There's been a flurry of regulatory activity in the UK and Europe over the past few weeks. Here's a look at the highlights.
As the economic headwinds indicate that borrowers will continue to face financial pressures in 2023 and beyond, lenders are seeking ways to exercise more leverage as “covenant-lite” facilities prevail. Material adverse change clauses in finance documents UK and US perspective By Olga Galazoula, Jacques McChesney and Charlotte Harvey 4 FUNDS INSIDER FUNDS INSIDER 5 The event relied upon by the lender to enforce this clause was the making of an arbitration award that could potentially result in significant damages being awarded against the borrower.
The sudden and spectacular failure of three regional banks within a week has pushed all other business stories off the front pages and has financial markets anxiously asking where the fallout stops. As unique as the underlying causes of each failure were, at their core these were all good old-fashioned bank runs triggered by liquidity issues.
We can’t recall another new year beginning with such negative sentiment and low expectations for the domestic economy as 2023, with the lone exception of 2009 during the global financial crisis. A mild U.S. recession beginning later in 2023 is now the consensus expectation while inflation remains well above the Fed’s target despite seven rate hikes to date and the highest interest rates in 15 years.1
The Court of Appeal has held that a settlement agreement between a bank and a group of companies which included releases of the parties’ affiliates prevented the companies from later pursuing claims against their own affiliates. Those affiliates were held to include former administrators appointed by the bank and the administrators’ solicitors: Schofield v Smith [2022] EWCA Civ 824.
Recently, the FDIC reported on legal claims and enforcement proceedings taken by the agency during the financial crisis in the years from 2008 to 2013.
A number of key decisions from the English courts in 2021 illustrate the litigation trends that are likely to have implications for the financial services industry in 2022 and beyond (see below “Cases to watch in 2022”).
Market misconduct and mis-selling
In the first of a series of claims issued by ECU Group Plc in relation to alleged wrongdoing in the foreign exchange markets by a number of banks, the High Court held that:
In this week’s update: Funds in a holding company’s bank account belonged to a subsidiary and could be used to pay the costs of a subsidiary’s acquisition, the FCA publishes a series of Q&A on the cessation of LIBOR and the Government publishes a roadmap towards greening finance and sustainable investing.
UK REIT Horizon Scanner Q4 2021
UK REIT Horizon Scanner Q4 2021
Key Issues
Key issues coming up for UK Main Market REITs in corporate, financial regulatory, planning, real estate, securities law and regulation and tax1 in England (including retained EU law2).
Issue/status/timing: New developments since our March 2021 edition are shown in green text. Impact: urgency/impact rating for REITs admitted to London Stock Exchange Main Market (including the Specialist Fund Segment3)
Antitrust team leader Edoardo Cazzato joins the firm with team