Archives: Regulation

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BREXIT- Hand-over your contingency plans…

Earlier this month the Bank of England’s Prudential Regulation Authority (the ‘PRA’) wrote to all UK companies undertaking cross-border activities between the UK and the EU under passporting arrangements, requesting a summary of their Brexit contingency plans. The letter continues the regulator’s focus on ensuring firms have robust measures and business strategies in place to … Continue Reading

ESMA clarifies timelines for publication of credit ratings and rating outlooks

Credit rating agencies (‘CRAs’) that operate in the EU will be interested to hear that on 30 March 2017, ESMA published an update to its Questions & Answers (Q&A) on the ‘CRA’ Regulation (Regulation 1060/2009, as amended in 2011 and 2013).  The CRA Regulation requires CRAs within the EU to be registered and to comply … Continue Reading

EU Referendum – what does it mean for alternative capital providers?

The UK referendum has caused uncertainty in the financial services industry, but what does it mean for alternative capital providers? And could it create some business opportunities? Alternative capital providers are unregulated, or at least non-bank, financial institutions. Alternative finance embraces lenders from the smallest participants in peer-to-peer platforms to multibillion dollar global alternative lending … Continue Reading

German Federal Court Ruling Important for Future Contractual Netting Arrangements

In a decision of 9 June 2016, the German Federal Court of Justice (Bundesgerichtshof, “BGH”) has ruled that the determination of the close-out amount in a netting provision based on the German Master Agreement for Financial Derivatives Transactions (Rahmenvertrag für Finanztermingeschäfte or DRV) is not legally effective in the event of insolvency to the extent … Continue Reading

Moving out of the dog house? The case for easing punitive capital requirements on securitisations

Eight years on from the credit crisis, the drive to rehabilitate securitisation continues. The most recent body to speak up for the increasingly regulated structures is the European Banking Authority, which last month published an Opinion and an accompanying Report on the establishment of a European framework for qualifying securitisations for the purposes of determining favorable regulatory … Continue Reading

CHAPS and CREST settlement days to be extended in summer 2016

I bring good news from the Bank of England. Whether you have been up all night trying to close a £1 billion securities transaction for your client, or you are buying a house and there’s a last minute snag, the deadline for settling securities transactions and making high-value cash transfers is due to be extended … Continue Reading

Mini-bonds – So good things come in small packages?

This may be a slightly odd question with which to start a legal blog post, but do you like burritos, wine, or chocolate? Who doesn’t, right? If only there was a way of making money off your addiction to tasty Mexican treats or decadent Swiss truffles? Well, as it turns out, there might be… Mini-bonds have become … Continue Reading

The Capital Markets Union – a great race?

The Investment Plan, developed by the European Commission, has the potential to be one of the most important and radical changes to how the European Union operates in the last 25 years.  Not only will it seek to harmonise the financial and regulatory barriers to investment, but it will look to harness the collective power of … Continue Reading

The issue of sanctions

Much has been written regarding the recent EU and US sanctions targeting the Russian capital markets, military and oil sectors (our own commentary can be found here) and the broad nature of the sanctions has, it would seem, produced some (probably) unintended consequences when applied to the mechanics of day to day capital markets operations.  … Continue Reading

Back(loading) to the Future – the Nuances of EMIR Transaction Reporting Requirements

It’s been barely six weeks since the EMIR trade reporting obligations came into effect on 12 February and, as the regulatory dust begins to settle, parties to derivative transactions are still in the process of assessing their duties under the new regime.  In the lead up to the February deadline, bank and securities firms were … Continue Reading

New Year, New Troubles for US regulators: Volcker Rule challenged before federal courts

It’s been a busy Christmas and New Year’s season for US regulators. After three years of work, the Federal Reserve Board announced in mid-December that five federal agencies have issued final rules to implement section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), which is intended to limit proprietary … Continue Reading

You Don’t Need EMIRacle – Trade Reporting for SPVs Made Easy

EMIR’s trade reporting obligations come into effect on 12 February and counterparties to derivative transactions are currently scrambling to ensure they have all the appropriate systems in place to ensure compliance. For large financial institutions, this has already involved many months of hard work and, even still, many are not optimistic about meeting next month’s … Continue Reading

Regulation of Money Market Funds and Securitisation

On 4 September 2013, the European Commission published a draft regulation on the regulation of European money market funds.  Money market funds are important investors in certain types of securitisation, particularly asset backed commercial paper, and the draft Regulation includes some detailed provisions dealing with this relationship.  This is explained in the recitals: “Due the fact … Continue Reading

CFTC Rules – When is a European SPV a commodity pool?

As part of the Dodd-Frank financial reforms, the U.S. Commodity Futures Trading Commission (“CFTC”) increased its oversight of “swaps”.  One change stemming from Dodd-Frank is that a “swap”, as defined in the Commodity Exchange Act and CFTC regulations, is now a “commodity interest”.  The CFTC regulates collective investment vehicles that invest in commodity interests, which … Continue Reading

RMBS can form part of the Basel III liquidity buffer. Some good news for the structured finance industry.

The Basel Committee on Banking Supervision announced yesterday that it had finalised the rules for the Liquidity Coverage Ratio or LCR i.e. the main mechanic for regulating liquidity in the Basel III package of reforms. The LCR requires that a bank hold a sufficient stock of “High Quality Liquid Assets” to meet its net cash outflows … Continue Reading

Loan-level data – implications

European Central Bank and Bank of England liquidity schemes require that loan-level data be disclosed on a regular basis (no less than quarterly) with respect to asset-backed securities which are to be used as collateral.  On 27 November the ECB announced that it would postpone the introduction of mandatory loan-level data reporting requirements to 3 … Continue Reading
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