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Regulating the distributed ledger: the EU’s attempt
In this article, barrister Richard Nowinski considers some of the shortcomings of the EU’s attempt to regulate distributed ledgers.
29 May 2024Where’s my share certificate? Taking security in an electronic world
There is no escaping electronic documents on today’s banking and finance transactions. Just as the COVID pandemic accelerated the use of electronic signatures, the number of original documents that exist solely in electronic form has increased too. But one thing that has not changed are the delivery requirements under security documents. Stephan Smoktunowicz examines what this means for share security and whether paper deliverables are now a thing of the past.
29 May 2024Calling it in: the implications of the new National Security and Investment Act 2021 on financing transactions
On 29 April 2021 the National Security and Investment Act 2021 (NSIA) received Royal Assent. When it comes into force fully on 4 January 2022, it will permit the government wide ranging powers to impose remedies on, or even block, certain transactions on the basis of national security. Whilst most relevant in an M&A context, the legislation does introduce a number of implications for financing transactions which are discussed below.
29 May 2024Custodianship: why do EU civil code states not trust the trust?
This article deals with the custodianship of securities in civil code states in the EU – all of them except Ireland and Cyprus. Common law jurisdictions all recognise universal trusts over all assets present and future but most civil code states do not. Instead they either have limited special trusts and, if not, various other devices. The question is whether these are adequate to safeguard client assets against the creditors of the custodian. This article will be followed later by one or more articles by lawyers in selected EU jurisdictions specifically discussing their solutions to the problem.
29 May 2024SPACs in the City: the emerging litigation and regulatory risks in England and Wales
SPACs scorched the US stock markets last year, with the UK left out in the cold. While the recent crackdown by the Securities and Exchange Commission (SEC) is cooling investor interest in the US, the UK regulators are hoping that changes to the regulatory framework will bring some SPAC sunshine to this side of the Atlantic. But what are the potential regulatory and litigation risks for SPACs in the City?
29 May 2024Possessable or non-possessable? OBG v Allan and the future of intangibles
The case of OBG v Allan [2007] UKHL 21 in the House of Lords discussed expanding the tort of conversion to things in action but considered it at para 321 to be “too radical” and that there was a clear distinction to be drawn between the “wrongful taking of a document … and the wrong assertion of a right to a chose in action”. In this article the author explores the position of intangibles such as digital assets in relation to being property and thus possessable.
29 May 2024When private equity met private debt: conflict management in a multi-strategy world
As the prominence of private debt steadily increases within the alternative assets universe, there are an increasing number of PE firms and other financial institutions expanding their product lines to include a credit arm. At the same time, private debt fund sponsors are differentiating their investment focus within the debt space and in certain cases moving into private equity as well. Regardless of the starting point, expansion by a private fund manager into multiple investment strategies presents a number of potential conflicts of interest that require careful consideration and management.
29 May 2024Why intermediated securities should be brought within scope of the expanded Dormant Assets legislation
In this article the authors set out an overview of the proposed expansion of the Dormant Bank and Building Society Accounts Act 2008 and a critical examination of the possible reasons for leaving intermediated securities out. They argue that bringing intermediated securities within scope of the legislation would reflect the operational reality of how UK public securities are held, maximise the legislation’s impact, and could generally be done without too much conceptual difficulty.
28 May 2024Passing regulatory headwinds for a flourishing European CLO market
2020 was a relatively slow year for what had been a booming CLO market, with the initial stages of the pandemic resulting in a short-term dip in perceived corporate debt value and a reluctance of investors to deploy capital ahead of the implementation of state-led recovery packages. 2021 has been starkly different, with issuance volumes in the European CLO market set to potentially match or exceed those achieved in 2018 and 2019.1 Whilst the market flourishes, behind the scenes market participants have had to grapple with an ever-evolving regulatory environment. In particular, sell-side market participants must determine how to adapt and evolve to achieve the best overall results for their investors across the capital structure, many of whom are placing increased emphasis on more sustainable investment strategies. A few of the key current topics are considered herein.
28 May 2024Central Bank Digital Currencies
Digitalisation has reached the shores of central banking. Central Bank Digital Currencies (CBDCs) are the public response to privately issued virtual currencies, of which Bitcoin was the pioneer. In this uncharted territory, central banks face a multitude of design choices – “account-based” or “token-based”, offered to the general public or only to a selected group of users – which raise unprecedented legal questions. Entering the digital arena bears great potential for monetary policy as well as risks for the financial system. Finding a balance for each jurisdiction and monetary system will be a key task for central banks in the 21st century.
28 May 2024
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