Our latest Financial Services Regulatory Group bulletin contains new updates on significant developments in financial services regulation, including the Personal Insolvency (Amendment) Act 2015, financial services remuneration, cyber-security, the Capital Markets Union, and recent Supreme Court case law regarding the Code of Conduct on Mortgage Arrears and appeals from the Financial Services Ombudsman.

Legislation implementing the EU Bank Recovery and Resolution Directive ("BRRD") in Netherlands law and facilitating the application of the EU Single Resolution Mechanism Regulation ("SRM Regulation") was approved by the Upper Chamber of the Netherlands parliament on 10 November 2015 and is expected to enter into force before the end of this year. The new law – the "European Framework for the Recovery and Resolution of Credit Institutions and Investment Firms Implementation Act" – will be referred to below as the "Implementation Act".

Today, 26 November 2015, the Act implementing the European Framework for the Recovery and Resolution of Banks and Investment Firms (the “Implementation Act”) has entered into force. The purpose of the Implementation Act is to implement the Bank Recovery and Resolution Directive ("BRRD") into Netherlands law and to facilitate the application of the Single Resolution Mechanism Regulation ("SRM Regulation").

As of 1 January 2015 the harmonized financial institution resolution rules from the Bank Recovery and Resolution Directive will be implemented in national Dutch legislation. Among other things these rules confer upon the Dutch Central Bank the so-called "bail-in power". Pursuant to the bail-in instrument, the Dutch Central Bank will have the power to cancel and/or reduce the unsecured liabilities of a financial institution under resolution or convert such liabilities into equity.

Bank structural reform: too big to fail, too big to save and too complex to manage, supervise and resolve? 1.1 The case for bank structural reform Bank structural reform is the result of a global financial crisis which developed in the summer of 2007 and became obvious in the EU in the latter part of 2008. The EU Member States that share an economic and monetary union (‘the Eurozone’) began to appear particularly vulnerable: the Greek sovereign debt crisis became apparent in early 2010 and serious economic problems emerged in Ireland, Portugal, Italy and Spain.

This briefing sets out a high level review of issues relevant to secured lending in Ireland.

LENDING IN IRELAND

Commercial lending is generally not a regulated activity in Ireland, although lending to natural person ‘consumers’ may trigger a licencing requirement. Banks licensed in other EU Member States may be compelled to use their passport to carry on a lending activity in Ireland that would otherwise be unregulated.

In this case the High Court had to consider the mutual recognition provision in the EU Bank Recovery and Resolution Directive ("BRRD") and the Winding Up Directive for Banks (WUD) which provide for how the insolvency of EEA banks should be managed by member states.

This case highlights the different tensions that arise in the aftermath of the collapse of Banco Espirito Santo ("BES") between how creditors are treated under the BRRD and WUD and the flexibility given to central banks to restructure good and bad debts when a bank fails.

On Monday 13 July 2015 the Eurozone Finance Ministers stated that they have entered into an understanding for further funds to be made available to Greece under the rules of ESM (combined with a more or less state controlled Greek trust fund for assets to be privatized) to avoid structuring a temporary Grexit. Such understanding is conditional upon the Greek parliament passing certain legislation on 15 July 2015.

DERIVATIVES/ASSET MANAGEMENT/FINANCIAL INSTITUTIONS ADVISORY & FINANCIAL REGULATORY CLIENT PUBLICATION 12 May 2015 Bank Recovery and Resolution Directive – Implications for Repo and Derivative Counterparties The Bank Recovery and Resolution Directive (BRRD)1 introduces an EU-wide regime for recovery and resolution planning for, and for resolution action to be taken in respect of, banks and large investment firms (typically the large sell-side institutions) (FIs)2.

Hybrid US/European restructurings can lead to unexpected commercial outcomes because of different practices in intercreditor agreements.