Banking & Finance Update – Q1 2021

Banking & Finance Update – Q1 2021

 

As part of our sector-focused series, we have curated the key resources and points you need to know from the legal updates produced during the fourth quarter of 2020. Understand the key news stories, practice notes, timelines and upcoming webinars specific to the Banking & Finance sector.

 

Keeping up to date: December monthly highlights

 

We publish monthly news highlights on our blog. December’s highlights include updates on Brexit, LIBOR, COVID-19 and regulatory developments.  

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Drafting for Brexit in finance documents

 

Butterworths Journal of International Banking & Finance Law: At 11pm GMT on 31 January 2020, the UK ceased to be a member of the EU and a transition period came into effect. For the duration of the transition period, EU law continued to apply to the UK and the UK continued to be treated as if it were still an EU member state. While this had delayed the effect of Brexit, the transition period came to an end at 11pm on 31 December 2020 (IP completion day) and the UK became a third country under EU law. At the end of the transition period, a body of retained EU law was created in the UK which is based on the EU law that applied to the UK prior to that date. This raises the question of how to draft for Brexit in finance documents after IP completion day and what documentary changes are necessary to address the UK's departure from the EU and the creation of retained EU law. In this Spotlight article, Avril Forbes, a professional support lawyer in Clifford Chance LLP's banking and finance practice based in London, considers EU legislative references, construction clauses, bail-in clauses and jurisdiction clauses.

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Brexit ‘how to’ guide—your research queries answered

 

Public Law analysis: We have collated your frequently asked questions on Brexit-related research into a quick reference Brexit ‘how to’ guide.

Questions covered in the guide include:

  • how do I find the latest Brexit updates?
  • how do I find information on the impact of the end of Brexit transition period?
  • how do I find out if a piece of legislation is impacted by Brexit?
  • how do I know if a piece of EU legislation is retained in UK law?
  • how do I get in touch if I cannot find or access what I am looking for?

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Comment—Relieved? UK and EU agree post-Brexit deal

 

Public Law analysis: On 24 December 2020, after roller-coaster negotiations, the UK and the EU announced they had agreed a post-Brexit ‘EU-UK Trade and Cooperation’ Agreement. The EU-UK Agreement provides for zero tariffs and quotas. It represents a fundamental shift in the EU-UK relationship with substantially reduced market access but greater UK autonomy. Phillip Souta, head of UK Public Policy at Clifford Chance examines what it covers, what it doesn’t, and what happens next.

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Consultation on LIBOR cessation – what is the impact on transition timing?

 

Banking and Finance analysis: This News Analysis looks at the implications of ICE Benchmark Administration’s (IBA’s) consultation on potential cessation of LIBOR, published in December 2020.

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Loan Market Association revised rate switch agreements – what’s changed?

 

Banking & Finance analysis: This News Analysis provides a summary of the key ways in which the rate switch agreements published by the Loan Market Association (LMA) in November 2020 differ from the initial draft published by the LMA in September 2020.

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Brexit focus - commercial and practical help

 

The Brexit transition period came to an end at 11pm on 31 December 2020, marking IP completion day in the UK. The immediate impact and ongoing complications bring up a significant number of issues, and so, we have a number of resources giving you the need-to-know information:

 

1. Brexit toolkit

Our Brexit toolkit draws together Brexit content for the practice areas that are relevant for you.

Brexit toolkit

 

2. Brexit - Statutory Instruments (SI) tracker

This tracker lists all Brexit-related financial services statutory instruments (SIs), together with explanatory memoranda and other information for each SI, as well as links to primary sources.

Brexit—Financial Services—Statutory Instruments (SI) tracker.

 

3. The impact of IP completion day

The following Practice Notes consider the impact of IP completion day for those working in the Banking & Finance sector:

What does IP completion day mean for lending lawyers?

What does IP completion day mean for DCM lawyers?

What does IP completion day mean for derivatives lawyers?

 

LIBOR focus – commercial and practical help

 

LIBOR obviously remains a key focus for many in-house Banking & Finance lawyers. Our Practice Notes and tracker will help you to keep up to date with the development of alternative RFRs and plan for a smooth transition away from LIBOR.

LIBOR transition—glossary and quick reference guide - aims to assist with understanding the LIBOR transition terminology, putting it in context, and finding more detailed information quickly and easily.

LIBOR transition - provides information on the transition away from LIBOR and other IBORs towards using risk-free rates, including a detailed discussion on the specific issues for the loan market, derivatives market, and debt capital markets of adoption of risk-free rates. It also provides a glossary of key terms such as IBOR, SONIA, fallbacks and conventions.

LIBOR developments tracker - sets out developments relating to the transition away from LIBOR to risk-free rates. It covers developments relating to each of the LIBOR currencies: Sterling, US dollars, Swiss Francs, Japanese Yen and Euros, as well as developments relating to the transition from EONIA to €STR. It also contains section on regulatory updates, cross-currency updates, future developments and next steps to look out for.

Running a LIBOR transition project - provides a starting point to assist firms with planning and implementing a London Interbank Offered Rate transition project. It discusses key issues raised by UK regulators and includes a checklist setting out a number of key LIBOR impact areas that firms will need to investigate and address as well as points to consider when doing so.

LIBOR transition quick guide—legislative proposals on tough legacy contracts – provides focused information on the legislative proposals for addressing the issue of tough legacy contracts in the context of LIBOR transition. It summarises the legislative proposals for the UK, US and EU and includes a key points comparison table. It also discusses to what extent the proposals may address the tough legacy issue and how they may interact with each other.

 

Covid-19 toolkit & blog

 

The coronavirus continues to pose significant issues for business of all kinds across the globe.

The Covid-19 toolkit has been created to provide in-house lawyers or legal advisers with easy access to news, practical guidance and Q&As from across a number of Lexis®PSL Practice Areas (subject to subscription) that relate to these key areas of concern.

In-house lawyers at financial institutions may find the following resources particularly helpful:

We also cover the implications for various finance transactions types in standalone Practice Notes, links to which can be found in the Coronavirus (COVID-19) and Banking & Finance—overview.

Not a subscriber to LexisPSL? See the free resources and information on our Covid-19 blog.

 

Keeping up to date

 

Key dates you need to know, publications and announcements relating to legal issues in Banking & Finance are also covered within LexisPSL.

Click to view trackers, timelines and practice notes in the following topic areas:

Hot topics for Banking & Finance lawyers

Banking & Finance case tracker

LIBOR developments tracker

Sustainable finance – recent news

Key developments relating to securities lending and repos—timeline

Key developments relating to CCPs—timeline

Covered bonds—timeline

Banking & Finance – key dates and future developments tracker: 2020 and beyond

Weekly highlights

Not a subscriber to Lexis®PSL?  For a free trial click here.

 

Useful resources

 

Banking & Finance—new starter guide

New Banking & Finance content

Banking & Finance Q&As – overview

Banking & Finance—checklists and flowcharts

Banking & Finance forms and precedents

Banking & Finance specific cross border resources (Europe, Americas, Asia-Pacific and Africa)

Getting the Deal Through guides

Banking & Finance resources in Lexis®Library

Lexis®PSL Banking & Finance blog

Banking & Finance—Meet the Experts

 

Industry body trackers

 

LMA – latest news on documentation

ISDA – latest news on documentation

ICMA – latest news on documentation

FIA—latest news on documentation

 

Content specific to in-house lawyers

 

In Banking & Finance, we have a dedicated topic for in-house banking & finance lawyers, helping you to navigate the intricacies of working in-house.  Useful resources include:

 

Checklists

 

Busy in-house lawyers often want to use checklists to ensure that they have ticked off what they need to do on their legal matters.  In Banking & Finance, we recognise that in-house lawyers juggling multiple matters often benefit from checklists to ensure that the important points have been covered off.  To that end, in LexisPSL we have checklists covering an array of issues, including, for example:

Banking & Finance—checklists and flowcharts

Amending a facility agreement – checklist

Drafting a confidentiality agreement (disclosing party) – checklist

Reviewing a confidentiality agreement (reviewing party) – checklist

Brexit checklist –finance documents

Checklist for reviewing a foreign law opinion

Intercreditor checklist – senior lenders

Intercreditor checklist – junior lenders

Prospectus Regulation – debt capital markets checklist

Agreeing engagement terms with external law firms – a checklist for in-house banking & finance lawyers

 

P.R.I.M.E. Finance collaboration

 

We are proud in LexisPSL to support and work with P.R.I.M.E. Finance, whose mission is to ensure that the best expertise is available for the settlement of complex market disputes. As part of this, we are supporting P.R.I.M.E. Finance with its virtual conference programme.

Please sign up for these free events here.

The past P.R.I.M.E. Finance events are available for viewing for LexisPSL Banking & Finance subscribers here. Topics covered include:

  • Insolvency and Business Rescue in a pandemic
  • Sustainability in a pandemic
  • Dispute resolution in a pandemic
  • Financial regulation in a pandemic

 

Webinars

 

You can also sign up to upcoming and on demand webinars in the LexisPSL library. Upcoming topics in 2021 include:

  • Smart derivatives
  • Structured products and securitisation
  • Sustainable finance
  • LIBOR transitions

Sign-up to upcoming and view on demand:

Banking and Financial Services

 

Get connected…

 

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LexTalk® is a new online community forum which gives LexisPSL subscribers the opportunity to post questions, hold conversations, participate in discussions and share best practice. It has been designed to provide a secure place for legal professionals to discuss legal developments, offer and receive peer support, and gain a sense of up to date market practice and advances in real-time. You can access and post questions on all of the dedicated practice area forums, including a dedicated community for LexisPSL Banking & Finance.

Click here to sign up and meet like-minded community members, create a profile, connect, share, and start participating today! Alternatively, you can access LexTalk® on the key resources tab on the Banking & Finance home page.

 

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About the author:

Neil specialises in banking and asset finance transactions with a particular emphasis on shipping finance, aviation finance, renewable energy finance and in providing corporate finance transactional support. Neil qualified as a solicitor with TLT in 2004 and worked as a finance solicitor in both the Bristol and London offices before joining the asset finance team at DLA Piper.