Global Financial Markets Insight - Issue 11, 2016

Global Financial Markets Insight

Finance and Markets Global Insight Series

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As we come to the end of 2016, the surprise may be just how stable and resilient markets have been in the face of political events and continued structural change driven by regulation and technology. 

In this issue we look at some of the ways in which technology is impacting the finance markets. We reflect on how funds are playing an increasing role in credit markets and how fund structures can use leverage. In the realms of regulation, we consider issues around the implementation of MiFID II, the European Banking Authority's guidelines on implicit support and the impact of 'dark pools'. We also examine what makes a bond 'green' and what to consider when taking security over bonds.

в цьому питанні

  • UK digital banks open for business
    8 DEC 2016
    Finance and Markets Global Insight Series

    2016 has seen the first all-digital banks open for business in the UK. The advent of digital banking has the potential to revolutionise the way we bank, and also reduces some of the historical barriers to entry for new competitors in the retail banking market. The challenges for the new banks will include gaining consumers’ trust and (as for the already-established banks) overcoming any data and cyber security risks.

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  • Prepare for margining
    8 DEC 2016
    Finance and Markets Global Insight Series

    New EU margin rules are now final, subject to ratification. They are part of a global initiative regulating the posting of initial and variation margin when trading non-cleared OTC derivatives. 1 March 2017 is the key implementation date for variation margin (with accelerated implementation timing for the largest financial counterparties).

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  • What to consider when taking security over bonds
    8 DEC 2016
    Finance and Markets Global Insight Series

    Taking security over bonds (and other securities) held in a clearing system raises a number of legal issues. Understanding these legal issues is a pre-requisite to structuring an appropriate security package. This article addresses some of the key questions to consider before taking security over bonds and other such securities.

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  • Finance for funds
    8 DEC 2016
    Finance and Markets Global Insight Series

    Funds are increasingly engaged in the finance market, on both the borrower and lender side, with products ranging from plain vanilla to more sophisticated alternatives. This article gives an overview of the finance market for funds, highlights some of the most common structures and considers where current trends may lead.

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  • How to keep securitised assets off balance sheet
    8 DEC 2016
    Finance and Markets Global Insight Series

    Sponsors and originators may be tempted to give “implicit support” to issues which do not perform as expected, even when they are not legally obliged to - we saw this with some structured investment vehicles (SIV) after the 2008 financial crisis. Article 248 of the Capital Requirements Regulation (CRR) forbids implicit support, and an originator that provides it risks bringing assets it has securitised and removed from its balance sheet back on - because once implicit support has been given (unless in exceptional circumstances) there will be an expectation that it may be given again, and this is inconsistent with allowing off-balance sheet treatment.

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