Feature

Welcome clarification from the DIFC Court on the amendments to the UAE Federal Banking Law

In this article, Zoe O’Sullivan reviews the recent decision of Punjab National Bank v Shetty (CFI No. 079/2020, 19 January 2024) issued by the Dubai International Financial Centre (DIFC) Court (and comments on its implications for financial institutions established in the DIFC).

Decentralised finance (DeFi): a game-changer or just a passing fad?

DeFi is a term used to describe decentralised applications that provide financial services using blockchain technology. DeFi leverages on technologies such as smart contracts and open-source protocols to execute peer-to-peer transactions without the use of any centralised party. Given the increasing prevalence and receptiveness towards DeFi, stakeholders in the financial industry should possess some basic understanding of this new alternative to the traditional financial system. This article outlines the distinctive characteristics, underlying benefits and risks of DeFi applications, and the regulatory approaches towards regulating such applications.

A review of private credit in the immediate wake of COVID-19

In the aftermath of the global financial crisis, private credit institutions emerged as being able to offer flexible financing solutions on short timeframes when compared to more heavily regulated banks. Traditional bank lending inevitably had slower processes and more limited scope to support nuanced credits. The strengths of the private credit model may well permit those institutions to advance their position further in the post-pandemic landscape. Whilst all private credits funds have as their objective a strong economic return, the context of each investment will determine the optimal approach each institution will employ to achieve that result.

The Lehman litigation: the waterfall keeps falling

In Lehman Brothers Holdings Scottish LP 3 v Lehman Brothers Holdings Plc (In Administration) [2021] EWCA Civ 1523, the Court of Appeal determined the priority of competing subordinated claims over the £800m to £1bn available in the distributing administration of LB Holdings Intermediate 2 Ltd and considered the common law position regarding part payment of a debt by a surety, as well as the rule against double proof.

Please release me, let me go: complexities in release provisions

Hedging risk-free rates

Creditor beware: proving for debts in limited recourse loans following Lendy

Converting fiat money into cryptoassets over a blockchain: what new laws and regulations are required?

When real money is converted into cryptocurrencies, such transactions do not fit into established financial services regulation. This is the case whether analysing the UK, Sweden, Singapore or any other leading FinTech jurisdiction. After clarifying the difference between fiat money and cryptoassets, this article explains why distributed ledger technology (DLT) does not fit into existing regulations, such as MiFID governing trading venues. Nor do other existing financial regulations sufficiently protect consumers. Alternative solutions are proposed in the form of new financial services law focused on crypto exchanges, DLT and wallet providers.

SFDR Commission Q&As: more Qs than As

On 26 July 2021, the European Commission published Q&As under the EU Sustainable Finance Disclosure Regulation (SFDR) with the aim of clarifying certain aspects of the regime. However, as we consider below, the Commission’s feedback in the Q&As has given rise to more questions than answers.

Shanghai v Reignwood: what makes a guarantee “on demand”?

Guarantees are essential features of commercial financing transactions. But the nature of the guarantor’s liability may vary significantly. Is the guarantor liable only when the underlying obligor has defaulted on its obligations (a “see to it” guarantee) – or as soon as the guarantee’s beneficiary makes a good faith demand (an “on demand” guarantee)? Shanghai v Reignwood [2021] EWCA 1147 (Court of Appeal) illustrates the importance of the distinction, and how it can turn on fine points of construction.