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Last Entry: November 20, 2009 at 07:05:45

New ? Money Attachment Order

Posted on November 20, 2009
A new form of debt recovery called a money attachment order will come into force in Scotland on 23 November 2009. This guest article, by our Scottish correspondent, looks at how the Orders will work in practice. When a court awards a decree (judgment) for the payment of a debt, Sheriff Officers (Bailiffs) can use a money attachment [...

Living Wills

Posted on November 19, 2009
… or as the Bank of England prefers them to be known, ?recovery and resolution plans?. The FT has an article on these, reporting that Andrew Bailey, head of banking services at the Bank of England (whose signature is printed on bank notes) has listed the elements that would be required in , ooh - dare me! [...

Financial Services Bill

Posted on November 18, 2009
The Queen delivered the legislative programme for Parliament for the next session this morning in Westminster. There has been huge media interest in the Queen’s speech as the Labour government throws down the gauntlet to its rival parties in the run up to the General Election next year...

New Acts

Posted on November 13, 2009
It has been interesting to watch the progress of bills going through Parliament this month. Both Houses of Parliament officially prorogued on 12 November, marking the formal end to the parliamentary year and will meet again for the State Opening of Parliament on 18 November...

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AML guidance

Posted on November 11, 2009
The Wolfsberg Group have published a revised paper (the first was in 2003) suggesting how financial institutions can develop suitable anti-money laundering screening, monitoring and searching processes and procedures. The Group have revised the paper to reflect developments since that time, such as the use of automated transaction monitoring systems and the introduction of the risk-based approach...

Rescue financing abandoned

Posted on November 11, 2009
The Government have dropped the idea of introducing rescue finance, with super-priority for new lenders to troubled companies, for the time being. The Insolvency Service announced this today in response to the consultation, “Encouraging Company Rescue”...

Emissions trading schemes

Posted on November 10, 2009
Emissions (or carbon) trading is the buying and selling of the right to emit carbon dioxide. It is a growing market, which worries both the Financial Markets Law Committee and Friends of the Earth although they make their arguments from, naturally, very different positions...

Home Repossession (Protection) Bill

Posted on November 09, 2009
The bill has been dropped. I commented on the introduction of this bill in February of this year and the implications for lenders. The bill would have amended the Law of Property Act 1925 to require a mortgagee to obtain the court?s permission before exercising the power of sale on residential property...

Companies Act 2006

Posted on October 16, 2009
On 1 October 2009 virtually all sections of the Companies Act 2006 that had not been implemented earlier came into force. This tour de force of UK legislation (the largest Act on the statute book, now) has reached the end of its marathon along the implementation timetable...

Debt buy-backs ? not so popular?

Posted on October 16, 2009
The tax treatment of debt buy-backs has been changed with immediate effect. A Ministerial Statement explaining this was published on Hansard on 14 October. This will affect any transaction that involves debt being bought back by a borrower group. If a borrowing company is released from a liability and pays less than the amount borrowed [...

Bonuses

Posted on September 29, 2009
Have you seen any serious evidence that bonuses directly led to the financial crisis in the autumn of 2008? I can understand how the argument runs, that if you incentivise traders or bankers on a lowish basic wage with promises of a substantial bonus to take bigger and bigger risks , one day the whole pack of cards [...

?Focus? on CVA

Posted on September 17, 2009
Continuing the trend of retailers who have managed to secure the votes of their landlords for a CVA (JJB, eg), now Focus (DIY) has been the latest company to succeed. CVAs have proved attractively flexible in the past year or so helping companies to avoid more formal administration procedures and restructuring...

Retail Distribution Review ? independence, clarity and fairness

Posted on September 09, 2009
The Financial Services Authority began consultation earlier this summer (2009) on changes it proposes to its Retail Distribution Review. The emphasis is on independence, clarity and fairness in the relationship between adviser and investor. My firm, CMS Cameron McKenna are holding a briefing on RDR and on the FSA after the credit crunch: (how ARROW, Supervision, [...

Limited partnerships ? proving their existence

Posted on September 07, 2009
From the 1 October 2009, banks will be able to rely on a certificate of registration as conclusive evidence of a limited partnership’s existence and registration. The Legislative Reform (Limited Partnerships) Order will clarify the process for registration of limited partnerships by the registrar of companies...

Il Perugino and the Bankers? Guild

Posted on September 04, 2009
Bank Law Blogger has been on a very long summer holiday. Let me tell you about the beautiful fifteenth century Collegio del Cambio in the Italian city of Perugia. This Bankers’ Guild is gloriously decorated. In days when banking was very profitable, local boy Il Perugino frescoed the walls of the Council Room...

Constructive trusteeship in complex restructurings

Posted on July 14, 2009
An Australian restructuring case, despite minor differences of law, has relevance for banks taking security under English law for borrowing from complex corporate structures. The case shows how much care banks should exercise to avoid liability as constructive trustees...

At a recent “round table”,

Posted on June 26, 2009
At a recent “round table”, I gave an overview of legal developments of interest to bank lawyers. Here is a summary: Regulatory Reform Is a perfect maelstrom of activity for obvious reasons, as banks are being handed birch twigs to beat themselves penitentially for not counting the pennies...

Letters of credit ? Guaranteed reimbursement?

Posted on May 13, 2009
Consultation on a product that guarantees reimbursement of UK confirming banks under letter of credit arrangements has started. The Export Credits Guarantee Department seeks views on such a scheme. Export finance has recently become harder to obtain and more expensive...

Limitation periods ? proposals for reform

Posted on May 12, 2009
A bill is to be published later this year that will propose a “primary” 3-year period for contract (and other) claims starting from, broadly, the date on which the claimant knows of the facts which give rise to the action and a “longstop” 10-year period starting from, broadly, the date of accrual of the cause of [...

CVAs: the future?

Posted on May 11, 2009
JJB Sports plc has been the first listed UK company to use a CVA successfully. They have announced that 99% of the retailer’s unsecured creditors had approved a company voluntary arrangement which will facilitate a restructuring of JJB’s business...

Equality Bill

Posted on May 08, 2009
The Government introduced the Equality Bill to the House of Commons on 27 April 2009. The Bill is to strengthen existing equality law and introduce new measures against discrimination. The Bill makes it unlawful to discriminate against someone aged 18 or over when providing services, which will include the provision of financial services...

The Privy Council on ?appropriation? under the FCA Regs

Posted on May 08, 2009
The Privy Council have decided (5 May 2009) that it is not necessary for the person taking security in the form of share charges to become the registered holder of the shares for there to be a valid appropriation within the meaning of “appropriation” in Directive 2002/47 and the Financial Collateral Arrangements (No...

Registration of charges created by overseas companies

Posted on May 01, 2009
The Department for Business, Enterprise and Regulatory Reform (BERR) has published revised draft regulations for the registration of charges created by overseas companies. The Overseas Companies (Company Contracts and Registration of Charges) Draft Regulations 2009...

Lending Regulation Bill - is it or isn?t it?

Posted on May 01, 2009
There is conflicting news about the progress of this Bill. A commercial legal information provider this week reports it as having been withdrawn at its second reading in the Commons. The Parliament website says there was not enough time to complete the debate before the end of the session on 27 February 2009, so it has been [...

Trends in Lending

Posted on May 01, 2009
The Bank of England has begun a new monthly publication that presents the Bank?s assessment of lending to the UK economy. The Bank say, this first report provides a longer-term perspective and is therefore more comprehensive than will be the case for future editions...

Asset Purchase Facility

Posted on May 01, 2009
The BoE has published the first quarterly report on the transactions undertaken through its Asset Purchase Facility. The objective of the Facility was to improve the liquidity in, and increase the flow of, corporate credit by making purchases of high quality private sector assets including commercial paper and corporate bonds...

Co-operative and Community Benefit Societies and Credit Unions Bill

Posted on May 01, 2009
This private member?s Bill received its second reading on 24 April. The Bill is to: make provision for societies to be registered as co-operative or community benefit societies; to re-name the Industrial and Provident Societies Acts; to apply to registered societies the provisions relating to directors? disqualification and to make provision for the application of certain other enactments relating [...

Consultation on the Consumer Credit Directive

Posted on May 01, 2009
The Department for Business, Enterprise and Regulatory Reform have begun the consultation on proposing the transposition of Directive 2008/48 (Consumer Credit Directive) into UK law. The Directive must be implemented by June 2010. It introduces: a duty on the lender to provide adequate explanations about the credit on offer to the consumer; an obligation on the lender [...

Trusts: Perpetuities and Accumulations Bill

Posted on April 30, 2009
This Bill might, if passed, have an impact on any trust arrangements your bank might use. It was introduced to the House of Lords on 1 April 2009 and the second reading was on 28 April 2009. It is based on recommendations made in the Law Commission?s 1998 Report...

Proposals for dealing with troubled companies

Posted on April 27, 2009
The law of corporate insolvency will be changed as indicated by the recent Budget speech (April 2009). Legislation to improve companies’ access to funding is planned. The Insolvency Service will start a consultation in June. The proposals would give viable large and medium sized companies the same opportunity now available to small companies for [...

Symbolic demonstrations

Posted on April 02, 2009
A bank’s windows were smashed yesterday (1st April) in Threadneedle Street, London. 88 people were arrested in protests the police say were mostly peaceful. Today, outside the London Stock Exchange, demonstrators played a giant game of Monopoly with huge crates of fake money...

Bills: bank accounts and Scottish banknotes

Posted on April 01, 2009
A bill that proposes to require banks and building societies to offer retail customers a current and a savings account for no charge is going through Parliament. It has already received its first (perfunctory) reading and the substantive, second reading will be held on 19 June...

Bank charges case - to the House of Lords

Posted on April 01, 2009
The House of Lords have allowed the banks to appeal to them against the Court of Appeal’s decision that the issue of fairness of bank charges falls within the Unfair Terms in Consumer Contract Regulations. See the most recent post by Bank Law Blogger on this...

Banking Bill

Posted on February 11, 2009
The Banking Bill is on its final parliamentary stretch and in theory expects to receive Royal Assent by tomorrow, 12 February 2009. It is now in the process of debate quaintly called “ping-pong”. Both Houses must agree on the text of the Bill and there are still issues to resolve before they can agree on every [...

Home Repossession (Protection) Bill

Posted on February 06, 2009
Andrew Dismore MP introduced this Private Members’ Bill on 3 February 2009 in reaction to the case last year of Horsham v Clark. The Bill proposes to amend the Law of Property Act 1925 so as to require a mortgagee to obtain the court?s permission before exercising the power of sale over a dwelling-house...

Timing of changes to law on registration of charges

Posted on January 30, 2009
It might helpful to set out the timing of changes to the law of registration of charges. The implementation timetable of the Companies Act 2006 is , after all, complicated. The key date is 1 October 2009. On that date Part 25 (Company Charges) of the Companies Act 2006 comes into force...

Bank charges - latest judgment

Posted on January 26, 2009
The test case in the High Court as to whether the Unfair Terms in Consumer Contracts Regulations apply to questions of fairness as to the level and application of unarranged overdraft charges continues. The judgment in the hearing on 9 December 2008 has been published (21 January 2009) and looks at whether some historical terms allowing the [...

Pre-packaged administration

Posted on January 21, 2009
A new rule affects “pre-packaged sales” or “pre-packs” - arrangements to sell a company’s business or assets to a buyer before an administrator is appointed. The administrator effects the sale on his appointment. Unsecured creditors have no chance for involvement in the sale of the business or assets before it takes place...

Twitter Updates

Posted on December 19, 2008
I’ve added a Twitter update to the Bank Law Blog, so that now anyone who wishes to can follow me on Twitter either by subscribing to the RSS feed or by following me on Twitter itself. For anyone not familiar with Twitter the following is a great introduction to the service...

The Banking Bill

Posted on October 12, 2008
Roomfuls of people are playing games of “Pass the parcel of debt” for years. Sometimes one room joins up with another roomful and they swap, paying each other as they go, and interchange with other rooms. The music stops in some rooms. What are those parcels worth when they are opened? The Telegraph’s analaysis “The decade of debt [...

Financial Collateral Arrangements

Posted on September 16, 2008
Will we see any UK case law soon on the Financial Collateral Arrangements (No. 2) Regulations? Recent events at Lehman’s in particular might throw up some issues. In any case, the Privy Council are set to hear the Alpha Telecom v Cukurova British Virgin Islands’ case on 23 February 2009...

Rome 2

Posted on September 15, 2008
If you are dealing with cross-border finance agreements, “Rome 2″ might affect the drafting of your governing law and submission-to-jurisdiction clauses. “Rome 2″ is the EU Regulation that harmonises conflict of law rules in non-contractual obligations (tort) in civil and commercial matters...

Posted on September 14, 2008

Do banks understand the clearing cycle?

Posted on August 22, 2008
The Banking Code Standards Board have published the results of their mystery shopping to see how many banks understood the impact of the 2-4-6 cheque clearing process. They found there is confusion among bank staff. They looked for the ability of bank staff to provide clear and accurate information about cheque clearing times...

The Vienna Sales Convention

Posted on August 11, 2008
To the casual observer, it might not be obvious why the Vienna Sales Convention is relevant to banking law but I see the Financial Markets and Law Committee have said the Convention will apply to derivative contracts where there is provision for physical delivery...

Rome 1 conference

Posted on August 11, 2008
Do you need to catch up on Rome 1 or get 5.5 Law Society CPD points under your belt? The Regulation will come into force on 17 December 2009. There will be a conference on Rome 1 on 19 September, £140, by the Birmingham Law School, in London. Rome 1 is shorthand for the now [...

Bribery and corruption

Posted on June 24, 2008
The Government plan to introduce a bribery bill in the 2008/9 parliamentary session, according to this year’s Draft Legislative Plan. There was a Corruption Bill in the 2005/6 session, that did not survive the end of the session. It is too early to say whether the new bill will be more or less a repeat of [...

Bank charges case - next date

Posted on June 19, 2008
The next hearing in the test case on bank charges brought by the Office of Fair Trading against seven banks and one building society will be held on 7 July 2008 and is expected to last three days. The Court will determine: whether any other terms and conditions in the bank?s documents that were not covered by the [...

Keep clear notes

Posted on June 17, 2008
Some cases have shown the importance of keeping clear notes when you change the terms of an existing agreement. We have always known that without clear evidence, it is much harder to persuade the court that your version of events is right. But being human, good practice sometimes gets forgotten...

Roman banking

Posted on June 13, 2008
David Jones has written an article on some 1st century AD banking records. He tells of the Sulpicii who provided finance for grain merchants in Puteoli, the port of entry for Egyptian wheat coming to Rome. Somehow, a collection of wax writing tablets recording the transactions turned up in a suburb of Pompeii...

Loan buy-backs

Posted on June 10, 2008
It makes good press to express doubt over the legality of borrowers buying back their borrowing cheap. There has been a flurry of articles about debt buy-backs. “Debt” in the language of our trade journals - really “loan buy-backs”: to distinguish them from the practice in the securities world which raises no eyebrows...

Liquidity

Posted on May 15, 2008
There is a rather interesting paper the BIS have just published that explains the Federal Reserve’s thinking about central banks providing liquidity. It’s worth having a look at for a view of the big picture of what has been going on in the financial markets over the past year...

Retail Distribution Review Interim Report

Posted on April 30, 2008
The FSA hope to encourage consumers to get more confidence in using the retail financial products market. As part of their project to achieve this, today the FSA have published the Retail Distribution Review Interim Report. There is more commentary on my employer’s site...

Bank charges - OFT to review terms

Posted on April 24, 2008
The judgment on the test case hearing of January 2008 has been published this morning. On a quick look through, the OFT will be able to review the fairness of the charges under the Unfair Terms in Consumer Contracts Regulations. Contrary to the implication of some national headlines appearing already that the banks have “lost [...

Some ISDA news

Posted on April 22, 2008
New and revised credit derivative documentation Also available on ISDA’s site are: 1) iTraxx® LevX® standard terms supplement and confirmation for credit derivative transactions on leveraged loans. These documents are designed for credit default swap transactions where the reference entity is a European syndicated loan which is listed on the iTraxx® LevX® index and are primarily intended [...

Companies (Particulars of Company Charges) Regulations 2008

Posted on April 21, 2008
BERR have published The Companies (Particulars of Company Charges) Revised Draft Regulations 2008. They, Err …, deal with the information to be provided to the Registrar of Companies on the registration of company charges under Part 25 of the Companies Act 2006...

New Banking Codes

Posted on April 17, 2008
The new Business Banking Code and the Banking Code were published at the start of April, together with guidance and a fact sheet giving the key new provisions. The Codes have been given a bit of “press”. Radio 4’s Moneybox Live had Eric Leenders, head of the Retail team at the British Bankers’ Association on to explain the changes...

Improving processing of credit derivatives

Posted on April 16, 2008
In response to concerns about backlogs of unconfirmed trades in the over-the-counter (OTC) derivatives market, a group of dealer banks have written to the New York Federal Reserve committing to improving the trade processing of credit derivatives. In recent years, the volume of trades has increased and many banks are struggling to process them...

?Rome I - Should the UK Opt in??

Posted on April 15, 2008
The Ministry of Justice has issued a consultation paper addressing the issue of whether the UK should opt in to the Rome I Regulation on choice of law in contract. BLB has been concerned about Rome 1 before. The Rome I proposal will provide clarity over which law applies if a dispute arises over a contract made [...

An apology and some law

Posted on April 14, 2008
Bank Law Blogger’s loyal reader must think BLB spends too much time watching credit crunch and her shares plummet to write posts for the Blog. It’s true. That, combined with an enjoyable secondment to a client has distracted her a trifle...

Mortgage arrears - pre-action protocol proposed

Posted on March 05, 2008
The Civil Justice Council (”We promote the needs of civil justice in England and Wales and monitor the system to ensure that progress to modernise it continues.”) has issued a consultation paper on a Mortgage Arrears Protocol. This is going to be of interest to amongst others, lenders to residential developers...

Mortgages - house points?

Posted on March 05, 2008
Just when you thought regulation of financial products couldn’t get any heavier, see the front page of today’s FT and its banner headline “Darling to push ?gold standard? mortgages“. Alistair Darling is going to propose that all mortgages in Britain will be graded and the least risky will be given an official seal of approval...

Execution clause - single director from 6 April 2008

Posted on March 03, 2008
Do you need to have a look at your standard company execution signing block? Companies will be able to execute deeds on the signature of a single director that has been witnessed, from 6 April 2008. The Companies Act 2006, section 44 makes the change...

Insolvency set-off - building societies

Posted on February 27, 2008
The Financial Markets Law Committee have published their December 2007 paper proposing that the mandatory insolvency set-off rule should be applied to building societies and incorporated friendly societies. Insolvency Rule 4.90 doesn’t apply to them at present...

Delay on new Insolvency Rules

Posted on February 26, 2008
The Insolvency Service have said the timetable for introducing new Insolvency Rules that update the 1986 ones has slipped back to 1 October 2009. The details are here.

OFT credit card comparisons

Posted on February 11, 2008
The OFT has today published its report into the difficulty consumers have in comparing credit cards. It makes a series of recommendations to help consumers choose a credit card, the most significant being the recommendation that the FSA offer a price comparison website...

Loan: was it residential? commercial?

Posted on February 11, 2008
The court has decided that a borrower who took out a loan on a property that was partly residential and partly commercial was a consumer. This meant that in that particular case, the Unfair Terms in Consumer Contracts Regulations 1999 applied. The lender was unable to impose an early redemption penalty as it was held to [...

Running onto the Rock?

Posted on February 06, 2008
Two items of interest to note in the aftermath of Northern Rock: the House of Commons Treasury Committee report that analyses the causes and consequences of the run on Northern Rock and the publication by HM Treasury, the Financial Services Authority and the Bank of England of a consultation document outlining proposals “to strengthen the framework [...

Bank charges case

Posted on January 29, 2008
In case you are not attending court in person to watch proceedings, you can see the BBC’s comments on the test case on bank charges at this page. Some of the comments are tantalising. Bank Law Blogger is not snoozing away the working day in the arms of Morpheus in the International Dispute Resolution Centre and so [...

Implementation of the Payment Services Directive

Posted on January 28, 2008
The Government have issued this consultation document showing how it proposes to implement the PSD. It explains where the Government has some flexibility. It looks at the type of firms which will be subject to the requirements of the PSD; the conditions for waiving the application of the prudential authorisation requirements; the waiving of some [...

Duty of bank in customer relationship

Posted on January 21, 2008
In a case involving the operation of a bank account, consideration of the complex facts of the particular case led the court to hold that the director of the claimant company account holder had given authority for the transfers (which happened to ease his personal financial difficulties)...

Empty property rates relief for companies in administration

Posted on January 10, 2008
The Government (the Department for Communities and Local Government) have announced a permanent exemption from empty property rates for companies in admininstration that redresses the anomaly shown up by the Trident case, that companies in liquidation, but not administration, have such an exemption...

Silver linings and other cliches

Posted on January 09, 2008
In the period of Christmas quiet , it has been easier than usual to spot patterns of publishing in the trade rags. It’s a rare disaster that brings no good to lawyers, and the credit crunch is no exception. On the surface it is more surprising that it also benefits bankers...

Statement of principles for banks and business

Posted on January 09, 2008
The BBA issued a summary of its statement of principles for banks and business on its nice new website on 8 January 2008. So far as I know, there are no changes to the existing statement of principles which sets out how high street banks deal with their business customers who borrow from them...

Leased plant and machinery

Posted on January 08, 2008
HMRC has been spending a bit of time drafting laws to prevent people avoiding tax on “mismatched chains of leases” and on leases granted at a premium. They have published a Technical Note with draft legislation to be included in the Finance Bill 2008, that affects: 1...

Buy-to-let funding - CCA exemption?

Posted on January 07, 2008
The Department for Business Enterprise and Regulatory Reform has issued a consultation paper on proposals to exempt buy-to-let lending from regulation under the Consumer Credit Act 1974, as amended by the Consumer Credit Act 2006. In April 2008, the financial limit of £25,000 for agreements regulated by the CCA will be abolished, extending the protection of the [...

Companies Act 2006 ? news on implementation dates

Posted on December 14, 2007
At last we know when the restrictions on private companies granting assistance for the acquisition of their own shares will come into effect under the Companies Act 2006. BERR (or rather, the equally sillily-named ?The Minister for Competitiveness?) has announced the revised implementation dates for the parts of the Companies Act 2006 that originally were [...

Can you lie to a machine?

Posted on December 11, 2007
A judgment of staggering dullness, unless you ever wanted to understand how car dealership agreements work, has shown that a fraudulent misrepresentation could be made to a machine acting on behalf of a person, rather than to an individual. This is if the machine were set up to process certain information in a particular way and would not [...

Companies Act 2006 - loan documentation

Posted on December 10, 2007
The Association of Corporate Treasurers have published a briefing note, “The Impact of the UK Companies Act 2006 on Loan Documentation.” Bank Law Blogger is being deeply altruistic in telling you about this as she herself has written Issues for Lenders, only last month, but the ACT note goes into a bit more detail on [...

Consumer Credit Act consultation opens

Posted on December 03, 2007
HMT and BERR have published a consultation document on proposed changes to the Consumer Credit Act 1974 to prevent the dual regulation of mortgages. The consultation paper, Regulation of Modified Credit Agreements asks for views on a proposed change to the Act to ensure that the regulatory regimes of the Financial Services Authority and the [...

2-4-6: cheque clearing

Posted on November 29, 2007
APACS have announced that from 30 November 2007, changes to the cheque clearing process will come into effect. The changes, known as 2-4-6 are designed to benefit any person who accepts a cheque, banker?s draft or building society cheque. The Cheque & Credit Clearing Company have issued a set of FAQ’s...