Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Printer Friendly Version
In News Analysis: After the vote for Brexit—implications for project finance, Philip Vernon, global practice co-head of corporate projects at Ashurst, sets out his view on the short-term and long-term implications for project finance. In particular:
whether there is anything else that project lenders and/or sponsors ought to be thinking about
Delays to settlement in the Loan Market Association's (LMA) secondary loan market remains a significant issue. In News Analysis: Tackling settlement delays in the LMA secondary loan market, Jacqui Allen, partner at Mandel, Katz & Brosnan, considers some of the most frequent causes of delay, and outlines the steps that are being taken to help reduce settlement times.
The Law Commission has published a report recommending that the Bills of Sale Act 1878 and the Bills of Sale Act (1878) Amendment Act 1882 (the Bills of Sale Acts) be repealed and replaced with modern legislation that imposes fewer burdens on lenders and provides more protection to borrowers.
A bill of sale is a document by which a person transfers ownership of goods to another while nevertheless retaining possession of the goods. Most often, bills of sale are used as security for loans. Unlike company charges (which are granted by companies and limited liability partnerships), bills of sale can only be granted by consumers and unincorporated businesses.
Bills of sale granted as security for loans are currently overwhelmingly used for logbook loans. This is where borrowers transfer ownership of their existing vehicle to the logbook lender while continuing to use the vehicle. When the logbook loan is repaid, the borrower regains ownership of the vehicle.
The report outlines the reasons for reform, including:
The majority of the report is given over to detailed explanation of the recommendations. However, the key recommendation of the report is that the Bills of Sale Acts should be repealed and replaced with a new Goods Mortgages Act. The new system would apply in circumstances where: (1) an individual (including in the context of general partnerships and unincorporated associations); (2) uses goods; (3) that the individual already owns; (4) as security for a loan or non-monetary obligation; and (5) retains possession of the goods.
To view the report, click here.
The LMA has produced a note addressing a number of Brexit-related considerations for LMA facility documentation.
The note focuses on:
The note is available on the LMA website to its members. To read News Analysis produced by LexisPSL providing a summary of the note published by the LMA, see: Brexit—how does it impact LMA facility documentation?
The LMA has launched a new recommended form of contractual subordination-only intercreditor agreement for real estate finance transactions (REF Contractual ICA).
The REF Contractual ICA seeks to govern the relationship between two classes of creditor providing finance to the same borrower group in the context of a real estate finance transaction. It does this by ranking the creditors' debt and their entitlements to the proceeds of any guarantees and security and by contractually restricting their behaviour: for example, by controlling when and by whom security might be enforced and when payments can be made by a borrower to a given class of creditor. It was produced in response to demand from members documenting smaller to mid-sized transactions in the regional real estate finance market, who were increasingly seeing loans provided via a combination of senior and mezzanine finance and ranked by way of contractual subordination only and with common security.
The starting point for the preparation of the REF Contractual ICA was the LMA recommended form of intercreditor agreement for leveraged acquisition finance transactions (senior/mezzanine) (the Leveraged ICA). The REF Contractual ICA uses the same boilerplate as the Leveraged ICA and so should be immediately familiar to all users of LMA documentation.
The REF Contractual ICA and the associated user guide are available to LMA members on the LMA's REF microsite (part of the LMA website).
The International Capital Markets Authority (ICMA) has launched a consultation to review and potentially update the ICMA Buy-in Rules under the Secondary Market Rules and Recommendations. This is in response to feedback from members with respect to the efficiency of the existing buy-in process in the current market environment. ICMA has highlighted that it is aware the Central Securities Depositories Regulation (CSDR) (EU) 909/2014 introduces a harmonised buy-in regime across the EU. However, ICMA has emphasised that until then, in the event of settlement fails, the ICMA Buy-in Rules continue to serve as an 'efficient and practical remedy' available to participants in the cross-border bond markets. Among the proposed improvements are:
The consultation closes on 14 October 2016.
For more information on the Buy-in Rules, see ICMA Guidance: Buy-ins how they work and the challenge of CSDR.
The International Swaps and Derivatives Association, Inc. (ISDA) published a new white paper entitled 'The future of derivatives processing and market infrastructure' which provides an insight into the challenges facing market participants across all parts of the derivatives process, and proposes a path forward for developing a system to support the needs of market participants.
The paper focuses on three key areas:
The financial crisis of 2007 exposed significant weaknesses in the resiliency of banks and other financial institutions. As a result of this, the G-20 initiated a reform programme in 2009, including to OTC derivatives. The suggested reforms in 2009 focused on certain OTC derivatives being subject to central clearing and for non-cleared derivatives to be subject to higher capital requirements. In 2011, they added to their reform programme margin requirements for derivatives that were not subject to mandatory clearing. The Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO), in consultation with the Committee on Payment and Settlement Systems (CPSS) and the Committee on the Global Financial System (CGFS), set up a Working Group on Margin Requirements (WGMR) to address this requirement.
The framework set by the WGMR means that firms can use their own internal models to calculate initial margin if those models meet set criteria and have received regulatory approval. However, the risk is that these models will differ significantly between firms and jurisdictions, leading to disputes arising as counterparties may not agree on the initial margin that needs to be calculated. ISDA therefore has developed a Standard Initial Margin Model (SIMM). The ISDA SIMM offers firms a standard methodology to use, thereby reducing the risk of dispute between entities. The aim is for the process of calculating initial margin to be largely standardised, so that less calculations are needed to be made and the calculations can be done consistently.
The ISDA SIMM is available on the ISDA website.
At the Institute of Chartered Accountants in England and Wales' Insolvency and Restructuring Group's roadshow on 22 September 2016, the Insolvency Service said that it was aiming to lay the new insolvency rules before Parliament week commencing 10 October 2016, with a commencement date of 6 April 2017, subject to Ministerial approval. For more information, see the R&I News Analysis: Update to the timing announcement for the Insolvency (England and Wales) Rules 2016.
0330 161 1234