In Practice
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Intra-group loan agreements: what do finance lawyers need to know?
In the current economic landscape, which is plagued with high inflation and interest rates, the legal agreements covering intra-group loan transactions are being reviewed with a fine-tooth comb from an arm’s length perspective. This is because loan agreements are a starting point for any transfer pricing analysis and if done properly (ie are arm’s length) can assist in justifying interest deduction locally ensuring that there is no, to limited, double taxation. The question is however – what does an arm’s length loan agreement entail? In this In Practice article, we explore this question and highlight the key aspects to consider with their potential repercussions.
19 March 2024“Double materiality”: what does it mean for non-financial reporting?
Companies have been publicly reporting on their financial performance for over a hundred years. However, they are increasingly having to make public non-financial disclosures relating to sustainability and environmental, social and governance (ESG) matters as a result of rules, laws and regulations issued by stock exchanges, governments and regulators worldwide. In the context of non-financial reporting, there has been increasing awareness of the concept of “double materiality” in recent years. In this article we clarify what “double materiality” means and provide the context of its regulatory background within the EU. We also consider the significance of “double materiality” and give our views on the potential consequences for companies of non-compliance.
19 March 2024UK equity capital markets: reforming the listing regime
In this In Practice article the authors summarise the key features of the proposed changes to the UK listing regime.
19 March 2024Safe harbours in lending transactions: exclusions from the requirement to register express trusts
This In Practice article considers some of the exclusions from the Trust Registration Service requirements that may be applicable to express trusts found in lending transactions.
19 March 2024Pillar Two: the global minimum tax and its implications for financing transactions
The last few years have seen discussions at an inter-governmental level, led by the OECD, on how to amend the international tax system to deal with the changing business practices created by the digital economy. This includes an agreement to implement a global minimum corporate tax rate of 15% for large multi-national entities (MNEs). These discussions have now progressed to the stage where individual jurisdictions (including the UK) are beginning to introduce domestic legislation to implement the principles of the minimum tax, such that the theory is becoming reality. These rules will have implications for the assumptions being made by lenders as to the way borrowers under certain types of financing will be taxed. This article looks at some of these implications at the borrower level.
19 March 2024Generative AI, banking and financial markets
In this In Practice article the authors consider the steps for financial institutions to consider when developing a new AI strategy.
19 March 2024The FCA’s new consumer duty could affect FCA regulated investors in asset backed financings of products offered to retail customers
The policy statement and final guidance on the consumer duty published on 27 July 2022 by the UK’s Financial Conduct Authority (FCA) set out a new Principle for Business for regulated firms, new cross-cutting rules and detailed expected outcomes that these rules and the new principle should have on retail customers (together the “Duty”). The Duty has multiple implementation stages with the key dates being: (i) 31 July 2023, when the Duty will apply to all new products and services and existing products and services that are open to sale or renewal; and (ii) 31 July 2024, when the Duty will extend to all closed products and services. This article explores some practical considerations for FCA regulated investors in asset backed financings (Investors) of products offered to retail customers when determining whether the Duty applies to them.
19 March 2024Scope 1, 2 and 3 emissions as KPIs in sustainability-linked loans
This In Practice article explains the differences between Scope 1, 2 and 3 emissions as key performance indicators (KPIs) and sustainability performance targets (SPTs) in sustainability-linked loans and then explores factors to consider when adopting Scope 3 emissions.
19 March 2024Conflicting signals? Potential impacts of the SEC’s proposed conflicts of interest rule on UK and EU CLO managers
On 25 January 2023, the US Securities and Exchange Commission (SEC) proposed a far-reaching rule (Rule 192)11 to prohibit securitisation transactions involving or resulting in a material conflict of interest between certain securitisation participants and investors. The rule is required by s 27B of the Securities Act,122 as inserted by s 621 of the Dodd-Frank Act.233 In this In Practice article the authors consider the impact of Rule 192 on UK and EU CLO managers. 3
19 March 2024Embedded finance: Dear CEO
In March (2023) 3 JIBFL 190, we discussed some of the challenges in providing sustainable finance products to consumers from the perspective of revenue-based finance; an embedded finance offering. Namely, there is a balance to strike between: (i) speed and automation; and (ii) positive customer outcomes. On 16 March 2023, the Financial Conduct Authority (FCA) issued a Dear CEO letter (Letter), addressed to payment firms supervised by the FCA within its payments portfolio, highlighting concerns that certain payment firms are not currently striking this balance. For embedded finance, the Letter will primarily impact providers that offer embedded banking services (if they are supervised payment firms), but it may have a wider impact across the industry.
19 March 2024
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