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US and global regulators are once again focused on having market participants design and implement business continuity and disaster recovery (BCDR) plans, as well as corresponding policies and procedures.
On August 4, the U.S. Commodity Futures Trading Commission (“CFTC”) had withdrawn its no-action letter (i.e., permission to operate) with respect to PredictIt, an online prediction market operated by the University of Wellington, New Zealand and ordered PredictIt to shut down its operations as of February 15, 2023. This no-action letter was issued in 2014 and allowed the University of Wellington to operate a small-scale, not-for-profit market in futures or swaps event contracts for educational purposes, without registration as a designated contract market, foreign board of trade, or swap execution facility (i.e., an exchange), and without registration of its operators.
On September 8, the UK’s Financial Conduct Authority (“FCA”) published a “Dear CEO” letter setting out its strategy and supervisory priorities for overseeing benchmark administrators under the UK Benchmark Regulations (“UK BMR”) and applicable FCA Principles and Rules. This form of letter is a common tool utilized by the FCA to focus the attention of firms’ senior managers on particular issues.
As we reported in May, the Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve Board (“FRB”) and the Office of the Comptroller of the Currency (“OCC”) (together, the “Agencies”) issued a notice of proposed rulemaking to amend and update the rules implementing the Community Reinvestment Act (“CRA”). The comment period on the proposal ended on August 5. We held off summarizing the comments until most people returned from, hopefully, some restful end-of-summer R&R.
A series of significant UK corporate failures, including BHS (2016), Carillion (2018), Patisserie Valerie (2018) and Thomas Cook (2019), each of which collapsed unexpectedly and not long after receiving clean bills of health from their respective auditors, served as a catalyst for a process of independent review, consultation and recommendations on ‘Restoring Trust in Audit and Corporate Governance’.
Federal Reserve Vice Chair of Supervision Michael Barr gave remarks yesterday to the Brookings Institution in Washington, D.C. The speech was his first since being sworn in at the end of July and served as a good indicator of his policy agenda.
The federal banking regulators have guidance in place regarding the advertising of credit pre-approvals, and, of course, Regulation Z and the Truth In Lending Act have provisions regarding how and when a pre-approval can be communicated to customers. Further, a “pre-approval” for credit is a standard that is supposed to mean that the consumer’s credit has been evaluated at some level by the creditor (usually via so-called prescreening, or because the customer agreed to an initial evaluation), and that the consumer will be approved for the credit product, assuming an intervening bankruptcy or other extremely adverse credit event has not occurred.
In many corners of financial services, Environmental, Social and Governance (“ESG”) concerns are driving innovation, SEC disclosure requirements, and even risk and compliance assessments. However, first among the prudential banking regulators, the FDIC on September 2 released a consumer advisory on ESG considerations, specifically regarding the impact of “Banking on the Environment.”
The U.S. Bankruptcy Code’s safe harbor provisions provide comfort to financial institutions that transfers made under protected financial contracts will generally not be subject to avoidance or “clawback” if the transferor subsequently files for bankruptcy protection under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code. But is the same true where the transferor is a foreign debtor whose main insolvency proceeding is occurring outside the United States, and whose representatives merely petition for “recognition” of the foreign proceeding in the United States under Chapter 15 of the Code? The U.S. District Court for the Southern District of New York recently confirmed that the safe harbors provide protection under this circumstance as well, even with respect to foreign law claims based on foreign transactions. See Fairfield Sentry Ltd. v. Citibank, N.A. London, 2022 WL 3644436 (S.D.N.Y. Aug. 24, 2022).
Cadwalader's Mark Beardsworth, Kevin Roberts and Duncan Grieve discuss the UK sanctions landscape and new guidance issued by the Office of Financial Sanctions Implementation.
Decentralized finance platforms (DeFi) are designed to operate in a decentralized manner primarily through the utilization of smart contracts. Smart contracts are simply a name given to small “if/then” statements written in computer code that are self-executing. Smart contracts are used throughout the cryptocurrency and blockchain space, are an integral component in non-fungible tokens (NFTs), and can allow for things to happen automatically, without human intervention. For example, a smart contract could be coded such that payment for an item could be released upon receipt of a shipment, so if the shipment is received, then payment is released.
The DOJ recently published an opinion from the Office of Legal Counsel (“OLC”) regarding the FDIC Board. The OLC opinion concluded that “the Chairperson of the FDIC Board does not have the authority to prevent a majority of the Board from presenting items to the Board for a vote and decision.”
On August 19, the European Securities and Markets Authority (“ESMA”) announced the publication of its response to a consultation on the European Commission’s (the “Commission”) proposals to amend the regime for the provision of “third country” (meaning non-EU) benchmarks into the EU under the Benchmarks Regulation (“BMR”). The Commission’s consultation, which concluded on August 12, 2022, asked for views on whether the rules applicable to the use of benchmarks administered in a third country, which will fully enter into applicati
The uncertainty, global and local shocks, and volatility of the last few years have not yet led to a significant slowdown in dealmaking, according to GlobalData’s Q2 2022 report, but the Berkeley Research Group in its 2021 report notes a trend toward more disputes between buyers and sellers in the M&A context, and more renegotiation on price by buyers after the signing of a deal. For parties currently negotiating their sale agreements, now is a good time to review the contractual language creating ‘deal certainty’.
Compliance deadlines for Local Law 97 of 2019 are steadily approaching, with the first reporting date being May 1, 2025, at which time owners of buildings covered by the law will be required to report compliance with the prior 2024 fiscal year mandates. Conformity to the carbon emission requirements will require building owners in New York City to undertake immediate action, if not already started.
The Economic Crime (Transparency and Enforcement) Act 2022 (the “ECA”) came into force on 1 August 2022 and places new obligations on overseas entities holding real estate in the United Kingdom.
In our July edition of REF News and Views we began our deep dive into the Sustainability-Linked Loan Principles (“SLLP”) core components (“Core Components”).
Two recent OFAC enforcement actions highlight real-world challenges that financial institutions and other companies may face in their efforts to implement an effective sanctions compliance program.
A couple of weeks ago, we reported on the FDIC and the Federal Reserve Board sending a cease and desist (“C&D”) letter to Voyager Capital to stop representing that customer funds were protected by deposit insurance. This past week, the FDIC sent five more letters to cryptocurrency-related companies on the same issue.
As we previously wrote in June, the Federal Deposit Insurance Corporation (“FDIC”) proposed amendments to the Deposit Insurance Fund (“DIF”) restoration plan originally adopted in September 2020 to implement a universal increase in initial base deposit insurance rates of 2 basis points. The FDIC noted in the proposal that it believes it needs to amend the restoration plan to ensure it meets the statutory minimum for the designated reserve ratio (“DRR”) of 1.35%. As of March 31, 2022, the DRR stood at 1.27%.
On August 18, the Federal Deposit Insurance Corporation (“FDIC”) issued Financial Institutions Letter 40-2022 (“FIL 40-2022”), which provided supervisory guidance for state non-member banks and multiple non-sufficient funds (“NSF”) fees. FIL 40-2022 and its attached guidance is similar in content to an issue the FDIC highlighted in its March Consumer Compliance Supervisory Highlights.
The latest in a series of rulemaking that is supportive of the financial industry’s transition away from interbank benchmarks, the new final rule adjusts CFTC clearing requirements to reflect this change.
This week, the Federal Reserve Board (“FRB”) made two announcements of particular interest to the crypto-asset sector. First, on August 15, the FRB announced its final guidelines establishing factors for Reserve Banks to use in reviewing requests to access FRB accounts and payment services. Second, on August 16, the FRB issued SR/CA Letter 22-6 regarding engagement in Crypto-Asset-Related Activities by Federal Reserve-Supervised Banking Organizations.
In the heat of summer, the nation’s top consumer protection agencies have issued startling and transformative statements and rules regarding data practice.
Christopher Gent, a former CEO of Vodafone Group plc and non-executive Chairman of GlaxoSmithKline plc, was appointed as the non-executive Chairman of ConvaTec Group Plc (“ConvaTec”), a company admitted to trading on the London Stock Exchange (“LSE”), in October 2016 and held this position until retirement in May 2019. In his role, Mr. Gent was responsible for governance over, and closely involved in the preparation of, ConvaTec’s issuance of key company news (“RNS”) announcements to the LSE. In October 2018, Mr. Gent previewed the release of an expected RNS announcement relating to the downward revision of ConvaTec’s financial guidance and the retirement of ConvaTec’s CEO before such information had been announced to the market. The disclosures were made to two individuals in senior positions at two of ConvaTec’s major shareholders under the belief that it was in the best interests of ConvaTec that these investors received the information ahe
Following the Consumer Financial Protection Bureau’s supervisory observations that the auto finance industry seemed to be struggling with providing adequate consumer protections to servicemembers, the CFPB has joined with the Department of Justice to reach out directly to auto finance companies, emphasizing the importance of compliance with the Servicemembers Civil Relief Act ("SCRA"). While the DOJ is responsible for enforcing the SCRA, the CFPB provides support in terms of educating consumers and industry on how to comply with it, and may use its unfair, deceptive or abusive act or practice authority under the Consumer Financial Protection Act to itself address the failure to comply with the SCRA.
An appointed representative (“AR”) is a firm or person who carries on a regulated activity, or activities, under the responsibility of an authorized financial services firm. An authorized firm that appoints representatives in this way is referred to as a “principal.” In appointing an AR, the principal assumes responsibility for the regulated activities carried on by the AR that have been agreed with the AR in writing. The appointed representatives regime dates back to 1986, but as the perimeter of UK financial regulation has extended, the market significance of ARs has grown. At present, some principals have responsibility for a large number of ARs, especially in the fintech and asset management markets.
Last week, the Federal Reserve Board (“FRB”) announced the individual capital requirements for all large banks, effective on October 1. This announcement follows the June announcement on the results of the supervisory stress test (also known as the Dodd-Frank Act Stress Test or DFAST, as these tests are required by Section 165 of the Dodd-Frank Act), which assesses whether banks are sufficiently capitalized to absorb losses during a severe recession.
On August 3, Senate Agriculture Committee Chairwoman Debbie Stabenow, a Democrat from Michigan, and John Boozman, the top Republican on the committee, introduced a bipartisan bill aimed at regulating digital assets.
On July 26, the United States Department of Labor (“DOL”) issued proposed amendments to Prohibited Transaction Class Exemption 84-14, the so-called “QPAM Exemption.” The QPAM Exemption is an important prohibited transaction class exemption widely utilized by asset managers to provide relief for potential prohibited transactions that could arise in transactions between plans subject to ERISA and/or Section 4975 of the Code and financial services and other firms that are “parties in interest” under ERISA or “disqualified persons” under the Code (e.g., fiduciaries, plan sponsors, service providers and entities related to the foregoing by ownership) to such plans.
Last week, the Federal Deposit Insurance Corporation (“FDIC”) was part of two releases clarifying that only insured banks and thrifts enjoy FDIC insurance, notwithstanding what some non-banks may say in their marketing materials. The first release, together with the Federal Reserve Board (“FRB”), is a cease-and-desist letter to Voyager Digital (the “Joint C&D Letter”). The second is an FDIC Advisory to FDIC-Insured Institutions Regarding FDIC Deposit Insurance and Dealings with Crypto Companies.
On August 1, the UK’s Financial Conduct Authority (“FCA”) published a policy statement on strengthening its financial promotion rules for high-risk investments and firms approving financial promotions (the “policy statement”).
Fund finance provides a rich variety of liquidity options, say Cadwalader’s Samantha Hutchinson, Michael Hubbard, Angela Batterson and Brian Foster.
In this Part 3 of our series, we will focus on (1) selection of KPIs and (2) calibration of SPTs of the Core Components (and, in next month’s edition of REF News and Views, we will dive deeper into (3) loan characteristics, (4) reporting progress against SPTs, and (5) verification).
A ground lease is both a conveyance and a contractual agreement between a landlord (the ground lessor) and a tenant (the ground tenant) pursuant to which the ground lessor, as the fee owner of the real property, conveys a leasehold interest in the property to the ground tenant subject to the terms and conditions of the ground lease.
The Commodity Futures Trading Commission (“CFTC”) has two levels of jurisdiction under the Commodity Exchange Act (“CEA”).
On July 21, the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Attorney’s Office for the Southern District of New York announced parallel civil and criminal actions (here and here) against a former product manager at Coinbase Global, Inc. (“Coinbase”), the largest cryptocurrency exchange in the United States, as well as his brother and his friend, for an alleged scheme to trade ahead of announcements that certain crypto assets would be “listed” on the exchange. The U.S. Attorney’s Office charged the defendants with a criminal wire fraud conspiracy and wire fraud, while the SEC alleged the insider trading scheme constituted securities fraud in violation of the Securities Exchange Act and Rule 10b-5.
In an opinion written by U.S. District of Delaware circuit judge Stephanos Bibas that begins, “A good template serves as a guide, not gospel,” Del-One Federal Credit Union was denied the safe harbor typically proffered by use of model forms in a potential class action regarding its overdraft fees.
On July 25, the Federal Deposit Insurance Corporation (“FDIC”) announced amendments to its Enforcement Actions Manual. The amendments to chapters 1 and 4 update and clarify the FDIC’s approach to terminating cease-and-desist orders and consent orders issued under section 8(b) of the Federal Deposit Insurance Act (“FDI Act”).
On July 21, the UK Treasury and the City of London Corporation (“CLC”) published a report on their first annual review of the UK financial services sector (the “Report”). The Report sets out findings from a review of the attractiveness and international competitiveness of the UK financial services sector. It was prepared in response to the recommendation made in the 2021 UK Listing Review where it was suggested that the Government present an annual report covering this topic.
In a lengthy, numbers-heavy blog post, the Consumer Financial Protection Bureau (“CFPB”) showed off its math skills by analyzing fees that banks collect from their retail deposit customers, with a particular focus on overdraft fee trends.
On July 19, the Federal Reserve issued a notice of proposed rulemaking (“NPR”) that would implement the Federal LIBOR Act.
The Consumer Financial Protection Bureau (“CFPB”) has issued several statements affecting the credit reporting industry in the last few months, including one on medical debts and one on auto financing, while at the same time emphasizing that the definition of a consumer reporting agency (“CRA”) should be interpreted broadly to include not just credit reporting companies and tenant screeners but also “other data brokers.” This means that any company collecting “Big Data” and hoping to convert that data into profit by offer
Once in a while, a Commodity Futures Trading Commission (“CFTC”) enforcement action confirms market participants’ worst fears that the CFTC is prepared to, and is able to, find violations of the Commodity Exchange Act (“CEA”) where no such violations had previously existed. The July 19, 2022 CFTC settlement order involving Powerline Petroleum and its principals is one such case.
On July 19, Federal Reserve Board (“FRB”) Vice Chair Lael Brainard gave remarks to the National Native Coalition Virtual Series sponsored by the National Congress of American Indians. Her remarks focused on the joint proposal from the FRB, Federal Deposit Insurance Corporation (“FDIC”), and the Office of the Comptroller of the Currency (“OCC”) (together, “The Agencies”) to modernize the Community Reinvestment Act (“CRA”). As we mentioned briefly in our newsletter in May, the comment period on the proposal will be open until August 5, 2022.
On July 20, the Financial Services and Markets Bill (the “Bill”) was introduced in the UK’s House of Commons (“HoC”). This first formal stage in the legislative process (called the “first reading”) does not allow for debate of the Bill.
On July 15, the Federal Deposit Insurance Corporation (“FDIC”) issued an updated Q&A regarding how companies involved in managing deposits can determine whether such deposits should be considered brokered, and/or whether they are deposit brokers themselves.
The last week has seen a number of announcements or statements from financial regulators calling for more oversight of crypto-assets, particularly stablecoins.
In last week's Cabinet News and Views, we examined the U.S. regulators' approach to the digital asset space, with a focus on the assertion of jurisdiction by the CFTC, the SEC, prudential regulators, state executive and legislative branches, and Congressional initiatives. This week, our focus shifts to enforcement − what actions the various regulators are taking in the digital asset space and what we can expect to see in the near future.
Be it fair use in copyright, government liability in patent cases, ethics or substantive patent law issues, a number of pending cases for the second half of 2022 address important aspects of intellectual property law, say Cadwalader’s Dorothy R. Auth and Howard Wizenfeld. They spotlight cases involving Andy Warhol art and Moderna’s Covid-19 vaccine, among others.
As more market participants, from retail consumers to major financial institutions and central banks of various countries, become active in the digital asset space, the U.S. regulators are ramping up their oversight activity related to digital assets.
Capital markets partner Sabah Nawaz authored an article on the current state of the European commercial real estate structured finance market.
The U.S. Court of Appeals for the Seventh Circuit has issued a decision interpreting the Bankruptcy Code’s definitions of “statutory lien” and “judicial lien,” holding that a lien imposed by the Chicago Municipal Code was “judicial” rather than “statutory” because it arose partly as the result of a “quasi-judicial” process rather than “solely by force of a statute.”
On March 30, 2022, the New York State Supreme Court, New York County decided in Times Square JV LLC v. Walber Broadway LLC that a ground lease-tenant that is in default under the ground lease for failure to pay the landlord rent does not per se invalidate the tenant’s right of first refusal under the lease to purchase from landlord the land on which the leased premises is situated.
In this next article in our Sustainability-Linked Loans Series, we further explore this growing field by introducing and outlining the Sustainability-Linked Loan Principles and the SLLP Core Components.
In August 2021, the Financial Conduct Authority (FCA) brought in changes to the Listing Rules which were aimed at making London a more hospitable listing venue for new special purpose acquisition companies (SPACs). The impetus for doing so was to allow London to participate in the undoubted SPAC ‘boom’, which had at that point been raging in the US over the previous year.
On May 24, the CFPB launched a new office, the Office of Competition and Innovation. The stated purpose of the new office is to promote competition and innovation that benefits consumers in the financial products and services market. Specifically, the Office of Competition and Innovation will (1) explore ways to reduce barriers to consumers’ ability to switch accounts and providers, (2) research market-structure problems that create obstacles to innovation, and (3) work with stakeholders to identify and challenge existing market structures that harm consumers. The office will be housed in the CFPB’s Division of Research, Markets & Regulations.
Accurate and timely reporting of swap data is the cornerstone of swap regulation. The CFTC had promulgated its swap reporting rules in 2012, and were after 2012 among the first rules implementing the Dodd-Frank Act to require, among other things, the anonymized real-time reporting of swap data (Part 43 of CFTC regulations) as well as more detailed regulatory reporting of swap data (Part 45) to swap data repositories (“SDR”).
On June 15, the Basel Committee on Banking Supervision (“BCBS”) issued its Principles for the effective management and supervision of climate-related financial risks (the “Principles”). In its release, the BCBS stated that it “aims to promote a principles-based approach to improving both banks’ risk management and supervisors’ practices related to climate-related financial risks.” The publication of the Principles follows an initial consultation document issued in November 2021.
On 1 June 2022, the French Presidency published its “final” compromise text in relation to the revision to the EU Alternative Investment Fund Managers Directive (known as “AIFMD2”).
Over the last 18 months, we’ve seen a sharp uptick in inquiries from U.S. banks about how to use capital relief trades to manage regulatory capital constraints. Here, we set out our responses to some of the frequently asked questions we’ve received on this topic. If you’re interested in learning more, we invite you to join us for a free webinar series beginning on June 22, where we’ll discuss capital relief trades in greater detail.
Cadwalader's Michele Maman, Tom Curtin and Marc Veilleux discuss a recent ruling from the Third Circuit that serves as a useful reminder to both junior creditors and senior creditors alike as to how their dealings in an intercreditor arrangement may play out following a debtor's bankruptcy, and provides important insight into the potential remedies that a senior creditor may have available should a junior creditor breach a turnover provision.
In the last week, the Federal Reserve has announced two forthcoming dates when the Fed would be releasing two important announcements: (1) the results of its annual bank stress tests will be released on June 23 at 4:30 p.m. EDT; and (2) a second tool to help community financial institutions implement the Current Expected Credit Losses (“CECL”) accounting standard will be released as part of a June 16 “Ask the Fed” webinar.
Earlier this week, U.S. Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) introduced the first comprehensive legislation to establish a regulatory framework for digital assets to promote innovation, delineate regulatory jurisdiction, provide customer protection, ensure transparency and integrate digital assets into the existing regulatory regimes (the Responsible Financial Innovation Act, or the “RFI”). Many of the principles laid out in the RFI were first articulated in President Biden’s March 3, 2022 Executive Order on Ensuring Responsible Development of Digital Assets.
On May 31, 2022, the UK Treasury announced a consultation on the government’s proposals to manage the failure of systemic digital settlement asset (“DSA”) (including stablecoin) firms by adapting the existing Financial Market Infrastructure Special Administration Regime (“FMI SAR”).
On June 2, 2022, the Commodity Futures Trading Commission (“CFTC”) convened for the first time market participants to discuss the state and the challenges of the U.S. voluntary carbon credit (“VCC”) markets and, at the end of the meeting, published a Request for Information (“RFI”) on Climate-Related Financial Risk. This convening was an important step in CFTC’s broader initiative to conceptualize its jurisdictional reach over environmental, social and governance (“ESG”) commodity markets generally.
Federal Reserve Board Chair Jay Powell had a meeting at the White House earlier this week with President Biden and Secretary of the Treasury Yellen to discuss inflation.
The Consumer Financial Protection Bureau (“CFPB”) released a regulatory Circular providing guidance regarding the use of “complex algorithms” to assess whether a consumer should be extended credit. Often referred to as “black box” solutions, which may include artificial intelligence protocols, the CFPB has stated that full compliance with obligations is required, regardless of the technology used.
On May 27, OFAC announced a civil settlement with a Puerto Rico-based bank in connection with apparent violations of the Venezuela Sanctions Regulations. While the settlement amount of $255,938 is a fraction of the blockbuster fines paid by some banks in recent years, the case nonetheless serves as an important reminder that sanctions requirements vary from program to program, and compliance procedures must be tailored accordingly.
In a blog post, the Consumer Financial Protection Bureau (“CFPB”) revealed that it had sent letters requesting information from credit card issuers as to the reasons why actual payment histories are often not being reported to credit bureaus.
In Kelley v. Safe Harbor Managed Account 101, Ltd., the Eighth Circuit Court of Appeals endorsed a broad view of parties protected from avoidance claims related to certain derivative and financial contracts (“QFCs”), including a securities contract (e.g., purchase and sale of securities).
When the interest rate on a mortgage financing is not fixed, the amount that a borrower may be required to pay may fluctuate depending on changes in the underlying index to which the “margin” or “spread” is tied. While a lender may be comfortable with its underwriting of a financing and the ability of its borrower to service its debt at closing, if the underlying index of a floating rate loan changes over time, the lender’s comfort and the ability of its borrower to service its debt will obviously change. To combat against interest rate volatility, borrowers and lenders usually agree to hedge the interest rate against the uncertainty in the market for floating rate loans. The most common form of such hedging is an “interest rate cap.”
In our last few editions of REF News and Views, we featured the Green Loan Series of articles in which we discussed the emergence of “green loans” and the Green Loan Principles − those principles that form the proposed framework for market standards, guidelines and methodology to be adopted across the green loan market.
The Securities and Exchange Commission (the “SEC”) yesterday proposed amendments to rules and forms relating to ESG disclosures for investment advisors and investment companies. Specifically, the proposed changes seek to expand U.S. funds’ disclosure requirements to clients and shareholders and to prevent misleading and deceptive claims relating to ESG qualifications.
The Consumer Financial Protection Bureau ("CFPB") issued an interpretive rule on May 19, reiterating the authority that states have to pursue companies and individuals that violate federal consumer financial protection laws, including the Consumer Financial Protection Act of 2010 ("CFPA").
On May 25, 2022, the U.S. Commodity Futures Trading Commission (“CFTC”) conducted a public hearing to consider a request from LedgerX, LLC, d.b.a. FTX US Derivatives (“FTX”), to amend its order of registration as a derivatives clearing organization (“DCO”) to allow direct clearing of listed futures contracts on Bitcoin and Ethereum and other digital assets by retail participants. This is a dramatic departure from a traditional clearing model where retail participants can trade and clear futures only through professional intermediaries – registered and heavily-regulated futures commission merchants (“FCMs”).
This week, Acting Comptroller of the Currency Michael Hsu gave remarks to the DC Blockchain Summit titled “Crypto: A Call to Reset and Recalibrate.”
The G7 Finance Ministers and Central Bank Governors recently met in Petersberg, Germany, from May 18 and 20. They were joined by the heads of the International Monetary Fund, World Bank Group, Organisation for Economic Cooperation and Development, and the Financial Stability Board (“FSB”). The Ukrainian Prime Minister and Finance Minister were also in attendance.
The first in-person ISDA annual general meeting (“AGM”) after the COVID-19 pandemic is wrapping up today in Madrid, Spain. This conference follows the Futures Industry Association Law and Compliance (“FIA L&C”) annual conference held in Washington, D.C. at the end of April, and the topics addressed were essentially similar, albeit approached from a different angle.
The Consumer Financial Protection Bureau (CFPB) issued an advisory opinion on May 9, confirming that for purposes of the Equal Credit Opportunity Act (“ECOA”) and its implementing regulation, Regulation B, the intended breadth of the provisions prohibiting discrimination on the basis of race, color, religion, national origin, sex, marital status and age is to cover not just applicants for credit, but also customers who have already been extended credit.
Earlier this week, Department of the Treasury Secretary Janet Yellen provided testimony and responded to questions from the Senate Banking Committee regarding volatility in cryptocurrencies that are designated to be “stablecoins,” meaning that the value is supposed to remain fixed, on a one-to-one basis with the dollar, and emphasized that a federal framework for regulating digital assets is necessary to avoid “risks to financial stability,” as reported by The Wall Street Journal.
On May 10, 2022, Prince Charles announced in the Queen’s Speech that the Government would bring in new legislation to “strengthen” the UK’s financial services industry to ensure that it acts “in the interest of all people and communities.”
As we mentioned briefly in our newsletter last week, the Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve Board (“FRB”) and the Office of the Comptroller of the Currency (“OCC”) (together, “The Agencies”) issued a notice of proposed rulemaking to amend and update the rules implementing the Community Reinvestment Act (“CRA”). The comment period on the proposal will be open until August 5, 2022.
The Securities and Exchange Commission ("SEC") has renamed and expanded a unit within its Division of Enforcement to address protection of investors in crypto markets.
In May 5, the Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve Board (“FRB”) and the Office of the Comptroller of the Currency (“OCC”) (together, the “Agencies”) issued a notice of proposed rulemaking to amend and update the rules implementing the Community Reinvestment Act (“CRA”). The comment period on the proposal will be open until August 5, 2022.
On April 25, 2022, the UK Transition Plan Taskforce (the “Taskforce”) was formally launched by HM Treasury. The goal of the independent Taskforce is to develop a “gold standard” for climate transition plans. With a two-year mandate and active involvement from regulators (to draw on the Taskforce’s findings and strengthen disclosure rules), industry leaders and academia, the Taskforce will “help to drive decarbonisation by ensuring that financial institutions and companies prepare rigorous plans to achieve net zero and support efforts to tackle greenwashing.”
The Consumer Financial Protection Bureau ("CFPB") announced in a press release issued in conjunction with the release of its latest Supervisory Highlights that it is concerned that financial institutions and other companies involved with auto financing might be incented to step up repossession of cars belonging to borrowers in default.
Alongside the slew of new sanctions imposed in response to Russia’s invasion of Ukraine, the Biden administration also has been laying the groundwork to maximize the impact of those sanctions.
This week, attendees at the FIA L&C conference are gathered in Washington, D.C., for the first time in three years to discuss several issues with significant potential impact on the markets. One such issue is redefining the concept of the trading facility for securities and derivatives.
On April 25, 2022, the UK Financial Conduct Authority (“FCA”) provided an important update relating to the future of the London Inter-Bank Offered Rate (“LIBOR”) benchmark. On its updated Benchmarks Regulation: our powers, policy and decision-making webpage, the FCA has set out the steps it intends to take regarding synthetic sterling LIBOR.
The Consumer Financial Protection Bureau (“CFPB”) recently announced that it is going to exercise authority described as “dormant” to supervise nonbanks that are not otherwise subject to the CFPB’s supervision authority.
Last week, six bank trade associations, including the Bank Policy Institute and the American Bankers Association, submitted a joint comment letter on the Federal Reserve’s re-proposed Guidelines for access to Fed accounts and services that we previously wrote about in March.
In a recent judgement, the UK Supreme Court confirmed that suspects subject to a criminal investigation are entitled, as a general rule, to a reasonable expectation of privacy regarding information relating to the investigation until they are charged.
In this article, the authors discuss a decision by the U.S. Court of Appeals for the Second Circuit in which New York City landlords alleged that certain laws enacted in response to the COVID-19 pandemic were unconstitutional.
Cadwalader partner Ellen Holloman discusses the importance of corporate board gender and racial diversity. Among other things, this practice note surveys state legislation on corporate board diversity and offers best practices for employers on how to create such diversity.
Cadwalader Intellectual Property attorneys Dorothy Auth, Howard Wizenfeld and Dash Cole discuss ownership of patent rights, trade secrects and other IP concerns in today's work from home economy.
Cadwalader partners Jason Halper, Rachel Rodman and Lary Stromfeld, members of the firm's LIBOR Preparedness Team, authored a Reuters article this week.
Modelled on legislation prepared by the ARRC and enacted by New York and other states, on Tuesday the President signed federal legislation addressing legacy contracts that reference LIBOR after it ceases in June 2023. While it is an extremely important part of the LIBOR transition process, the legislation should not replace proactive management of LIBOR portfolios. The attached deck provides a quick overview of the legislation.
Cadwalader attorneys provide an overview of recent securities litigation news from around the world for Lexology GTDT’s “Securities Litigation 2022.” Global Litigation Co-Chair Jason Halper is the contributing editor of the guide.
Across the global markets, the countdown to midnight on New Year’s Eve started long before revelers gathered in Times Square. Regulators had announced that the end of 2021 would also be the end of nearly all tenors of LIBOR in the $400 trillion global market.
The authors discuss an Illinois Court of Appeals decision holding that estoppels are enforceable against a tenant’s subsequent actions and claims.
Cadwalader partner Kevin Roberts provides a review of the recently released Practical Guide to Extradition Law Post-Brexit, published by Law Brief Publishing and edited by Myles Grandison and members of the Temple Garden Chambers.
Across the global markets, the countdown to midnight on New Year’s Eve started long before revelers gathered in Times Square. Regulators had announced that the end of 2021 would also be the end of nearly all tenors of LIBOR in the $400 trillion global market. This presented multiple challenges on two fronts: new transactions needed to find a replacement benchmark(s) as a reference for their borrowing costs and outstanding “legacy” transactions needed to function without disruption following the discontinuance of their embedded benchmark.
In this article, the authors review the elements that should be included in a nonconsolidation opinion delivered to the lender in a structured finance transaction by counsel for the special purpose entity.
Cadwalader Capital Markets partner David Quirolo and special counsel Alex Collins co-authored a chapter in the Loan Market Association’s new book “Leading The Way” The LMA: 25 Years in the Loan Market. The chapter “CLOs and the Securitisation Regulations”, focuses on the application of the Securitisation Regulations to CLOs structured as securitisations and the impact of such regulation on the underlying loans in which CLOs invest.
Dorothy Auth, Head of Cadwalader's Intellectual Property Practice, and attorneys Howard Wizenfeld and Dash Cole look at key IP cases to watch in 2022. They recommend keeping an eye on a U.S. Supreme Court case involving patent eligibility, and two potential Supreme Court cases that could affect the biotech and pharma industries, as well as a case that involves artwork by Andy Warhol.
In recent decades, economic sanctions have emerged as a critical, and sometimes favorite, tool of foreign policy for U.S. presidents and lawmakers of both political parties. With the recent release of the Department of the Treasury’s 2021 Sanctions Review, however, this longstanding trend shows signs of moderating – at least in certain areas – under President Joseph R. Biden. In fact, many of the Review’s recommendations have already been put into practice, reflecting a new approach to economic sanctions.
This article provides guidance on the recent trends in Environmental, Social, and
Governance (ESG), the #MeToo movement (#MeToo), and Black Lives Matter (BLM)
impacting corporate governance and the workplace.
Cadwalader antitrust partner Joel Mitnick and counsel Ngoc Pham Hulbig discuss the decision and its impact on future antitrust litigation, including Google Play store practices.
Cadwalader's Katie McShane discusses potential ESG regulatory reform as it relates to the Fund Finance industry.
Another decision from the FTC could raise the costs of merger reviews for both the parties and the government alike. Cadwalader's Joel Mitnick and Ngoc Hulbig provide insights here.
This practice note provides an overview of the statutes and standards governing the various legal issues implicated by the MeToo (or #MeToo) movement and addresses best practices for conducting sexual harassment workplace investigations in the MeToo era.
The Eighth Circuit recently enforced an arbitration clause despite evidence that the plaintiff never saw the clause or signed the arbitration agreement. Cadwalader's Jason Halper and Adam Magid outline the decision here.
This article provides guidance on the recent trends in the environmental, social and governance, or ESG, arena, and the #MeToo and Black Lives Matter movements influencing corporate governance and the workplace.
Cadwalader's Ellen Holloman and Hyungjoo Han provide guidance on the recent trends in Environmental, Social, and Governance (ESG), the #MeToo movement (#MeToo), and Black Lives Matter (BLM) impacting corporate governance and the workplace.
Cadwalader's Michael Gambro and Michael Ruder co-authored an article in the IFLR ESG Report 2021 which highlights the following:
Challenges facing green bond issuers and investors regarding the development of common disclosure frameworks.
Legislative and regulatory steps that have been taken to address the lack of a clear definition of what qualifies as a green bond.
Risk factor disclosure best practices for green bond offerings, including a sample green bond risk factor.
In this Bloomberg Law Professional Perspective, Cadwalader partner Lary Stromfeld outlines key features of LIBOR legislative initiatives designed to avoid the uncertainty, disputes, litigation, and market disruption that could arise from the trillions of dollars of unremediated legacy transactions.
Cadwalader intellectual property attorneys Dorothy Auth, Howard Wizenfeld, and Dov Hirsch look at the potential impact of some recent and pending IP court decisions. Trends to watch include potential guidance in the areas of patent eligibility, whether AI can be an “inventor,” and protections for Covid-19 vaccines.
Cadwalader’s Joel Mitnick and Ngoc Hulbig co-authored an article in Westlaw Today which highlights the Supreme Court’s recent landmark decision regarding student athlete compensation. This article examines the relevant cases, dating back decades, that ultimately led to this decision and outlines what happens next.
Cadwalader partner Kevin Roberts and associates Duncan Grieve, Shruti Chandhok and Charlotte Glaser have co-authored a chapter titled, “Anti-Money Laundering and Cryptocurrency: Legislative Reform and Enforcement,” in Anti-Money Laundering 2021: A practical cross-border insight into anti-money laundering law, published by International Comparative Legal Guides (ICLG).
In a unanimous decision, the U.S. Supreme Court held that mere retention of estate property after the filing of a bankruptcy petition does not violate Section 362(a)(3). The authors of this article discuss the decision and its implications.
Many companies will look to the Supreme Court's decision in Google v. Oracle for guidance on the scope of Java's copyright protection. Cadwalader Intellectual Property attorneys Dorothy Auth, Howard Wizenfeld and Jaclyn Hellreich provide key takeaways.
Cadwalader attorneys provide an overview of recent securities litigation news from around the world for Lexology GTDT’s “Securities Litigation 2021.” Global Litigation Chair Jason Halper is the contributing editor of the guide.
Commercial mortgage lenders face unique challenges due to LIBOR remediation. The authors of this article explain the challenges, various remediation approaches, and note that there are no simple answers.
Cadwalader partner Nick Shiren and special counsel Alex Collins cover Risk Retention in EU and UK securitisations in a recent practice note for LexisNexis.
Cadwalader partner Kevin Roberts and associates Duncan Grieve and Charlotte Glaser have co-authored a chapter titled, “Publicity: The UK Perspective,” in the fifth edition of The Practitioner's Guide to Global Investigations, published by Global Investigations Review.
As the Biden administration takes the reins in Washington, company general counsels should keep a close watch on the work of The Special Inspector General for Pandemic Recovery (SIGPR). Cadwalader's James Treanor, Cheryl Risell and Kendra Wharton outline what companies should expect from the SIGPR.
The COVID-19 pandemic has had an unparalleled impact on the way we live and work and will have long-lasting implications on the future of commercial real estate. Jessica Wong discusses retail, hospitality, and office properties in the wake of the pandemic.
A district court recently denied an insurance company defendant’s motion to dismiss based on the assertion that COVID-19 does not result in “direct physical loss or direct physical damage” to real property because the same requires an “actual, tangible, permanent, physical alteration of property.” Loren Taub discusses the decision and its implications.
With fund finance surging during the pandemic, Cadwalader partners Samantha Hutchinson and Brian Foster examine how the likes of ‘PRAV’ facilities, preferred equity solutions, and continuation financings can be utilized.
In a recent article for Law360, Cadwalader partner Rachel Rodman and associate Kendra Wharton provide key takeaways from the CFPB's year-end enforcement flurry.
In this article, Cadwalader partner Melis Acuner and associate Emma Farrow analyze practical considerations when invoking and interpreting material adverse effect and change clauses in commercial contracts during the pandemic-era.
Bankruptcies in Mass Torts Cases, Litigating Mass Tort Cases, Supplement (2021)
Cadwalader's Rachel Rodman, Keith Gerver and Kendra Wharton cover the expected boost in consumer financial protection under the Biden administration and at state agencies enforcing consumer protection laws.
Revised SEC rules that took effect in November are intended to modernize reporting requirements. Matthew Dolloff, Erica Hogan and William Mills explain what the changes are and how companies can comply with them.
Cadwalader partner Joel Mitnick and counsel Ngoc Hulbig summarize the FTC’s proposals and offer a high-level analysis of their respective effects on private fund managers and other financial investors.
Cadwalader's Melissa Hinkle, Christopher Dickson and Howard Hawkins Jr. discuss a recent preliminary injunction granted in favor of a borrower enjoining the mezzanine lender from proceeding with a Uniform Commercial Code foreclosure sale of the equity interests in The Mark Hotel.
Lenders continue to face a number of challenges and risks in connection with #PPP loan forgiveness. Cadwalader's Jodi Avergun, Anne Tompkins, Christian Larson and Kendra Wharton, alongside Guidehouse Financial Services' Kathryn Rock and Christopher Sicuranza, outline several challenges and risks lenders face in the coming weeks and months.
With UK-EU negotiations continuing, Cadwalader’s Kevin Roberts and Charlotte Glaser discuss the UK’s anticipated departure from the European Arrest Warrant in an article for New Law Journal.
On June 29, the Supreme Court issued its long-awaited opinion in Seila Law LLC v. Consumer Financial Protection Bureau, finally resolving the question that has dogged the new agency since its inception: Is the leadership structure of the Consumer Financial Protection Bureau (CFPB) constitutional?
Recently proposed U.S. treasury regulations confirm that replacing interbank offered rates with alternative reference rates in certain fi nancial instruments will not be treated as taxable events for U.S. federal income tax purposes.
The COVID-19 pandemic has heightened the importance of certain issues that are ever-present in the lending market - namely, the borrower's desire to minimize costs and maximize repayment flexibility, and the lender’s desire for liquidity in the secondary markets. One loan feature which is emblematic of these somewhat conflicting considerations is a loan term for a lender to make future advances.
Cadwalader's Jodi Avergun, Todd Blanche and Christian Larson provide insights into the practice of imposing monitorships on pharmaceutical companies that are settling alleged or admitted violations of the Controlled Substances Act for Global Investigations Review.
Jason Schwartz describes how an investor can make the most out of a collateralized loan obligation issuer that becomes distressed as a result of economic fallout stemming from the COVID-19 pandemic.
Collateralised loan obligation (CLO) transactions have long been a prolific investor in sub-investment grade corporate debt both in Europe and the US. The combination of the outbreak of SARS-CoV-2 and the related respiratory disease (coronavirus (COVID-19), the impact of coronavirus on such corporate debt and the CLO market’s reliance on such corporate debt has, very quickly, created a perfect storm affecting various aspects of the European CLO market.
Claire Puddicombe, David Quirolo, and Daniel Tobias discuss the impact of COVID-19 on the European CLO market.
Cadwalader's Assia Damianova considers the potential effect on capital relief trades of the current market volatility arising from COVID-19 restrictions.
Technology and medical companies around the world are rising to meet the challenges created by the COVID-19 pandemic, in many cases turning to artificial intelligence (AI) and super computers to develop life-saving treatments for the disease as quickly as possible. While the use of AI will undoubtedly bring tremendous innovation, the data, test results and any inventions resulting from its use will also raise questions about how to best protect these innovations and who should get credit as an inventor.
The authors break down the arguments likely to be heard by the Supreme Court in the “the copyright case of the century” that could determine the fate of software protection.
While the COVID-19 pandemic presents serious challenges to public health and the economy, the extraordinary access of confidential business information at home should present a lurking concern for companies, since employees themselves are typically the largest source of trade secret misappropriation. The Defend Trade Secrets Act (DTSA) provides a way for companies to mitigate the damage caused by the unauthorized dissemination of confidential business information.
U.S. insurer investment in collateralized loan obligations, or CLOs, has increased steadily over the past several years and totaled approximately $122 billion in book/adjusted carrying value as of the end of 2018.
Cadwalader's Anne Tompkins, Lex Urban and Stephen Weiss discuss how legal sports betting has become the latest “third rail” for colleges, universities, and their athletics programs. The authors raise critical questions that administrators and compliance officers should consider as they prepare to implement safeguards to help protect their institutions, student-athletes and the integrity of their sports. Because each college and university has a unique risk profile, the authors also provide tips on how institutions can appropriately tailor their compliance programs.
In Lebanon County Employees’ Retirement Fund, et al. v. AmerisourceBergen Corporation, the Delaware Court of Chancery ordered the inspection of the books and records of AmerisourceBergen Corporation, one of the leading opioid distributors in the country, for the purpose of investigating potential mismanagement or breaches of fiduciary duty in connection with the company’s distribution of opioids.
New proposed vertical merger guidelines from the FTC and DOJ essentially codify the informal lore in the antitrust bar that vertical mergers generally pose less of a potential anticompetitive threat than certain horizontal mergers.
Michael Powell discusses the impact of Alice Corp. v. CLS Bank International on jury trials, including how Alice provides a separate invalidity defense that bypasses certain patent-friendly validity doctrines, such as motivation to combine and the secondary considerations of nonobviousness and how practitioners might tailor jury instructions, verdict forms and trial evidence when an Alice defense will be presented to the jury.
Cadwalader Finance Group co-chair Michael Mascia and partner Wesley Misson are co-authors of the “The State of Play on Overcall Limitations” chapter in the recently released Fund Finance 2020, a comprehensive guide to the fund finance market published by Global Legal Insights.
Cadwalader partner Samantha Hutchinson and senior attorney Amrita Maini are co-authors of “The Secondaries Market: The Rise of GP-led and Preferred Equity Solutions,” a chapter in the recently released Fund Finance 2020, a comprehensive guide to the fund finance market published by Global Legal Insights.
Cadwalader partners Samantha Hutchinson and Nathan Parker are co-authors of the England & Wales chapter in the recently released Fund Finance 2020, a comprehensive guide to the fund finance market published by Global Legal Insights.
Cadwalader's Lex Urban and Stephen Weiss break down the rapidly expanding sports betting industry in America and explain why the stage is set for legal sports betting’s popularity to surge in 2020.
European CMBS transactions have re-emerged at a steady pace for the first time since before the financial crisis. Cadwalader special counsel Sabah Nawaz provides analysis in the Winter 2020 issue of CRE Finance World.
Cadwalader attorneys review the most significant IP issues from 2019, including new IP legislation and U.S. Supreme Court decisions. They offer insights on what’s to come in 2020, including the big news that the Supreme Court will hear the Oracle v Google case relating to copyright infringement of protected software.
As political pressure builds for competition enforcers to protect consumers’ privacy, Joel Mitnick and Monica Martin look at whether U.S. antitrust law provides the means to do so.
https://www.cadwalader.com/uploads/books/ad7aa027855fcbcd86c5b45ddcc22d6b.pdfThis article details important steps every Chinese company should take before entering the U.S. market to protect the intellectual property surrounding their products and to prevent infringing third-party IP in the United States.
The London Interbank Offered Rate (LIBOR) is coming to an end with implications for tax, accounting, and transfer pricing. Sherif Assef, Yosef Lugashi, and Petia Petrova of KPMG LLP, and Jeff Nagle of Cadwalader, Wickersham & Taft LLP outline in Part II of a two-part series the potential for significant modifications for U.S. tax purposes, implications of IRS proposed regulations, how to adapt systems and processes, and associated challenges.
The London Interbank Offered Rate (LIBOR) is coming to an end with implications for tax, accounting, and transfer pricing. Sherif Assef, Yosef Lugashi, and Petia Petrova of KPMG LLP, and Jeff Nagle of Cadwalader, Wickersham & Taft LLP explain in Part I of a two-part series how taxpayers need to prepare for the U.S. LIBOR alternative rate and the impact on intercompany agreements.
Facebook Inc. v. Windy City Innovations LLC is currently pending before the U.S. Court of Appeals for the Federal Circuit. Central to the appeal is the question of whether the Federal Circuit should provide deference under Chevron USA Inc. v. Natural Resources Defense Council Inc. to the Patent Trial and Appeal Board’s precedential decisions. As such, the case has the potential to call the entire Chevron framework into question.
Cadwalader partner Dorothy Auth and associate John Augelli outline what entrepreneurs entering the U.S. market need to know to protect their intellectual property.
The guilty plea by former N.Y. Congressman Chris Collins put the spotlight on insider trading again. The proposed Insider Trading Prohibition Act could clarify the legal haziness that financial institutions, corporate executives, and casual investors regularly wrestle with, but it also raises liability questions for the C-Suite.
Fans and states cheered the U.S. Supreme Court’s May 2018 decision in Murphy v. NCAA giving states the power to authorize sports betting. In some ways, the immediate enthusiasm for the Supreme Court’s ruling may have been premature. Far from authorizing sports betting at the federal level, Murphy v. NCAA merely cleared the way for states to set rules either banning or regulating sports betting within state lines.
In a BrassTax Alert, the Cadwalader Tax team provides insights regarding the Treasury Department and IRS proposed regulations deeming transitions from IBOR to alternative rates a non-taxable event.
In a decision related to the failed leveraged buyout and subsequent bankruptcy of the Tribune Company, the U.S. District Court for the Southern District of New York found that Tribune, the purchaser of stock from its shareholders, employed a bank to effect the two-step leveraged buyout and was a customer of the bank. The authors of this article explain the decision and its implications.
Given the emergence of direct lending as a popular asset class for institutional investors, an Irish treaty fund could be a powerful tool for U.S. managers with access to foreign capital. Cadwalader partner Gregg Jubin provides analysis via Law360.
Cadwalader is pleased to present our inaugural issue of the State Attorney General Insider, a newsletter on the latest notable cases and updates from within the State Attorneys General community.
State attorneys general are banding together to take on Big Tech antitrust issues. Cadwalader attorneys say it remains to be seen whether the investigations will ripen into complaints and, if so, whether they will be rooted in antitrust or involve consumer protections with respect to data privacy.
High-stakes corporate investigations into bribery, corruption and other misconduct can be highly complex. The impulse to let every conceivable stakeholder play a role, while well-intentioned, can often lead to a “too many cooks in the kitchen” situation, undercutting the efficiency and effectiveness of the entire investigative process.
Cadwalader partner Ellen Holloman reflects on being admitted to the bar of the Supreme Court of the United States in this issue of the Federal Bar Council Quarterly.
The recent payment of $50 million to a pair of whistleblowers should serve as a wake-up call to companies that the SEC’s Whistleblower Program is alive and well. The authors provide five key compliance steps to help companies respond to whistleblowers and minimize their associated risks.
The Harvard Law School Forum on Corporate Governance and Financial Regulation published an excerpt of a recent Clients & Friends Memo (Corporate Governance Litigation & Regulation: A Periodic Review and Predictions for the Remainder of 2019) written by members of the Global Litigation practice.
During the past decade there has been a significant shift in the ownership and structure of the private trust business that serves high net worth individuals and families in the United States and abroad.
Stephen Weiss and Christian Larson discuss the Department of Justice’s new interpretation of the Wire Act and its potentially profound impact on the legalization of online and app-based sports betting in America. States and companies that offer online sports betting have much to consider in a suddenly murky legal environment.
Cadwalader’s Ellen Holloman and Jaclyn Hall provide guidance on conducting witness interviews in workplace investigations. This annotated form is a Witness Interview Memorandum (Workplace Investigation) for use by employers and their attorneys to document witness interviews during an internal workplace investigation. The form also includes drafting notes, optional clauses, and alternate clauses.
In this article, Nick Shiren and Alex Collins consider how STS (simple, transparent and standardised) status is achieved under the Securitisation Regulation. This article first appeared in the January issue of Butterworths Journal of International Banking & Financial Law.
In this comprehensive Q&A, the authors review notable recent developments in the provision of private client and offshore services.