Banking & Finance—H1 2018 round-up: key legal and market developments

Aviation finance

The key developments in aviation finance in H1 are:

• EU Regulation (EU) 2017/2392 was implemented so as to continue current limitations of the geographical scope for aviation activities and to prepare to implement a global market based measure from 2021. These changes came into effect on 31 March 2018

• results from two consultations on the EU emissions trading system 2018 showed broad support for compliance with the EU Emissions Trading System (ETS) 2018; and the consultation on proposed amendments to the aviation EU ETS legislation found that all respondents either agreed with the government approach or said they welcomed the EU agreement to continue the current scope of the aviation EU ETS, which is being implemented through the UK regulations

Benchmarks

Discussions, consultations and analysis on benchmarks and, in particular, the move away from LIBOR have continued in H1 2018:

• in News Analysis: Replacing LIBOR: current position and implications for loan agreements, we summarise the current work being carried out by a variety of bodies related to the possible replacement of the London Interbank Offered Rate (LIBOR) as a benchmark rate in finance documents across a range of markets and some implications for loan agreements

• the Financial Conduct Authority (FCA) issued a policy statement (PS18/5) setting out the approach, criteria and methodology that it proposes to apply if it needs to use powers to compel banks to contribute to LIBOR. The policy statement is primarily relevant to banks that are current or potential submitters to LIBOR, and the administrator of LIBOR, ICE Benchmark Administration Limited (ICE)

• ICE launched a consultation (now ended) on a draft revised code of conduct for LIBOR, setting out