Read time: 3 minutes
Over the last few years, the consideration of Environmental, Social, and Governance (ESG) factors have grown in importance when it comes to investment decisions, with ESG ratings serving as a critical benchmark for investors seeking sustainable and ethically sound investment opportunities. However, the reliability of these ratings has come under scrutiny
Current need and opportunities
The International Finance Corporation (IFC) and the Emerging Africa Infrastructure Fund recently co-invested in a US$97.6 million social bond issuance to support access to electricity in Ivory Coast. African countries, however, need around US$28 billion of investment each year for the next seven years if they are to meet the ‘Access
Firms regulated by the Financial Conduct Authority (FCA) are expected to take on a stewardship role in delivering sustainable economic growth, which will benefit UK consumers and businesses in all regions. Both the UK government’s Transition Plan Taskforce and the FCA have recently shared content on putting together a blueprint to ensure this
Read time: 2 minutes 50 seconds
Over the summer, the Reserve Bank of India (RBI) issued a notice to banks and other RBI-regulated entities, emphasising the need to speed up the transition away from LIBOR. The RBI notice states that banks and financial institutions should not enter into any new LIBOR-related contracts after 31 December
Read time: 2 minutes 40 seconds
The FCA announced on March 5, 2021 the future cessation and loss of representativeness of the LIBOR benchmarks. This news was expected, but its comprehensiveness is very welcome.
As a result, December 31, 2021 will be the last day on which all euro and Swiss franc LIBOR tenor settings
Read time: 4 minutes 50 seconds
As well as ringing in the start of a hopefully brighter and better 2021, January also saw Indian banks testing the waters of LIBOR transition, with State Bank of India and ICICI Bank involved in their first alternative risk free rate transactions. Utilising the US dollar Secured Overnight Financing
Read time: 5 minutes 45 seconds
The Financial Conduct Authority (FCA) is to be given new powers to make changes to the methodology of LIBOR for certain “tough legacy” contracts.
The UK Government has announced that it intends to bring forward legislation amending the Benchmarks Regulation 2016/1011 as amended by the Benchmarks (Amendment) (EU Exit) Regulations 2018, which would provide the FCA greater powers in relation to benchmarks (such as LIBOR) recognised as “critical”, in situations where these benchmarks are no longer representative and will not be restored to representativeness.
Continue Reading The British Government is giving the FCA new powers to deal with tough legacy – are they actually going to help?
Read time: 2 minutes 45 seconds
In these uncertain times, we take a look at the potential implications of COVID-19 on the LIBOR transition, currently scheduled for the end of 2021.
The anticipated impact of COVID-19 on the LIBOR transition can be divided into two parts. There is the immediate and operational effects that the virus will have on banks’ transition timeline, and there is the longer-term structuring implications that this period of uncertainty will create. There is also the question as to whether 2021 will remain the deadline for the transition.
Continue Reading COVID-19: impact on the LIBOR market and 2021 transition
Read time: 30 seconds
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
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 busy implementing their client outreach programmes whilst we were busy putting out client alerts and blogging about the new requirements under EMIR. We continue to help clients with their questions on this significant change to the EU regulatory landscape.
Two aspects of the new trade reporting regime in particular repay some close attention to avoid potential trip-ups. First, the rules relating to what has been termed ‘backloading’, or, in other words, the requirement to transaction report historic trades. After some uncertainty in the lead up to implementation, the requirements are now clearer. Broadly, counterparties need to ensure that all historic trades that were either ‘live’ on 12 August 2012 (the date EMIR came into force), or subsequently became live prior to 12 February 2014 (the date the reporting requirements came into force), are reported. For these trades, the deadline for reporting will range from just one day to a period of three years after the reporting obligations became effective, depending on the date of the trade and, if applicable, its termination date. Our client alert sets out these timeframes in more detail.