at “Most Favoured Nation” (MFN) protection, dividend to debt reallocation mechanics, ineffective IP transfer prohibitions and super grower baskets/contribution debt baskets.
20 March 2024The Draft RTS on ESG disclosures for STS securitisations: a hit or a miss?
Draft technical standards concerning sustainability disclosures aim to make STS securitisations more appealing from an ESG investment perspective. This In Practice article examines the proposed regime and identifies some practical shortcomings.
20 March 2024When AI meets the Consumer Duty
Artificial intelligence (AI), with its power to process large volumes of data, can provide more personalisation of financial products and services for consumers at greater scale and efficiency, and at lower cost. It can, in principle, enable firms to provide better support for vulnerable customers (for example, to consumers without standard credit histories, or through the use of simplified advice). All this could help to advance the FCA’s desired outcome of increased access through greater financial inclusion.1 This In Practice article considers the recent Discussion Paper to foster debate on this issue.
19 March 2024Corporate climate-related disclosures: what’s next?
The authors look at the progress made to date by the UK government in implementing climate-related disclosure rules and consider the preparatory steps that organisations should take ahead of the inevitable introduction of additional disclosure requirements.
19 March 2024Buy-Now Pay-Later Regulation: what’s next for third-party lenders?
HM Treasury’s (HMT) latest consultation on the UK regulation of Buy-Now Pay-Later lending (BNPL) includes welcome clarification regarding the scope of regulation and the application of exemptions, plus proposed draft amendments to the existing legislation. We examine the ambit of future regulation, where further clarification is required and the likely impact on consumer experience.
19 March 2024Climate derivative actions: over before they began?
Earlier this year, environmental law charity ClientEarth announced the first UK climate-based shareholder derivative action, seeking to hold a board of directors accountable for alleged deficiencies in their emissions reduction strategy. The claim fell at the first hurdle, the High Court refusing it permission to proceed on the papers – albeit ClientEarth will now have a second bite at the cherry in an oral hearing. This In Practice article considers the lessons learnt for future climate-related claims and the potential impact for the financial services sector.
19 March 2024Sustainability-linked loans: what more do you need to know?
Sustainability-linked loans continue to be a hot topic in the banking and finance industry, having significantly gained in popularity over recent years. This popularity is partly driven by the increasing social and environmental commitments and sustainability-related disclosure obligations on banks and financial institutions. This In Practice article covers some of the key principles and new elements to be aware of in this form of financing, including the LMA guidance on the external review process.
19 March 2024Embedded finance: market challenges and market changes
In September ((2022) 8 JIBFL 560) we outlined that embedded finance is the availability of financial products, integrated into a company’s infrastructure, provided by non-financial institutions (platform lenders) and capitalised by “traditional” financial institutions. One of the benefits of embedded finance is an enhanced customer experience. This customer-led approach will become more important in the current and forecast economic environment. COVID-19 drove a change in consumer habits and demands and saw record valuations for fintechs. However, as the world economy faces an increasingly challenging outlook, there has been a so-called “rebalancing” of these high valuations. In July 2022 credit card transactions by UK cardholders were up by nearly 10% on last year (UK Finance) and global e-commerce revenues are forecast to shrink for 2022. Does this signal trouble ahead for embedded finance?
19 March 2024
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