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New originators, are you ready for securitisation?
While securitisations offer numerous benefits, there are a number of important points for originators to consider to facilitate entering into a securitisation transaction and to avoid prolonged legal work further down the line. In this article, we briefly discuss essential points that originators should be aware of and discuss with prospective lenders or arrangers prior to structuring a securitisation.
29 June 2024High Court dismisses unmeritorious “freeman on the land” claims against mortgage lenders
This article considers the recent High Court decision in Stamp and its dismissal of unmeritorious “freeman on the land” claims against mortgage lenders brought by litigants in person. It considers the steps which led to the court’s decision, an analysis of the court’s reasoning and considers the impact it may have for future claims before the court (including the risk of a claimant being in contempt of court).
29 June 2024Strategic secrecy in loan covenant disclosures
Many companies choose not to disclose detailed information about their loan covenants despite regulatory requirements. This article explores the strategic reasons behind this decision, focusing on the potential costs of such disclosure and the implications for financial and regulatory practices. Analysis of a large sample of US loans suggests that companies that likely face tight initial covenants and frequent renegotiations are more likely to withhold these details to avoid negative reactions from other creditors such as trader creditors and bondholders.
29 June 2024Security release filings, a rogue filer and the Economic Crime and Corporate Transparency Act
News broke earlier this year that roughly 800 security release filings, affecting 190 companies, had been fraudulently filed at Companies House, marking the underlying security interests as satisfied when they remained outstanding. New powers given to the Registrar of Companies under the Economic Crime and Corporate Transparency Act 2023 were used to rectify the register. The case shone a spotlight on the vulnerabilities of the system for registering the release of security.
29 June 2024When AI trading bots go rogue, think outside the (black) box
Chatbots have been dominating the headlines with some wildly entertaining reminders of the importance of understanding AI’s limitations. Trading bots deserve some attention too, not least because a lot of trading in financial markets is automated through software programs which could (and in some cases already do) use AI. We have seen cases where deterministic bots have concluded trades in the middle of the night at bizarre prices, or have gone shopping on the dark web and been arrested (confiscated) for doing so. This article swaps out the deterministic bots for AI bots and considers whether conventional legal principles still work.
29 June 2024Electronic trade documents: what is a reliable computer system? and problems in contracting for a “reliable system”: clarification and correction
Paul Marshall offers a clarification and correction to two parts of his recent article of the above title.
28 June 2024Everything settled? Risks for buyers trading on the secondary debt market
Trades on the secondary debt market typically go wrong because the lender is unable to settle the trade satisfactorily. In this article Matthew Watson considers the circumstances in which a selling lender may be unable to settle a trade and the position of the buyer in that event.
28 June 2024Amendments to the Payment Services Regulations to combat Authorised Push Payment Fraud
The Treasury has announced its intention to amend the Payment Services Regulations 2017 (PSR). As a means of combatting authorised push payment (APP) fraud, banks will be given the power to delay the transferring of funds where they have established that there are reasonable grounds to suspect that the payment order has been placed subsequent to fraud or dishonesty. When utilising this discretion, they must inform their customer, who can then decide whether to rescind their instruction. Although the new power may prevent many instances of fraud, it is not without its problems, and this article discusses six sets of issues.
28 June 2024Shortening the settlement cycle to T+1: not if but when
This article introduces the policy debate as regards a further reduction of the settlement cycle. The US has moved to T+1 in May 2024, with the UK and EU making plans to follow suit.
28 June 2024The new pre-pack regulations and the impact on secured lenders
If secured lenders (who fall within the definition of connected persons) and their advisers engage the evaluator prior to the commencement of administration and ensure open communication lines among themselves, the evaluator and the would-be administrator then the goal of increasing transparency in the pre-pack process would likely be advanced in a manner consistent with the efficient execution of a pre-pack sale.
13 June 2024
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