In Practice

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.

This snapshot indicates how reforms proposed under the UK Wholesale Markets Review (WMR) will be implemented and also compares proposals with EU measures.

In this article the authors consider the key issues and challenges which remain for buy-side entities following the final phase-in of initial margin requirements under EMIR and UK EMIR.

In this In Practice article, leading UK and international legal authority on Islamic financial law, Professor Lu’ayy Al-Rimawi explains why Islamic banks in the UK need to eschew legal wizardry and do considerably more to ensure their mortgages are cost-effective.

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

Existing UK and EU capital requirements on cryptoasset exposures will soon be updated to reflect the new international standard published by the Basel Committee on Banking Supervision (BCBS).

The unique selling point of embedded finance is customer convenience; described by consultancy firm 11:FS as financial products offered to customers “at the point of customer need”. For small and medium-sized enterprises (SMEs), embedded lending such as revenue-based financing (RBF) provides an alternative means for funding with many benefits, including, ease of application, greater speed to funding and automated credit decisions produced using data sources and analytics. However, against the current economic outlook there is a tension between speed and robust lending practices that protect vulnerable customers, including those in financial difficulty. With the spotlight on business to consumer buy-now-pay-later (B2C BNPL) in terms of UK regulatory oversight, what steps do RBF providers need to take to deliver a responsible lending solution?

In this article, the authors reflect on the recent Supreme Court judgment in BTI 2014 LLC v Sequana SA [2022] UKSC 112 and its practical implications for directors trading in the zone of insolvency.

Iain Balkwill considers the differences between CRE CLOs and European CMBS and the rationale for their application.

The New York legislature is currently considering three Bills that could substantially impact sovereign debt markets if enacted. The Bills would: (i) limit private creditors’ recovery in the event of sovereign default; (ii) block private parties from purchasing sovereign debt for the purpose of litigating a renegotiation of the debt; and (iii) create a binding, bankruptcy-like restructuring mechanism for sovereign debtors. This In Practice article looks at some of the potential implications of the New York Bills.