In Practice
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ESG: authorities’ potential enforcement action against companies
The environmental regulatory risk landscape is evolving in ways that companies may not yet have considered. It is already well-known that financial regulators are working to protect capital market participants from greenwashing by the adoption of sustainability disclosure standards and the creation of a green taxonomy. Comparatively less attention has been paid to authorities with broad regulatory remits covering most or all sectors of the economy, which are increasingly using their powers to take enforcement action or cause reputational harm in respect of companies who engage in greenwashing. Meanwhile, private actors such as non-governmental organisations (NGOs) with ESG mandates can opportunistically seek to trigger or encourage investigations by such authorities, so as to pressure businesses to change behaviours. In this article, we examine the role of two such authorities: the Competition and Markets Authority and the UK National Contact Point.
25 March 2024The Quincecare duty: 30 years on
In a sign of the times, the first quarter of this year has seen three cases on a bank’s duty to refrain from executing a payment instruction where it has reasonable grounds to suspect the transaction may be an attempt to misappropriate the account-holder’s funds. Until now, in the thirty years since it was first recognised, cases relating to the so-called Quincecare duty have been few and far between. This in itself indicates the narrow circumstances in which the courts have found the duty has not only been breached, but even arisen in the first place.
25 March 2024The Bank of England’s loose understanding of Islamic financial law
In this In Practice article leading UK and international legal authority on Islamic financial law, Dr Lu’ayy Minwer Al-Rimawi, explains how the Bank of England’s webpages need to demonstrate a better understanding of Islamic finance law.
20 March 2024The Draft RTS on ESG disclosures for STS securitisations: a hit or a miss?
Draft technical standards concerning sustainability disclosures aim to make STS securitisations more appealing from an ESG investment perspective. This In Practice article examines the proposed regime and identifies some practical shortcomings.
20 March 2024Recent trends in leveraged financing: the ever more borrower friendly market
In this article the authors examine recent trends in leveraged finance transactions, looking at “Most Favoured Nation” (MFN) protection, dividend to debt reallocation mechanics, ineffective IP transfer prohibitions and super grower baskets/contribution debt baskets.
20 March 2024The “crypto crash”: a catalyst for further crypto litigation?
In recent years, the cryptoasset market has developed rapidly, with market capitalisation for cryptoassets estimated to have been around US$2.6-3trn in 2021.1 The market for decentralised finance (DeFi), although still relatively small, has also expanded quickly from less than US$10bn in 2020 to nearly US$100bn in 2021.2 However, over the last few months the cryptoasset market – specifically cryptocurrencies – has been seeing one of its worst selloffs since a market rally in 2020. This has sparked panic amongst investors, causing substantial financial losses. Inevitably, this has seen a flurry of litigation globally in recent months. This trend is likely to continue. We consider the causes of the crypto crash and the likely litigation risks for financial institutions and advisers.
20 March 2024Recurring revenue-based deals
In this article the authors examine recurring revenue transactions in the UK and European markets – what are they, who are they for, how they work, what are the key features and market trends?
20 March 2024Embedded finance: key considerations for funders of platform borrowers
Embedded finance is, broadly, the availability of financial products, integrated into a company’s infrastructure, provided by non-financial institutions and capitalised by “traditional” financial institutions. Companies are providing these products directly to their own customers, cutting out financial institutions as intermediaries. The benefits of these technology driven products for end-users are efficiency of transactions and bundling complementary services to enhance customer experience (eg point of sale buy-now-pay-later (BNPL) credit).
20 March 2024Intra-group loan agreements: what do finance lawyers need to know?
In the current economic landscape, which is plagued with high inflation and interest rates, the legal agreements covering intra-group loan transactions are being reviewed with a fine-tooth comb from an arm’s length perspective. This is because loan agreements are a starting point for any transfer pricing analysis and if done properly (ie are arm’s length) can assist in justifying interest deduction locally ensuring that there is no, to limited, double taxation. The question is however – what does an arm’s length loan agreement entail? In this In Practice article, we explore this question and highlight the key aspects to consider with their potential repercussions.
19 March 2024“Double materiality”: what does it mean for non-financial reporting?
Companies have been publicly reporting on their financial performance for over a hundred years. However, they are increasingly having to make public non-financial disclosures relating to sustainability and environmental, social and governance (ESG) matters as a result of rules, laws and regulations issued by stock exchanges, governments and regulators worldwide. In the context of non-financial reporting, there has been increasing awareness of the concept of “double materiality” in recent years. In this article we clarify what “double materiality” means and provide the context of its regulatory background within the EU. We also consider the significance of “double materiality” and give our views on the potential consequences for companies of non-compliance.
19 March 2024
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