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Welcome to this month’s highlights from the Lexis®PSL Banking & Finance team which cover the key news updates from June 2016.
The full impact of the UK's decision to withdraw from the EU remains to be seen and the EU and UK domestic legal landscape will continue to change throughout the withdrawal process. LexisPSL is reviewing their content on the basis of information available and will keep it under regular review throughout the withdrawal period. In the meantime, our report Continental Shift: Brexit & the Law provides expert guidance on:
In January this year, the International Accounting Standards Board (IASB) released a new accounting Standard IFRS 16—Leases. IFRS 16 is a new accounting standard relating to the accounting treatment of leases. It takes effect from 1 January 2019. For more information, see the News Analysis: IFRS 16—a new lease of life?
The LMA has now incorporated drafting into each of its template facility agreements to address this development. The changes involve:
PDF versions of the facility agreements highlighting the changes are available to members of the LMA on the LMA website.
New rules on keeping a register of persons with significant control (PSC) came into force on 6 April 2016. In News Analysis: PSC register—impact on lenders, Joanna Belmonte, senior associate and professional support lawyer in the banking and finance team at Gateley Plc, considers its potential impact upon lenders. The piece looks in particular at:
the risk of security taken by a lender (particularly any share charge) leading to the lender being considered a PSC
In February 2016, Companies House announced that some of its fees, including its fees for registering security, were to be increased in April. In March 2016, Companies House postponed the implementation of the increase. The increase will now come into force on 30 June 2016. The new fees are as follows:
Details of all the Companies House fees that are changing on 30 June 2016 are available here on the Companies House website.
The Baltic and International Maritime Council (BIMCO) has published three standard novation agreements which provide a legal framework to change one of the original parties to a contract. The first two agreements cover a change of charterer and change of owner under time charter parties. The third agreement deals with a change of buyer under a shipbuilding contract.
BIMCO is also currently updating its widely used SUPPLYTIME 2005 time charter for offshore service vessels and BARECON for the bareboat chartering of a ship.
A copy of the BIMCO press release outlining changes to the documentation is available here.
This case concerned the issue of whether £3.3bn of enhanced capital notes (ECNs) were redeemable, which depended on whether a 'capital disqualification event' (CDE) had arisen, as defined in the terms and conditions of the trust deed relating to the ECNs.
The terms and conditions of the trust deed provided that a CDE was deemed to have occurred if, as a result of any changes to the regulatory capital requirements or any change in the interpretation or application of these by the Financial Services Authority, the ECNs ceased to be taken into account for the purposes of any 'stress test' applied by the FSA in respect of the consolidated core tier 1 ratio.
The Court of Appeal determined in December 2015 that a CDE had occurred and that the ECNs were redeemable. For more information on the decision by the Court of Appeal, see Early redemption of convertible securities.
The ECN trustee appealed the Court of Appeal's decision to the Supreme Court, which this week upheld the decision and dismissed the appeal.
In Supreme Court split on ECN contractual interpretation, Stephen Robbins, of South Square, considers the Supreme Court's decision.
A policy paper setting out the final rules and a supervisory statement created to implement Article 55 of the Bank Recovery and Resolution Directive (BRRD) has been published by the Prudential Regulation Authority (PRA). The rules will come into force on 1 August 2016.
The policy paper provides feedback on responses to the PRA's recent consultation paper, CP8/16, on the contractual recognition of bail-in.
The PRA supervisory statement SS7/16 sets out its expectations for BRRD companies regarding impracticability to do with the contractual recognition requirement and the considerations such companies could take into account when determining impracticability.
A full copy of the PRA policy paper can be viewed here.
A copy of the supervisory statement is available here.
Regulation (EU) 2016/1011 (known as the Benchmark Regulation) relating to indices used as benchmarks in certain circumstances has been published in the Official Journal of the EU by the European Parliament and the Council. It entered into force on 20 June 2016, and will apply in full from 1 January 2018.
A copy of the press release in relation to the Benchmark Regulation can be viewed here.
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