Loan only credit default swaps the new European standard form

The first 150 words of the full text of this article appear below. Key points

• European Loan Only Credit Default Swap (‘LCDS’)documentation was published by the International Swaps &Derivatives Association, Inc. in the form of a Standard TermsSupplement and Form of Confirmation for use with Credit DerivativeTransactions on Leveraged Loans on 30 July 2007 (the ‘EuropeanLCDS’).
• This article reviews some of the changes thathave been made since the first circulation of the draft EuropeanLCDS documentation on 2 May 2006 (the ‘Draft LCDS’).
• Acomparison between the Draft LCDS, the current form of the EuropeanLCDS and the US LCDS (defined in the article below) providesan insight into how the development of the European LCDS hasrequired a compromise to be made between the needs and demandsof various market participants and the specifics of the Europeanleveraged loan market (as more fully described in our recentarticle¹) and indicates points of convergence between the . . . [Full Text of this Article]

 

The pan-European retail market are we there yet?

The first 150 words of the full text of this article appear below. Key points

• When the EU Prospectus Directive was introduced inlate 2003, there was great optimism that it would finally leadto the long awaited pan-EEA retail capital market.
• This articleasks whether the Directive has achieved this result and looks,in particular, at the disclosure regime relating to the admissionof debt securities to EEA-regulated markets and the public offeringof such securities in the EEA.
• A number of impediments to thecross-border retail market, that are completely separate fromdisclosure, are examined.
• In conclusion, the article discusseswhether, in fact, expectations for the Prospectus Directivein this area were set too high and could never be met and looksat what more needs to be done in order to achieve the goal ofa single retail debt market in the EEA.

 

The European Union--law, financial institutions and the banking crisis

The first 150 words of the full text of this article appear below. Key points

• Law created by European Institutions affects businessin all areas, none more so than in the financial sector, asthe recent financial crisis has thrown into sharp relief. Notonly the Directives that shape regulation of financial businesses(outside the scope of this article), but some provisions ofthe Treaty, Directives, Regulations and Decisions affect theability of banks to do business, in their dealings with States,as well as in their dealings with commercial customers and eachother.
• Key in the financial crisis have been the Treaty ruleson State aid: these have affected the ability of States to assistfinancial institutions in difficulty and the manner in whichthey give assistance; the recognition of the global financialcrisis as creating a disturbance in the economy of many MemberStates has been central to the swift approval of rescue aidin accordance with new guidance, while reconstruction . . . [Full Text of this Article]

 

Disclosure in the EEA securities markets--making sense of the puzzle

The first 150 words of the full text of this article appear below. Key points

• This article looks at the various elements of thedisclosure regimes for issuers that are admitted to EEA-regulatedmarkets, including the initial requirement for the productionof a prospectus on admission and on-going requirements to discloseprice sensitive information as it arises and to make regularreports to the market.
• After a brief analysis of some of thesimilarities and differences between the various regimes, thearticle makes an attempt to reconcile the differences by lookingat each regime in the context of the others and viewing themas a continuum.
• Finally, remaining problems concerning multi-jurisdictionliability for disclosure in the EEA and potential liabilityfor forward-looking disclosure are discussed.

 

Implementation of the Transparency Directive--room for variations across the EEA

The first 150 words of the full text of this article appear below. Key points

• The Transparency Directive, which had to be implementedin the Member States of the European Economic Area (EEA) by20 January 2007, seeks to enhance transparency in European capitalmarkets by setting new minimum standards for periodic reportsand notifications of major holdings of voting rights. New ruleson dissemination and central storage of regulated informationwill also contribute to more transparency and drive harmonizationof disclosure practices in the longer term.
• Due to the minimumharmonization approach of the Transparency Directive, therewill be an array of different super-equivalent measures adoptedby Member States,¹ creating a complex picture across Europeanjurisdictions. The article discusses the types of issues thatnational regulators and legislators considered when implementingthe Transparency Directive into national law by looking at theUK and German examples.
• The article also discusses the consequencesof implementation of the Transparency Directive for non-EEAissuers, both in . . . [Full Text of this Article]

 

'Canada Steps Up'--Task Force to Modernize Securities Legislation in Canada: recommendations and discussion

The first 150 words of the full text of this article appear below. Key points

• The Task Force to Modernize Securities Legislationin Canada released its report entitled ‘Canada Steps Up’in October 2006. Its 65 recommendations focused on bringingCanadian securities law into the 21st century, enhancing Canada'scompetitiveness in the global marketplace and eliminating itshigher cost of capital relative to the US.
• This article reviewsand analyses the Task Force's recommendations in five criticalareas: cost–benefit analysis (CBA), improving access tocapital markets, the use from electronic disclosure systemsand financial literacy, the regulation of hedge funds and finally,enforcement.
• This article also reviews two issues that receivedsignificant Task Force discussion, but were left as ideas forconsideration, namely an insurance scheme for misinformationin the capital markets and subsidizing securities analysis toimprove analyst coverage of small firms.
• Finally, conclusionsare drawn from the Task Force's deliberations and recommendationsand next steps are suggested.

 

Offshore IT Outsourcing and the 8th Data Protection Principle - legal and regulatory requirements - with reference to Financial Services

In the global sourcing world, particularly in financial services,offshore outsourcing and associated data transfers are commonplaceand increasing, searching out lower cost third countries, whichmay have even fewer data protections. In such an environment,the1998 Data Protection Act’s 8^th Principle and associated7^th Principle security provisions become critical protectionsfor UK data subjects. Yet the few statistics that exist indicate that unrestrictedtransfers appear to occur from several EEA countries. Furthercriticisms are that the UK 1998 Act does not fully align withthe EEA Directive, the Schedule 4 exceptions are overly wide,the country assessment process can be ignored with the InformationCommissioner’s ‘blessing’ and his powers andresources are limited. Financial Services may be a contrasting exception, where theindustry regulator, the FSA, ‘incidentally’ enforcesmany of the data protection requirements of overseas data transfers,has significant direct enforcement powers and a model ADR approachthrough the Financial Ombudsman. Although the UK banking lawand regulation meets many privacy requirements, it falls shortof the full data protection requirements, clearly illustratingthe value that data protection legislation brings. The alternative self regulatory approach exemplified by theUS Safe Harbor illustrates the weaknesses of pure self regulation,recognized by the US financial services which are moving towardscentralized data privacy supervision with the Gramm-Leach-BlileyAct, reinforcing the worldwide trend towards a more EEA-stylesupervised personal data protection world. In short, seven years after the 1998 Act was passed, we areready for an appropriate mid-course correction, with the 8thPrinciple (& 7^th Principle) needed more than ever in thegrowing outsourced world.     

The Process Matters: Fairness in Repository Siting For Nuclear Waste

Siting contested infrastructure such as repositories for nuclear waste very often faces strong local resistance. One major reason for this opposition may arise because siting processes do not appropriately consider fairness issues such as transparency, the availability of options, or the sufficient involvement of concerned and affected people. The aim of this study was to analyze people’s concerns related to justice in siting nuclear waste. Besides procedural aspects, both distributive justice and outcome valence are considered important and therefore the “total fairness model” by T?rnblom and Vermunt (Soc Justice Res 12:39–64, 1999) was used as a framework. In three quasi-experimental studies (N ₁ = 53; N ₂ = 56; N ₃ = 83) applying conjoint analysis, respondents ranked 11 vignettes with the three attributes procedural justice, distributional justice, and outcome valence. Each vignette represents a realistic scenario of a site selection process for the disposal of nuclear waste in Switzerland. All the three studies yield a consistent result: vignettes representing a situation with a fair process are top-ranked by respondents; situations with negative outcome valence are ranked lowest; distributive issues turned out to be of minor importance. We conclude that procedural fairness should be given more attention in any kind of contested infrastructure siting and that real-world examples like the one discussed here can inform justice research.     

How important are interview methods and questionnaire designs in research on self-reported juvenile delinquency? An experimental comparison of Internet vs paper-and-pencil questionnaires and different definitions of the reference period

There has been relatively little change over recent decades in the methods used in research on self-reported delinquency. Face-to-face interviews and self-administered interviews in the classroom are still the predominant alternatives envisaged. New methods have been brought into the picture by recent computer technology, the Internet, and an increasing availability of computer equipment and Internet access in schools. In the autumn of 2004, a controlled experiment was conducted with 1,203 students in Lausanne (Switzerland), where “paper-and-pencil” questionnaires were compared with computer-assisted interviews through the Internet. The experiment included a test of two different definitions of the (same) reference period. After the introductory question (“Did you ever...”), students were asked how many times they had done it (or experienced it), if ever, “over the last 12 months” or “since the October 2003 vacation”. Few significant differences were found between the results obtained by the two methods and for the two definitions of the reference period, in the answers concerning victimisation, self-reported delinquency, drug use, failure to respond (missing data). Students were found to be more motivated to respond through the Internet, take less time for filling out the questionnaire, and were apparently more confident of privacy, while the school principals were less reluctant to allow classes to be interviewed through the Internet. The Internet method also involves considerable cost reductions, which is a critical advantage if self-reported delinquency surveys are to become a routinely applied method of evaluation, particularly so in countries with limited resources. On balance, the Internet may be instrumental in making research on self-reported delinquency far more feasible in situations where limited resources so far have prevented its implementation.

Which law applies? A reply to Professor Torremans

The first 150 words of the full text of this article appear below.

‘A book may be good for nothing; or there may be onlyone thing in it worth knowing; are we to read it all through?’(Samuel Johnson) This section is dedicated to the review ofideas, articles, books, films and other media. It will includereplies (and rejoinders) to articles, the evaluation of newideas or proposals, and reviews of books and articles both directlyand indirectly related to intellectual property law.

In a recent article,¹ Professor Torremans argues that the countryof origin (sometimes called the lex originis) should be thelaw applied to authorship and ownership of copyright.² There is no doubt that several countries do apply the countryof origin to initial ownership and authorship of copyright works.Citing both the Austrian and Belgian Codes on Private InternationalLaw as examples,³ Professor Torremans also mentions the decisionof the US Second Circuit of Appeals in . . . [Full Text of this Article]

The evolution of regulatory enforcement action in the UK capital markets: a case of 'less is more'?

The first 150 words of the full text of this article appear below. Key points

• Formal enforcement action is a relatively rare occurrencewithin the UK capital markets regulatory framework. This characteristicdistinguishes the UK from the US, where there is a more intensefocus on enforcement, both public and private.
• Several featuresof the UK regulatory system contribute towards a low incidenceof enforcement. Some of these features are embedded in the statutoryframework, but the FSA has played a key role in the developmentof enforcement policy, while the continuing presence of self-regulationin the form of the Combined Code has also played a part.
• Thefocus on risk-based regulation in the UK has been a major influencefor enforcement policy. The move to more principles-based regulationhas also been a factor but one that is more difficult to interpret.If it is correct to assume that principles-based regulationdoes not affect the intensity of regulation, then the effecton the . . . [Full Text of this Article]

     1. Introduction      2. Risk-based regulation      3. Principles-based regulation   The move towards more principles-based regulation The enforcement implications of principles-based regulation    4. Self-regulation and market discipline      5. The allocation of responsibility for regulatory contraventions      6. Public and private enforcement   Public enforcement Private enforcement    7. Settlement and sanctions   Sanctions: the statutory options Settlements: process and incentives Procedural complications    8. Synthesis and speculation      9. Conclusions       

The Concluding Observations of United Nations Human Rights Treaty Bodies

The seven principal United Nations-sponsored human rights treatiesstipulate that States Parties submit periodic reports to therespective treaty monitoring bodies (or ‘committees’)¹on the implementation of their treaty obligations. Followingthe review of a report, the treaty body in question issues aset of ‘concluding observations’, containing itscollective assessment of the State's record and recommendationsfor enhanced implementation of the rights in question. Arguably,the issuance of concluding observations is the single most importantactivity of human rights treaty bodies. It provides an opportunityfor the delivery of an authoritative overview of the state ofhuman rights in a country and for the delivery of forms of advicewhich can stimulate systemic improvements. Its significanceis all the greater now that the only accounts of the reviewof periodic reports which appear in the annual reports of thetreaty bodies are the adopted concluding observations.² Thisarticle seeks to test key aspects of the quality of concludingobservations. The analysis is set within the framework of reviewof the development of the practice.     

The attack on national regulation: why we need a global framework for domestic regulation

The first 150 words of the full text of this article appear below. Key points

• In regulating cross-border capital markets transactions,regulators are employing either an exemptive approach, or aunilateral or mutual recognition approach. The exemptive approachallows market participants wherever located to transact businessin the host countries without complying with local requirements.The recognition approach is limited to a particular market,but is more expansive in terms of access to host country investors.In regulating cross-border transactions, the SEC has traditionallyrelied on the exemptive approach, and has restricted participationto only the largest, most sophisticated US investors. Recently,it has moved to a mutual recognition approach with its agreementwith Australia, which allows a broader range of US investorsto conduct cross-border transactions with Australian exchangesand broker–dealers relying almost entirely on the adequacyof the Australian regulatory system. However, both its exemptiveapproach and mutual recognition approach deal only with secondarymarket transactions, not participation in offerings.
• While. . . [Full Text of this Article]

     1. Introduction      2. Differences between exemption and recognition      3. SEC's cross-border regulatory efforts: Rule 15a-6 and mutual recognition   Broker–dealer registration Rule 15a-6 currently Proposed Rule 15a-6 amendments SEC mutual recognition efforts Access by exchanges Access by broker–dealers Disclosure requirements Exemptive process Enhanced enforcement MOU and supervisory MOU Other aspects of the Framework Scope    4. Limits to the SEC's exemptive and recognition efforts   Regulatory arbitrage Scope of market participants Scope of investors    5. Issues raised by the SEC's approach   Limits on scope of market participants under the Framework SEC efforts to prevent ‘Regulatory Arbitrage’    6. Need for a Framework   Expand mutual recognition efforts to include non-US issuers Enhanced enforcement protections Use all available tools—SIFMA/IIF Framework Benefits of a Framework approach    7. Conclusion       

Disclosure practices under the EU Prospectus Directive and the role of CESR

The first 150 words of the full text of this article appear below. Key points

• In February 2005, CESR issued its Recommendationsfor the consistent implementation of the Prospectus Regulation.
• SinceJuly 2006, CESR has begun to develop a line of clarificationson disclosure practices under the Prospectus Directive and theProspectus Regulation in the form of common positions basedon Frequently Asked Questions (FAQs).
• This article first analysesthe question to which extent CESR's Recommendations and commonpositions have binding effect, in the sense that individualnational securities regulators are under some form of obligationto apply these.
• Subsequently, the article discusses a selectionof CESR's common positions on FAQs which are of material importancefor day-to-day disclosure practice.

     1. Introduction   Approximately two years have lapsed since the implementationof the Prospectus Directive in most EU Member States, whichwas required by 1 July 2005. In spite of the Prospectus Regulationand CESR's Recommendations (on level 2, respectively level 3of the Lamfalussy process) . . . [Full Text of this Article]    2. The role of CESR      3. CESR's common positions based on frequently asked questions (FAQs) with respect to disclosure practices   Use of supplemental prospectus for new offerings (FAQ no. 25) Supplemental prospectus and interim financial information (FAQ no. 16) Supplemental prospectus and profit forecast (FAQ no. 17) Conversion exemption (FAQ no. 22) Use of annual report as registration document (FAQ no. 8) Financial information of start-up entities (FAQ no. 14)    4. Disclosure practices (presently) beyond CESR's guidance   10 per cent-exemption for units in a limited partnership Disclosure issues for investment entities Risk factor disclosure    5. Conclusion       

Foreign trading screens in the United States

The first 150 words of the full text of this article appear below. Key points

• Remote trading screens allow investors to trade onexchanges located in other jurisdictions. The Securities andExchange Commission (‘SEC’) has generally prohibitedthe placement of foreign trading screens in the United Statesunless the associated exchange complies with US regulatory requirements.While the SEC defends its position as an essential investorprotection, European officials complain that SEC requirementsconstitute an unfair barrier to trade.
• This article arguesthat technological advances have largely mooted this contro-versy.Current requirements do not protect US investors as much asthe SEC claims nor do they inhibit competition as much as theSEC's critics assert.
• To the extent that alternative tradingmechanisms already give US investors de facto access to unregulatedforeign exchanges, the SEC may well choose to revisit its positionon foreign trading screens, particularly as US and Europeanfinancial markets become more integrated and disclosure requirementson both sides of . . . [Full Text of this Article]

     1. Introduction      2. US and EU perspectives on the regulation of foreign exchanges   The US view Regulation of stock exchanges Regulation of Alternative Trading Systems Regulation of foreign markets The Tradepoint release The Commodity futures trading commission's approach    The EU view      The Member State view      The US–EU conflict   Public statements US concerns European interests    3. Industry practices and the controversy over foreign trading screens   Order routing channels