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Briefings in English - 2008

An overview of the Lehman Brothers minibonds saga

In the wake of the collapse of Lehman Brothers, so-called ‘minibonds’ have caused a great deal of controversy in Hong Kong. Questions have been raised over the sales and marketing practices of distributors and whether complex structured products are appropriate for the retail market. In this briefing we summarise the principal characteristics of the minibond products, describe the recent regulatory investigations into whether misselling occurred and identify issues that financial institutions should take into account when reviewing their selling practices. We also discuss potential tortious liability arising from misselling practices and likely future developments in this area. (16 December 2008)

2009 Listing Rule amendments - how will they affect you?

On 28 November 2008, the Hong Kong Stock Exchange issued the conclusions to its Combined Consultation Paper on Proposed Changes to the Listing Rules. It also set out amendments to the Listing Rules to implement the proposals, which will come into effect on 1 January 2009. This briefing discusses the three main areas in which the amendments will significantly affect listed companies, directors, company secretaries and professional advisers: extension of the blackout period; removal of the requirement for a qualified accountant; and pre-vetting of documents. (December 2008)

A rethink of capital requirements for Asian banks?

The current financial crisis has placed pressure on banks in the US, Europe and the Asia Pacific region to review the structure of their businesses as well as their compliance with global standards. Given the nature of the financial crisis and the risks it has highlighted, one of the key compliance issues to be addressed by regulators and banks is the level of capital reserves that banks should be obliged to keep. This briefing brings into focus this particular element of the suite of regulatory conditions that banks may be required to satisfy in order to weather the present storm. (November 2008)

Financial sector acquisitions in the EEA

The Acquisitions Directive was adopted in September 2007 and is due to be implemented in member states by 21 March 2009. This briefing examines key aspects of the Directive and its likely effects on the UK regulatory regime. (November 2008)

Amendments to administrative fines under the FIEL

Amendments to the Financial Instruments and Exchange Law (FIEL) enacted in June 2008 are due to be implemented by 12 December 2008. This briefing summaries how these amendments relate to administrative fines. (November 2008)

Warning and guidance from Hong Kong Stock Exchange on disclosure obligations

On Friday 31 October, the Hong Kong Stock Exchange gave substantial interpretive guidance and observations on listed issuers' disclosure obligations under the Listing Rules. This briefing summarises the key points.

Netherlands anti-money laundering rules explained

For many years, EU legislation has required member states to adopt rules to prevent financial institutions from being used as instruments for money laundering. Under these rules, financial institutions must verify their clients’ identities and notify the authorities of any transactions in which money laundering is suspected. This legislation was expanded so that the verification process also applied to legal professionals, accountants and estate agents. Recently, legislation about money laundering was again revised in various EU member states on the basis of the Third Anti-Money Laundering Directive. This briefing looks at its effects in the Netherlands. (October 2008)

New Japanese Insurance Law

Japan’s new Insurance Law was enacted in May 2008. It replaces the Insurance Chapter of the Commercial Code and will be fully implemented on or before 5 June 2010. (October 2008)

Hong Kong and China stand out in short-selling developments

In spite of the recent expiry of the US’s dramatic ban on short-selling financial stocks, a number of other countries that have similarly clamped down on the practice are maintaining their bans. In stark contrast to these bans, Hong Kong has adopted a more low-key approach to short-selling and China has been planning to introduce the practice. This briefing provides a round-up of recent developments concerning short-selling regulations. In particular, it examines why Hong Kong and China have adopted a different approach. (October 2008)

Systems and controls and remuneration policies

This briefing provides commentary on the ‘Dear CEO’ letter on remuneration policies published by the Financial Services Authority on 13 October 2008. It discusses the implications of that publication and the changing regulatory environment generally in the light of the requirement to maintain appropriate systems and controls. (17 October 2008)

The draft Payment Services Regulations 2008

The government has published for consultation the draft Payment Services Regulations 2008, which will implement the Payment Services Directive in the UK. The UK is proposing to adopt a copy-out approach to implementation of the Directive, which makes it all the more important for the industry to take the opportunity to engage with Treasury to try and resolve the issues inherent in the Directive. However, as for the most part the Directive is a maximum harmonisation directive, there is no doubt that, despite the UK’s best efforts to clarify those issues, the industry will be left with some interesting challenges in complying with the Regulations. This briefing is intended to guide readers through some of those challenges. (September 2008)

Variable annuities to take off in Hong Kong

As Asia’s population becomes older and wealthier, people are increasingly reliant on access to market returns to help them keep pace with inflation and to protect their lifestyles. Variable annuities more successfully meet this need than do traditional insurance products. This briefing explains what variable annuities are, why they are likely to be increasingly popular in Hong Kong and how insurers can reduce the risks involved. (September 2008)

Proposed restrictions on foreign investments in Germany passed by German Government

The German Government passed a proposed amendment to the Foreign Trade Act on 20 August 2008. The amendment intends to control acquisitions of resident companies by investors based outside the EU and EFTA. (September 2008)

Data security in financial services

The protection of customer data is a key area of focus for the Financial Services Authority (FSA). In this briefing we consider the lessons that firms can learn from recent regulatory actions against firms for data security breaches and some practical ways that firms can improve systems and controls in the light of the FSA’s recent report on data security. (September 2008)

Transparency as a regulatory tool

The FSA has published a discussion paper entitled Transparency as a Regulatory Tool, which sets out the FSA’s plans to change the way in which it discloses information about itself and the firms, products and markets that it regulates. In this briefing we look at the FSA’s proposals and their broader context, as well as the specific issues arising from the proposals. (August 2008)

Insurance and reinsurance news

Systems and controls issues in the insurance sector: senior management responsibility.(September 2008)

Changes to the Capital Requirements Directive

The European Commission has launched a public consultation on possible changes to the Capital Requirements Directive (CRD). The proposed changes partly reflect a response to the credit market crisis, but they are also the result of work that has been in progress for some years. Substantively, they are largely based on advice from the Committee of European Banking Supervisors (CEBS).The final Commission proposal is expected to be put to parliament in September 2008 and adopted in the first half of 2009. (July 2008)

Covered bonds technology: an alternative to existing financing and refinancing techniques

Covered bonds technology: an alternative to existing financing and refinancing techniques. This chapter first appeared in Global Securitisation and Structured Finance 2008, published by Globe White Page Ltd. (June 2008)

Corporate finance communications under the MiFID conduct of business rules

The purpose of this note is to explain why we believe that the client communication rule does not generally apply to corporate finance communications that are exempt from the financial promotions requirements and why, therefore, MiFID has changed very little in this area. (May 2008)

The Carbon Principles

The adoption in February of the Carbon Principles by major US banks Citi, JPMorgan Chase and Morgan Stanley indicates a growing willingness among financial institutions to look beyond their own companies’ environmental impact and consider the social and environmental effects of the projects they finance. Whether their adoption materially affects credit decisions remains to be seen, but with Bank of America adding its name to the list of signatories on 1 April the Carbon Principles seem to be gathering momentum. (May 2008)

To remit or not to remit – part 3?

The House of Lords has ruled that English assets of the HIH group of companies are to be remitted to the Australian liquidators for distribution under Australian law. This briefing discusses the background to McGrath and another and others v Riddell and others [2008] UKHL 21 and the implications of the ruling. (April 2008)

Treating customers fairly

Ensuring effective, industry-wide implementation of a policy of treating customers fairly (TCF) was a focus of much of the FSA’s work in 2007 and this will also be the case in 2008. Notably, in November 2007, the FSA published a report entitled Treating customers fairly: measuring outcomes reporting on its assessment of industry performance on TCF. The following month, the FSA issued a press release announcing that firms were not doing enough to ensure that their appointed representatives were treating customers fairly in the sale of general insurance, mortgage and investment products. (March 2008)

The Financial Ombudsman Service under review

The deadline for submissions to Lord Hunt’s review of the Financial Ombudsman Service passed in the middle of January. We have submitted a paper to the Review, which tackles an important issue affecting all users of the service. This briefing summarises the issues raised in our paper and the key areas for debate within the industry. (February 2008)

The FSA’s new rules for non-investment insurance

The Financial Services Authority has adopted a new set of rules and guidance covering the sale and administration of non-investment insurance. The rulebook, New Insurance Conduct of Business Sourcebook (ICOBS), came into force on 8 January 2008. Regulated firms that are complying with the old rulebook (ICOB) have until 8 July 2008 to comply with the new rules. (February 2008)

Significant amendments to the German Investment Act

On 8 November 2007 the Deutscher Bundestag passed an act amending the German Investment Act. The Amendment Act came into force on 28 December 2007. It is designed to significantly modernise German investment fund laws. This briefing discusses the key amendments. (January 2008)

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