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Saying how versus saying what: the choice of regulatory style in margin policy
Mandatory margin posting on derivatives portfolios is one of the key elements of post-2008 derivatives policy. Margin requirements are often calculated using risk-based models. These models typically require more margin when markets are more stressed. This can create liquidity burdens on market participants just when they are hardest to meet. There are two main approaches to addressing this: requiring that particular tools to reduce variability are incorporated in all margin models; or placing limits on the variability of margin regardless of how it is calculated. This choice is practically important and leads to insights on differences in regulatory style.
25 March 2024Foreign financial crises and the consumer
This article considers two recent cases involving claims against Lebanese banks by claimants wanting to withdraw foreign currency and seeking to invoke the special regimes for consumers that apply in relation to: (i) jurisdiction; and (ii) applicable law. In the first case, Bitar v Banque Libano-Française SAL [2021] EWHC 2787 (QB)(Bitar), the court considered the question of jurisdiction. In the second case, Khalifeh v Blom Bank SAL [2021] EWHC 3399 (QB) (Khalifeh), the court considered the question of applicable law.
25 March 2024Prudential consolidation under the IFPR: making sense of the ancillary services undertakings concept
In this article, Andrew Henderson considers the concept of “ancillary services undertakings” under the new UK Investment Firms Prudential Regime (IFPR) and the UKCRR for banks. He argues that draft European Banking Authority Guidance is useful in delineating the limits of the concept and highlighting the reason for including or excluding entities within a consolidation group.
25 March 2024Interpreting statutes and contracts: what are the differences? Part II
In the first part of this article ((2022) 3 JIBFL 192), it was suggested that the basic principles of interpretation are common to all types of legal texts but that the different nature of statutes and contracts means that the application of those principles can differ depending on whether the instrument concerned is a contract or a statute. The first of those differences concerned the identification of the text itself: the text of a statute is easier to establish than the text of a contract.
25 March 2024Synthetic Securitisation made simple: the EU STS securitisation framework embraces synthetic securitisation
In this article, Timothy Cleary analyses the new EU STS framework for synthetic securitisation and comments on its implementation and implications for the UK.
25 March 2024Delegation not abdication: directors’ duties under scrutiny in syndicated loans
In syndicated lending it is common for lenders to delegate functions to an Agent and equally common for companies within a group to authorise the parent to act on their behalf. That has ramifications for the directors of the delegating companies – and for the directors of the delegate. This article considers the issues which may arise.
25 March 2024Direct Lending in a distressed world
In this article the authors consider what makes funds behave differently to banks in a distressed scenario and some specific issues faced by funds.
25 March 2024Secondary obligations and disguised penalties: where does the law stand following Makdessi?
In the joined appeals of Cavendish Square Holding BV v Talal El Makdessi, ParkingEye Limited v Beavis [2015] UKSC 67; [2016] AC 1172 (Makdessi), the Supreme Court reformed the modern penalty clause doctrine, including by emphasising that it is available only in relation to secondary obligations, which must be classified as a matter of substance not form. This article considers this threshold test and the issue of so-called “disguised penalties” in English law following that decision.
25 March 2024Knowing receipt and the proprietary base: Part II
In Byers v Samba Financial Group [2021] EWHC 230 (Ch), Fancourt J held that a knowing claim could not be maintained against a knowing recipient where the claimant’s proprietary interest had been extinguished by or before receipt. The Court of Appeal has now affirmed that decision: [2022] 4 WLR 22. The court’s reasoning helpfully elucidates the theoretical basis of knowing receipt-based liability (appearing to espouse a property-based theory), but risks significantly curtailing the remedies available to beneficiaries in cases involving trust assets located abroad.
25 March 2024Inside the machine: the European Commission’s proposed consolidated tape for bonds
The author considers the origins, purpose and implications of a very particular machine – the European Commission’s proposed “consolidated tape” for bonds.
25 March 2024
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