Financial institutions

Briefings in English - 2010

In August 2009, the Bank of Italy issued new instructions on the determination of the global average rate (TEG) under the usury law (Law No. 108 dated 7 March 1996). These new instructions have modified the categories of financing arrangements and have also eliminated certain distinctions relating to the type of lender granting the relevant financing. (July 2010)

This briefing highlights the increased risk of investigations and enforcement under the US securities and commodities trading laws by the SEC and CFTC against financial institutions and other companies doing business in the United States. This results from the significant expansion of financial incentives for whistleblowers under the newly enacted US financial reform act. (July 2010)

On 7 July 2010, the European Parliament approved various amendments to the Capital Requirements Directive in relation to bankers’ remuneration. The Council of the European Union is expected to rubber-stamp these amendments in the coming days. The European Parliament has described the amendments as ‘some of the strictest rules in the world on bankers’ bonuses’. This briefing examines the new remuneration provisions, their scope and their impact on UK national law. (July 2010)

The Spanish government’s proposed amendments to the Spanish Criminal Code have significant implications for companies doing business in Spain. The amendments impose criminal liability on companies in certain circumstances and, for the first time, classify bribery between individuals as a criminal offence. These amendments will directly affect governance issues within companies, as well as their day-to-day activities. (July 2010)

The Financial Reporting Council (FRC) has published the UK Stewardship Code (the Code), setting out good practice for institutional investors when engaging with the UK listed companies in which they invest. It hopes this will be a catalyst for better engagement between shareholders and companies. The FRC has adopted the Institutional Shareholders’ Committee (ISC) Code with only limited changes – in particular, the ISC Code’s seven principles and related guidance. The FRC encourages all institutional investors to report on the extent to which they follow the Code; it will list those who have done so on its website from October 2010. (July 2010)

The European Commission has published a green paper on a range of options to strengthen corporate governance in EU financial institutions. Some of the green paper’s proposals follow UK best practice, but in other respects it goes much further. This briefing outlines the main points raised. Interested parties wishing to comment on the paper should do so by 1 September 2010. (June 2010)

Anti-bribery and corruption procedures should now be a key area of focus for all financial institutions, given recent regulatory and legal developments. The Financial Services Authority (FSA) has recently published a report that considers the adequacy of commercial insurance brokers’ anti-bribery systems and controls, with particular emphasis on controls to address the risk of illicit payments to third parties. It has expressly stated that many of the issues covered in the report, as well as examples of good and poor practice, are relevant to firms in other sectors. (June 2010)

The UK’s Financial Services Authority has published a consultation paper on proposed changes to its client assets rules. These address some of the problems highlighted by the failure of Lehman, though not all of them. This briefing outlines the client protection issues arising from the Lehman administration and how the consultation paper addresses them. Firms carrying out prime brokerage work in particular should watch these developments closely and be aware that clients are more closely scrutinising their performance in this area. (May 2010)

A new regulatory regime for the European insurance market is due to come into force at the end of 2012 or the beginning of 2013. This new regime, ‘Solvency II’, will replace the current Solvency I regime and will apply to the whole of the European Economic Area. It will have significant implications for insurance and reinsurance companies authorised in other parts of the world. In this client guide we consider those implications. (May 2010)

Bribery and corruption have risen rapidly up the UK political agenda in recent years. The Bribery Act finally looks set to come into force later this year. It repeals existing bribery offences and introduces new ones – including, for the first time, a corporate offence of failing to prevent bribery. In this briefing we consider some of the key issues that arise from the Act as well as some practical steps that corporates may wish to consider taking now to prepare for when the Act becomes law. (May 2010)

This briefing summarises two recent publications by the Financial Services Authority (FSA) in which the FSA proposes that certain changes be made to the Mortgage Conduct of Business Rules (MCOB). The publications are Discussion paper 09/3: mortgage market review and Consultation paper 10/02 – mortgage market review: arrears and approved persons. We discuss the implications of some of the main changes put forward, with a particular focus on how the proposed amendments to MCOB will affect firms’ obligations in respect of the fair treatment of mortgage customers in arrears. (April 2010)

An update on the issues raised in The bank of the future, our report describing the regulatory debate on a number of key areas affecting the banking industry in November 2009. (March 2010)

The Financial Services Authority (FSA) published a consultation paper on effective corporate governance earlier this year. The paper reinforces the FSA’s renewed focus on the quality of firms’ governance and sets out proposed changes to the approved persons regime, the FSA’s expectations in relation to non-executive directors (NEDs) and implementing measures in support of Sir David Walker’s recommendations. This briefing examines the key proposals and their likely impact for firms. (March 2010)

This briefing provides commentary on the Enforcement Financial Penalties Policy Statement (10/4), and outlines the key amendments to the Decision Procedure and Penalties Manual (DEPP) and the Enforcement Guide (EG) that were published by the Financial Services Authority (FSA) on 1 March 2010. Financial penalties will now be linked more closely to any income generated by breaches. The FSA has indicated that the effect of the regime is likely to be that its financial penalties will double or treble in size. (March 2010)

Investment firms have to ensure that their marketing communications are fair, clear and not misleading. On 11 February 2010 the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) published a set of guidelines that will affect marketing by investment firms. (February 2010)

In this briefing we consider, in light of the Financial Services Authority’s enforcement activity in 2009, what the main themes are likely to be for regulatory enforcement in the coming year. (February 2010)

This is an update to our briefing of December 2009, which considered the provisions in the Financial Services Bill relating to collective redress and regulator-led redress. These provisions have now been debated in parliament by the House of Commons Financial Services Bill Committee. This update sets out the key issues raised before the Committee and the government’s response. (February 2010)

The prudential regulation of insurance and reinsurance companies across the European Economic Area (EEA) is due for radical modernisation from October 2012, including a review of the insurance industry’s solvency framework. This follows the adoption in November 2009 of the Solvency II Directive and its publication in the Official Journal. One of the primary aims of the Directive is to produce a more consistent solvency standard that will protect consumers across all markets. This third edition of our client guide outlines progress on the project to date and how it may evolve over the next few years. (February 2010)

The US Bankruptcy Court has issued a declaratory judgment that the relevant clause flipping priority from the swap counterparty to the noteholders constituted an ipso facto provision and was therefore unenforceable – a judgment that produces a different result under US law to that established by the Court of Appeal in the Perpetual Trustee case from November 2009. The court also held that any attempt to enforce noteholder priority would constitute a violation of the automatic stay under the US Bankruptcy Code. (January 2010)

HM Treasury has published a consultation paper setting out tentative proposals for changes to resolution arrangements for investment banks. Responses are invited by 16 March 2010. This briefing outlines the main proposals. (January 2010)

Briefings in Italian - 2010

In forza delle nuove istruzioni dettate da Banca d’Italia nell’agosto 2009 in tema di rilevazione dei tassi effettivi globali medi (TEG) ai sensi della legge sull’usura (legge n. 108 del 7 marzo 1996), sono state modificate le categorie di rilevazione e soppresse talune precedenti distinzioni circa il soggetto finanziatore. (Luglio 2010)

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