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The International
Capital Markets Review
Law Business Research
Third Edition
Editor
Jeffrey Golden
The International Capital Markets Review
Reproduced with permission from Law Business Research Ltd.
This article was first published in The International Capital Markets Review, 3rd edition(published in November 2013 – editor Jeffrey Golden).
For further information please [email protected]
The International
Capital Markets Review
Third Edition
EditorJeffrey Golden
Law Business Research Ltd
ThE MERGERs and acquisiTions REviEw
ThE REsTRucTuRinG REviEw
ThE PRivaTE coMPETiTion EnfoRcEMEnT REviEw
ThE disPuTE REsoLuTion REviEw
ThE EMPLoyMEnT Law REviEw
ThE PuBLic coMPETiTion EnfoRcEMEnT REviEw
ThE BankinG REGuLaTion REviEw
ThE inTERnaTionaL aRBiTRaTion REviEw
ThE MERGER conTRoL REviEw
ThE TEchnoLoGy, MEdia and TELEcoMMunicaTions REviEw
ThE inwaRd invEsTMEnT and inTERnaTionaL TaxaTion REviEw
ThE coRPoRaTE GovERnancE REviEw
ThE coRPoRaTE iMMiGRaTion REviEw
ThE inTERnaTionaL invEsTiGaTions REviEw
ThE PRoJEcTs and consTRucTion REviEw
ThE inTERnaTionaL caPiTaL MaRkETs REviEw
ThE REaL EsTaTE Law REviEw
ThE PRivaTE EquiTy REviEw
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PuBLishER Gideon Roberton
BusinEss dEvELoPMEnT ManaGERs adam sargent, nick Barette
MaRkETinG ManaGERs katherine Jablonowska, Thomas Lee, James spearing, felicity Bown
PuBLishinG assisTanT Lucy Brewer
MaRkETinG assisTanT chloe Mclauchlan
PRoducTion cooRdinaToR Lydia Gerges
hEad of EdiToRiaL PRoducTion adam Myers
PRoducTion EdiToR Robbie kelly
suBEdiToR caroline Rawson
EdiToR-in-chiEf callum campbell
ManaGinG diREcToR Richard davey
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The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book:
afRidi & anGELL LEGaL consuLTanTs
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BBh, advokÁTnÍ kancELÁŘ, v.o.s.
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fEnxun PaRTnERs
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kiM & chanG
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MaPLEs and caLdER
Mkono & co advocaTEs
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Acknowledgements
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Paksoy
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syciP saLaZaR hERnandEZ & GaTMaiTan
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iii
Editor’s Prefaces ..................................................................................................viiJeffrey Golden
Chapter 1 ausTRaLia ...............................................................................1Greg Hammond and Rowan Russell
Chapter 2 BELGiuM ................................................................................20Sylvia Kierszenbaum and Willem Van de Wiele
Chapter 3 BRaZiL ....................................................................................35Marcelo Maria Santos and Denis Morelli
Chapter 4 china .....................................................................................47Xusheng Yang
Chapter 5 cZEch REPuBLic ................................................................61Tomáš Sedláček and Zdeněk Husták
Chapter 6 dEnMaRk ..............................................................................68Emil Deleuran, Henrik Laursen, Jef Nymand Hounsgaard and Catherine Tholstrup
Chapter 7 Eu ovERviEw .......................................................................83Oliver Kessler and Stefanie Zugelder
Chapter 8 finLand ................................................................................95Ari-Pekka Saanio
Chapter 9 fRancE ................................................................................104Antoine Maffei and Olivier Hubert
ConTenTs
iv
Contents
Chapter 10 GERMany ............................................................................129Kai A Schaffelhuber
Chapter 11 hunGaRy ............................................................................140Norbert Hete and Tamás Kubassek
Chapter 12 india ....................................................................................149Sonali Sharma and Veena Sivaramakrishnan
Chapter 13 indonEsia ..........................................................................157Yozua Makes
Chapter 14 iRELand...............................................................................169Nollaig Murphy
Chapter 15 iTaLy .....................................................................................184Marcello Gioscia and Gianluigi Pugliese
Chapter 16 JaPan ....................................................................................197Akihiro Wani and Reiko Omachi
Chapter 17 koREa ...................................................................................210Bo Yong Ahn, Hyun Soo Doh and Wooyoung Cho
Chapter 18 LuxEMBouRG ....................................................................223Frank Mausen and Henri Wagner
Chapter 19 nEThERLands ..................................................................243Mariëtte van ’t Westeinde and Martijn Schoonewille
Chapter 20 nEw ZEaLand ...................................................................257Deemple Budhia and John-Paul Rice
Chapter 21 PhiLiPPinEs ........................................................................271Maria Teresa D Mercado-Ferrer, Ronald P De Vera and Carlos Manuel S Prado
v
Contents
Chapter 22 PoLand ...............................................................................284Piotr Lesiński
Chapter 23 Russia ...................................................................................293Vladimir Khrenov
Chapter 24 souTh afRica ...................................................................309Clinton van Loggerenberg and Stephen von Schirnding
Chapter 25 sPain .....................................................................................321David García-Ochoa Mayor and Daniel Pedro Valcarce Fernández
Chapter 26 swiTZERLand ...................................................................333Thomas Bähler and Anna-Antonina Gottret
Chapter 27 TanZania ............................................................................344Kamanga W Kapinga and Anayaty Tahir
Chapter 28 TuRkEy ................................................................................351Ömer Çollak and Erkan Tercan
Chapter 29 uniTEd aRaB EMiRaTEs .................................................363Gregory J Mayew
Chapter 30 uniTEd kinGdoM ...........................................................373Will Pearce, Jonathan Cooklin, Richard Small, Dan Hirschovits and Dominic Foulkes
Chapter 31 uniTEd sTaTEs .................................................................391Bart Capeci
Appendix 1 aBouT ThE auThoRs .....................................................407
Appendix 2 conTRiBuTinG Law fiRMs’ conTacT dETaiLs ...425
vii
Editor’s PrEfacE totHE tHird EditioN
As I write the preface to this third edition of The International Capital Markets Review, my morning newspaper reports that one of the major global banks, having shrunk its workforce by more than 40,000 employees over the past two years, will now embark on a hiring spree to add at least 3,000 additional compliance officers.
It would be nice if the creation of these new jobs evidenced new confidence that capital markets activity is on the rise in a way that will justify more hands on deck. In other words, capital markets lawyers will have something to celebrate if this bolstering of the ranks was thought necessary to ensure that requisite regulatory approvals and transactional paperwork would be in place for a projected expansion in deal flow.
And, indeed, my morning newspaper also reports a new transaction of some significance, namely, Twitter’s filing for a multi-billion dollar international public offering, accompanied by a tweet, of course – but with a true sign-of-the-times disclosure: ‘This Tweet does not constitute an offer of any securities for sale’!
Yes, confirmation of an uptick in deal flow – especially ‘big deals’ flow – would be nice. In the preface to the last edition of this work, I speculated that there were ‘signs that any ‘big freeze’ on post-crisis capital markets transactional work may be thawing’. All the better if the current newspaper reports provide continued and further support for that inference. After all, when our first edition appeared a little over two years ago, the newspapers were saying terrible things about the capital markets.
What is more likely, however, is that this increased staffing aims to cope with regulatory complexity that will now impact the financial markets regardless of any growth and perhaps may even have been designed to slow down the business being done there. That complexity, but also just the scale of recently promulgated new regulation and the practitioner’s resulting challenge in ‘keeping up’ have all encouraged this new third edition. The 8,843 pages of Dodd-Frank rule-making that I reported in my preface to the last edition have now grown to more than 14,000 pages at this time of writing – and approximately 60 per cent of the job remains unfinished. Other key jurisdictions have been catching up. Plus the rules are purposive and aim to change the way things have been done. If compliance and even ethics in the capital markets were ever instinctual, rather than matters to be taught and studied, that is probably a thing of the past.
Editor’s Preface to the Third Edition
viii
The thickness of this volume has grown as well because of the increased number of pages and coverage in it. Nine new contributors (Finland, Indonesia, Italy, the Netherlands, the Philippines, Spain, Switzerland, Tanzania and the UAE) and an overview of EU Directives have been added. Banks are lending less to corporates, which in turn are having to issue more to meet liquidity needs. Moreover, with the low interest rate environment of quantitative easing, central banks are encouraging risk-taking rather than hoarding. For investors, risk-free assets have become very expensive. So we see a growing willingness to get off the traditional highway in search of yield. Investment banks are, as a result, often taking their clients (and their clients’ regular outside counsel) to difficult, or at least less well-known, geographies.
Having a pool of country experts and jurisdictional surveys that facilitate comparative law analysis can be very helpful in this instance. That is exactly what this volume aims to provide: a ‘virtual’ legal network and global road map to help the reader navigate varying, and increasingly difficult, terrain to arrive at right places.
There has been much relevant change in the legal landscape surveyed in the pages that follow. However, what has not changed is our criteria for authors. The invitation to contribute continues to go to ‘first in class’ capital market specialists from leading law firms. I shall be glad if, as a result, the biographical notes and contact details of the contributing firms prove a useful resource as well.
The International Capital Markets Review is not a novel. Impressed I might be, but I would certainly also be surprised by anyone picking up and reading this volume from cover to cover. What I expect instead, and what is certainly the publisher’s intention, is that this work will prove a valuable resource on your shelf. And I hope that you will have plenty of opportunities to take it off the shelf and lots of excuses to draw on the comparative jurisdictional wisdom it offers.
Let me again express my sincere gratitude to our authors for their commitment to the task and their contributions. It remains a privilege to serve as their editor and a source of great pride to keep their company in the pages of this book.
Jeffrey GoldenP.R.I.M.E. Finance FoundationThe HagueOctober 2013
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Editor’s PrEfacE totHE sEcoNd EditioN
It was my thought that we should also include in this second edition of The International Capital Markets Review my preface to the first edition. Written less than a year ago, it captures relevant background and sets out the rationale for this volume in the series. The contemporary importance of the global capital marketplace (and indeed you must again admire its resilience), the staggering volume of trading and the complexity of the products offered in it, and the increased scrutiny being given to such activity by the courts all continue. And, of course, so does the role of the individual – the difference that an informed practitioner can make in the mix, and the risk that follows from not staying up to date.
However, I was delighted, following the interest generated by our first edition, by the publisher’s decision to bring out a second edition so quickly and to expand it. There were several reasons for this. The picture on the regulatory front is much clearer for practitioners than it was a year ago – but no less daunting. According to one recent commentary, in the United States alone, rule-making under the Dodd-Frank report has seen 848 pages of statutory text (which we had before us when the first edition appeared) expand to 8,843 pages of regulation, with only 30 per cent of the required regulation thus far achieved. Incomplete though the picture may look, the timing seems right to take a gulp of what we have got rather than wait for what may be a very long time and perhaps then only to choke on what may be more than any one person can swallow in one go! Regulatory debate and reform in Europe and affecting other key financial centres has been similarly dramatic. Moreover, these are no longer matters of interest to local law practitioners only. Indeed, the extraterritorial reach of the new financial rules in the United States has risen to a global level of attention and has been the stuff of newspaper headlines at the time of writing.
There are also signs that any ‘big freeze’ on post-crisis capital markets transactional work may be thawing. In the debt markets, the search for yield continues. Equities are seen as a potential form of protection in the face of growing concerns about inflation. Participants are coming off the sidelines. Parties can be found to be taking risks. They are not oblivious to risk. They are taking risks grudgingly. But they are taking them. And derivatives (also covered in this volume) are seen as a relevant tool for managing that risk.
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Editor’s Preface to the Second Edition
Most importantly, it is a big world, and international capital markets work hugs a bigger chunk of it than do most practice areas. By expanding our coverage in this second edition to include six new jurisdictions, we also, by virtue of three of them, complete our coverage of the important BRIC countries with the addition of reporting from Brazil, Russia and China. Three other important pieces to the international capital markets puzzle – Belgium, the Czech Republic and New Zealand – also fall into place.
The picture now on offer in these pages is therefore more complete. None of the 24 jurisdictions now surveyed has a monopoly on market innovation, the risks associated with it or the attempts to regulate it. In light of this, international practitioners benefit from this access to a comparative view of relevant law and practice. Providing that benefit – offering sophisticated business-focused analysis of key legal issues in the most significant jurisdictions – remains the inspiration for this volume.
As part of the wider regulatory debate, there have been calls to curtail risk-taking and even innovation itself. This wishful thinking seems to miss the point that, if they are not human rights, risk-taking and innovation are hardwired into human nature. More logical would be to keep up, think laterally from the collective experience of others, learn from the attention given to key issues by the courts (and from our mistakes) and ‘cherry-pick’ best practices wherever these can be identified and demonstrated to be effective.
Once again, I want to thank sincerely and congratulate our authors. They have been selected to contribute to this work based on their professional standing and peer approvals. Their willingness to share with us the benefits of their knowledge and experience is a true professional courtesy. Of course, it is an honour and a privilege to continue to serve as their editor in compiling this edition.
Jeffrey GoldenLondon School of Economics and Political ScienceLondonNovember 2012
xi
Editor’s PrEfacE totHE first EditioN
Since the recent financial markets crisis (or crises, depending on your point of view), international capital markets (ICM) law and practice are no longer the esoteric topics that arguably they once were.
It used to be that there was no greater ‘show-stopper’ to a cocktail party or dinner conversation than to announce oneself to be an ICM lawyer. Nowadays, however, it is not unusual for such conversations to focus – at the initiation of others and in an animated way – on matters such as derivatives or sovereign debt. Indeed, even taxi drivers seem to have a strong view on the way the global capital markets function (or at least on the compensation of investment bankers). ICM lawyers, as a result, can stand tall in more social settings. Their views are thought to be particularly relevant, and so we should not be surprised if they are suddenly seen as the centre of attention – ‘holding court’, so to speak. This edition is designed to help ICM lawyers speak authoritatively on such occasions.
In part, the interest in what ICM lawyers have to say stems from the fact that the amounts represented by current ICM activities are staggering. The volume of outstanding over-the-counter derivatives contracts alone was last reported by the Bank for International Settlements (BIS) as exceeding $700 trillion. Add to this the fact that the BIS reported combined notional outstandings of more than $180 trillion for derivative financial instruments (futures and options) traded on organised exchanges. Crisis or crises notwithstanding, ICM transactions continue apace: one has to admire the resilience. At the time of writing, it is reported that the ‘IPO machine is set to roar back into life’, with 11 flotations due in the United States in the space of a single week. As Gandhi said: ‘Capital in some form or another will always be needed.’
The current interest in the subject also stems from the fact that our newspapers are full of the stuff too. No longer confined to the back pages of pink-sheet issues, stories from the ICM vie for our attention on the front pages of our most widely read editions. Much attention of late has been given to regulation, and much of the coverage in the pages of this book will also report on relevant regulation and regulatory developments; but regulation is merely ‘preventive medicine’. To continue the analogy, the courts are our ‘hospitals’. Accordingly, we have also asked our contributors to comment on any lessons to be learned from the courts in their home jurisdictions. Have the judges got it right? Judges who understand finance can, by fleshing out laws and regulations and applying them to
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Editor’s Preface to the First Edition
facts perhaps unforeseen, help in the battle to mitigate systemic risk. Judges who do not understand finance – given the increase in financial regulation, the amounts involved, and the considerable reliance on standard contracts and terms (and the need therefore for a uniform reading of these) – may themselves be a source of systemic risk.
ICM lawyers are receiving greater attention because there is no denying that many capital market products that are being offered are complex, and some would argue that the trend is towards increasing complexity. These changing financing practices, combined with technological, regulatory and political changes, account for the considerable challenge that the ICM lawyer faces.
ICM activity by definition shows little respect for national or jurisdictional boundaries. The complete ICM lawyer needs familiarity with comparative law and practice. It would not be surprising if many ICM practitioners felt a measure of insecurity given the pace of change; things are complex and the rules of the game are changing fast – and the transactions can be highly technical. This volume aims to assuage that concern by gathering in one place the insights of leading practitioners on relevant capital market developments in the jurisdictions in which they practise.
The book’s scope on capital markets takes in debt and equity, derivatives, high-yield products, structured finance, repackaging and securitisation. There is a particular focus on international capital markets, with coverage of topics of particular relevance to those carrying out cross-border transactions and practising in global financial markets.
Of course, ICM transactions, technical though they may be, do not take place in a purely mechanical fashion – a human element is involved: someone makes the decision to structure and market the product and someone makes the decision to invest. The thought leadership and experience of individuals makes a difference; this is why we selected the leading practitioners from the jurisdictions surveyed in this volume and gave them this platform to share their insights. The collective experience and reputation of our authors is the hallmark of this work.
The International Capital Markets Review is a guide to current practice in the international capital markets in the most significant jurisdictions worldwide, and it attempts to put relevant law and practice into context. It is designed to help practitioners navigate the complexities of foreign or transnational capital markets matters. With all the pressure – both professional and social – to be up to date and knowledgeable about context and to get things right, we think that there is a space to be filled for an analytical review of the key issues faced by ICM lawyers in each of the important capital market jurisdictions, capturing recent developments but putting them in the context of the jurisdiction’s legal and regulatory structure and selecting the most important matters for comment. This volume, to which leading capital markets practitioners around the world have made valuable contributions, seeks to fill that space.
We hope that lawyers in private practice, in-house counsel and academics will all find it helpful, and I would be remiss if I did not sincerely thank our talented group of authors for their dedicated efforts and excellent work in compiling this edition.
Jeffrey GoldenLondon School of Economics and Political ScienceLondonNovember 2011
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Chapter 2
Belgium
Sylvia Kierszenbaum and Willem Van de Wiele1
I INTRODUCTION
In 2013, one of the key developments was the strengthening of the protection of consumers of financial products and financial services, and the extension of the powers of the Belgian Financial Services and Markets Authority (FSMA) in the field of consumer protection. In this chapter, we also highlight the successful introduction of the legislative framework on covered bonds, as well as a number of other significant developments, such as the implementation of the Prospectus Directive, which was combined with a number of Belgian-specific features worth flagging.
II THE YEAR IN REVIEW
i ‘Twin Peaks II’ and the extended powers of the Belgian FSMA
IntroductionThe law of 30 July 2013 on the strengthening of the protection of consumers of financial products and services, and the powers of the Financial Services and Markets Authority, and containing various other measures (Twin Peaks II Law), has now entered into force (subject to certain transitory provisions and further implementing measures).
During the last two years, the supervisory architecture of the Belgian financial sector has evolved from an integrated supervisory model to a bipolar model, the ‘Twin Peaks’ model. In this model, the National Bank of Belgium (NBB) supervises the macro- and micro-economic stability of the financial system, while the FSMA supervises the markets and ensures that financial intermediaries comply with the conduct of business rules so that they treat their clients loyally, fairly and professionally. The Twin Peaks II
1 Sylvia Kierszenbaum is a partner and Willem Van de Wiele is a senior associate at Allen & Overy LLP.
Belgium
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Law covers aspects related to this supervision by the FSMA. The measures contemplated by the Twin Peaks II Law are aimed at increasing the protection of consumers of financial services and products by strengthening the powers of the FSMA.
The Twin Peaks II Law also includes a number of measures that will harmonise the different rules for the protection of consumers of financial products and services (‘level playing field’).
The Twin Peaks II Law front runs a number of European initiatives in the area of, for example, insurance mediation and market abuse. It also, inter alia, implements the Omnibus I Directive2 and the Short Selling Regulation.3
A law of 31 July 2013 addresses the judicial injunction procedure upon breach of financial regulations. This law is not further discussed here.
We summarise below certain key changes introduced by the Twin Peaks II Law.
Extension of the conduct of business rules for financial service providersThe conduct of business rules are extended to insurance companies, insurance intermediaries and to intermediaries in banking and investment services. Besides this extension, the conduct of business rules will also apply to financial products that include savings, insurance and investment products, and to financial services related to these products.
Financial service providersThe MiFID conduct of business rules that apply to credit institutions and investment firms include both general and specific rules. The Twin Peaks II Law extends these conduct of business rules to insurance companies, insurance intermediaries and to intermediaries in banking and investment services.
Independent intermediaries in banking and investment servicesThe independent intermediaries in banking and investment services were already subject to the general obligation to act in a loyal, fair and professional way in serving the interests of their clients and to provide information to clients that is correct, clear and not misleading. However, they were not subject to the more specific MiFID conduct of business rules. This will change from 1 January 2014, when the independent intermediaries will also be subject to the more specific conduct of business rules (in line
2 Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 amending Directives 98/26/EC, 2002/87/EC, 2003/6/EC,2003/41/EC, 2003/71/EC, 2004/39/EC, 2004/109/EC, 2005/60/EC, 2006/48/EC, 2006/49/EC and 2009/65/EC in respect of the powers of the European Supervisory Authority (European Banking Authority), the European Supervisory Authority (the European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (the European Securities and Markets Authority).
3 Regulation EU No. 236/2012/EU of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps.
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with what is already the case for agents). The specific rules may be adapted by royal decree to take account of the particularities of the role of an intermediary.
Insurance companiesFrom 1 January 2014, insurance companies will be subject to the general obligation to act in a loyal, fair and professional manner in serving the interests of their clients and to provide information to clients that is correct, clear and not misleading. The other more specific conduct of business rules, as well as their concrete implementation measures, will also apply from 1 January 2014, taking into account that the specific rules may be amended on certain points and exceptions may be provided by royal decree, given the specific nature of the insurance sector. Rules for the prevention of conflicts of interest may also be introduced by royal decree.
Insurance intermediariesFrom 1 January 2014, insurance intermediaries will also be subject to the obligation to act in a loyal, fair and professional manner in serving the interests of their clients and to provide information to clients that is correct, clear and not misleading. The insurance intermediaries will have to comply with the conduct of business rules that apply to insurance companies for their intermediary activities. The applicable conduct of business rules may be amended by royal decree to take into account the specific role of insurance intermediaries. The preparatory works of the Twin Peaks II Law clarify that these changes are consistent with the general principles contained in Article 15 of Proposal 2012/0175 of the European Commission of 3 July 2012 for a directive on insurance mediation.
Financial products and servicesThe level playing field introduced by the Twin Peaks II Law and related conduct of business rules relate not only to the financial service providers, but also to the financial products and services covered by these rules. In light of the foregoing, the concepts ‘financial products’ and ‘financial services’ are introduced:a financial products are defined as savings, investment and insurance products. The
preparatory works indicate that pension products of the ‘third pillar’ can in this context be considered as savings, investment or insurance products, depending on the circumstances; and
b financial services are defined as services that relate to one or more financial products. This term is broader than investment services, which is limited to certain services related to financial instruments.
The definition of client is also expanded to include not only any individual or legal entity to which a financial service provider, credit institution or investment firm provides investment services or ancillary services, but also to any individual or legal entity that is a consumer of financial services and financial products contemplated in the relevant provision. The concept of ‘client’ differs from the concept of consumer in the 6 April 2010 Law on Market Practices and Consumer Protection.
The definition of ‘savings account’ determines the scope of application of the newly introduced conduct of business rule in relation to savings accounts. A savings
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account is an account held at a credit institution, excluding payment accounts that are subject to the payment services legislation. The definition only covers cash deposits – not other repayable funds received by credit institutions.
The conduct of business rules in relation to savings accounts applies to Belgian credit institutions and Belgian branches of foreign credit institutions, as well as to foreign credit institutions with cross-border operations, if they market savings accounts in Belgium. With a view to stimulating the loyal, fair and professional treatment of savers, rules may be introduced by royal decree to promote the transparency and comparability of savings accounts marketed in Belgium. Rules may also be established concerning the content and presentation of marketing documents pertaining to savings accounts.
Product knowledgeThe Twin Peaks II Law introduces a requirement that everyone who is in contact with investors should have necessary product knowledge. This requirement applies not only in a MiFID context, but also across products, whether in relation to financial instruments, savings accounts or insurance products (branch 21 or branch 23). The requirement also applies regardless of the status of the person who is in contact with the client (whether as agent, independent intermediary or employee of the financial service provider).
The knowledge required relates to the essential characteristics of the product and the ability to explain these to the client. The preparatory works indicate that aspects such as whether a product is a fixed income product, whether there is a risk of capital loss and the legal characteristics of the product are important. However, it is not necessary that the contact person should know or be able to reproduce all the details of a prospectus.
The preparatory works further specify that the required essential product knowledge is a conduct of business rule that must be complied with on the concrete exercise of the activity and whose scope will vary depending on the products that are offered. The requirement will be more burdensome where the relevant person offers a broader scale of products. It is the obligation of the relevant institution (independent intermediary, credit institution, investment firm or insurance undertaking) to ensure that the persons who are in contact with the public have the required essential product knowledge. The FSMA will have supervisory and sanctioning powers in this respect. The FSMA may also exercise its ability to use ‘mystery shoppers’ (see below) to verify how this conduct of business rule is applied in practice.
Further detailed rules relating to the requirement of essential product knowledge can be introduced by royal decree.
Restrictions on the marketing of products (‘product ban’) and labellingThe FSMA will be able to (1) ban the marketing or certain forms of marketing of financial products; (2) impose labels to promote the transparency of financial products, of certain categories of financial products, or of the risks, prices, remunerations and costs related thereto; and (3) recommend a reference questionnaire for the determination of the investment profile of a consumer of financial products. Measures relating to transparency, through labelling or otherwise, in relation to risks, prices, remunerations and costs may also be implemented by royal decree. The preparatory works refer to the measures of the FSMA in the field of particularly complex structured products (see below).
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Strengthening the powers of the FSMAThe FSMA will have the power to use ‘mystery shoppers’ and to access certain parts of websites normally only available to clients. The FSMA will also have the power to request anonymous and aggregated information from external mediation services on the nature of the most frequent complaints and how these services handled these complaints. The purpose of these measures is to enable the FSMA to verify how financial institutions treat their clients in practice.
SanctionsThe power of the FSMA to impose sanctions is extended.
The power of the FSMA to impose injunctions that may be sanctioned by penalties and to publish the fact that it imposes injunctions on financial institutions is streamlined and harmonised across various regulatory regimes. The preparatory works of the Twin Peaks II Law clarify that this enables the FSMA to take proportionate measures on discovering a breach committed by an entity that is subject to its supervision.
Civil liabilityThe rules on civil liability become stricter. A rebuttable presumption is introduced with respect to breaches of conduct of business rules: the investor no longer has to prove the causal link between the breach and the transaction. In other words, there is now a rebuttable presumption that the investor would not have concluded the transaction but for the breach of the conduct of business rules by the service provider.
These liability rules apply to, among others, agents in banking and investment services, Belgian credit institutions and investment firms, Belgian branches of EEA credit institutions and investment firms, credit institutions and investment firms from third countries, management companies of collective investment undertakings established in Belgium and to EEA credit institutions and investment firms with cross-border operations. Insurance companies, insurance intermediaries and intermediaries in banking and investment services may also be made subject to these liability rules by royal decree.
In addition, if the offer of investment products or certain other financial products is made without the required licence or without pre-approval of the prospectus (or other required documents), the investor will be able to request the nullity of the investment transaction. Also, the damage caused by the acquisition, the subscription to the financial product or by the conclusion of the agreement will be deemed to result from the breach.
Market abuse and other restrictionsMeasures related to the trading of financial instrumentsThe powers of the FSMA to suspend the trading of financial instruments in exceptional circumstances that affect the functioning of a Belgian regulated market are extended.
In addition, the FSMA will be able to restrict trades in certain financial instruments in exceptional circumstances that disrupt or risk disrupting the functioning or the stability of a Belgian regulated market. This may relate to one or more financial instruments admitted to trading on the regulated market or to the issuer of those instruments. These measures may directly or indirectly relate to all the financial instruments admitted to trading on the regulated market or to certain specified financial instruments. The
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measures may relate to the trading on the regulated market or outside the market, as well as to the trading of derivative instruments in relation to these financial instruments or to the issuer of these financial instruments or to a company linked to the issuer (such as credit default swaps). Finally, the measures may relate to the trading of these financial instruments as well as to positions relating to one or more of these financial instruments.
Measures related to market abuseRules with respect to market manipulation are extended to manipulation through derivatives and credit default swaps.
The prohibition on market manipulation is extended to instruments that are not admitted to trading on a regulated market or alternative trading system but whose value depends on such financial instruments, and the prohibitions on insider trading and market manipulation are extended to instruments that are not admitted to trading on a regulated market or alternative trading system that relate to the issuer of financial instruments that are so admitted or to a company linked to the issuer. The preparatory works of the Twin Peaks II Law indicate that the extension of the rules to derivatives is in line with the proposed regulation on insider trading and market manipulation issued by the European Commission on 25 October 2011 (2011/0295).
In light of the recent scandals related to the attempted manipulation of LIBOR or EURIBOR, the manipulation of indices can now also be sanctioned. The preparatory works of the Law refer to the draft proposals published by the European Commission on 25 July 2012.
ii Developments affecting debt and equity offerings
PD implementationBelgium has now implemented the PD Amending Directive through the Prospectus Amending Law.4 A number of key Belgian-specific provisions, which go beyond the requirements of the PD Amending Directive,5 are discussed below.
4 The Law of 17 July 2013 amending, with a view to implement Directives 2010/73/EU and 2010/78/EU, the Law of 16 June 2006 on the public offer of investment instruments and the admission to trading on a regulated market of investment instruments, the Law of 2 August 2012 on the supervision of the financial sector and the financial services, the Law of 2 May 2007 on the publication of important participations in issues of which the shares are admitted to trading on a regulated market and holding various measures and the Law of 3 August 2012 on certain forms of collective management of investment portfolios and holding various measures. The Royal Decree of 26 September 2013 contains further implementing measures.
5 Directive 2010/73/EU of the European Parliament and of the Council of 24 November 2010 amending Directives 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market.
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Marketing materialsMarketing materials were already subject to strict supervision by the FSMA: all marketing materials in the context of a public offer are subject to prior approval by the FSMA (also for ‘passported’ offers). The Prospectus Amending Law clarifies that the FSMA will have five business days following approval of the prospectus or receipt of the notification regarding the passporting of the prospectus to approve the marketing materials.6
In certain instances the FSMA already required prominent warnings on the front pages of prospectuses. In its 2012 annual report, the FSMA indicates that it has extended its administrative practice to require these warnings in marketing materials as well (e.g., in a specific file relating to a passported public offer by a holding company, a specific warning was requested – relating to, among other things, the holding structure and the leverage ratio).
Announcements of supplements and withdrawal rightsThe Prospectus Amending Law introduces an additional requirement, not included in the PD Amending Directive: the requirement7 to notify the investors, either individually or through publication in the Belgian national press, of their withdrawal rights following the publication of a prospectus supplement.
Intermediation monopolyUnder existing Belgian legislation, an ‘intermediation monopoly’ already existed (i.e., only certain regulated institutions, such as regulated credit institutions and regulated investment firms are allowed to provide intermediation services in the context of a public offering of investment instruments) (without prejudice to the application of the MiFID rules).
The Prospectus Amending Law extends the intermediation monopoly to certain transactions that do not qualify as a public offer. More specifically, the intermediation monopoly will also apply to offers of investment instruments with a denomination of more than €100,000 and offers of investment instruments requiring a minimum investment of more than €100,000. The stated aim of this amendment is to increase investor protection by preventing unregulated firms from intervening in these types of private placements.
However, the intermediation monopoly will not apply to offers that are made solely to qualified investors, offers that are made to fewer than 150 investors (other than qualified investors) and offers for an aggregate amount of less than €100,000 (which could be relevant, for example, in the context of crowdfunding) (without prejudice to the application of the MiFID rules).
The intermediation monopoly does not prevent an issuer (or offeror) from (1) placing the financial instruments issued (or offered) by it, itself; (2) appointing a regulated bank agent or broker (if the issuer or offeror is a regulated institution such as a credit
6 Previously the law referred to five business days from receipt of the documentation. See Article 60 Section 2 Prospectus Law (as amended).
7 Article 21 Section 7 Prospectus Law (as amended).
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institution or investment firm); or (3) appointing an affiliate, if the offer is targeted at affiliate’s employees.
Takeover legislationThe existing Public Takeover Law8 is broad in scope and applies not only to voting securities, but in principle also to debt securities. The Prospectus Amending Law contains two key amendments to the Public Takeover Law:a the thresholds for a public takeover bid are increased: 150 persons (instead of
100) or an offer for securities with a nominal value of €100,000 per security (instead of €50,000), to align these with the Prospectus Amending Law; and
b an exemption from the definition of public takeover bids (in line with the exemption already existing for offerings under the Prospectus Law) is introduced. This exemption relates to (1) the communication by a qualified intermediary to its clients, who have securities held in its custody, of the fact that a public takeover bid is taking place on these securities outside the Belgian territory; and (2) the acceptance by the bidder of these securities when tendered by Belgian residents. The purpose of this exemption is to allow Belgian residents to tender their securities in the bid without necessarily creating an obligation for the issuer or the custodian to publish a prospectus and thus to prevent Belgian residents from being excluded from public takeover bids taking place abroad.
Fund LegislationThe Prospectus Amending Law also made a number of changes to the Fund Legislation, (e.g., to align the rules on private placements).
CrowdfundingBelgium does not have a statutory framework on crowdfunding. The FSMA has published guidance on crowdfunding, indicating a number of points of attention including under the prospectus legislation, fund legislation and payment services regulation.9
Market trendsOver the last year, we have seen a very active market on the debt side. Retail bond issues remain particularly important in the Belgian market. Also, we have seen a number of exchange offers for retail bonds in the Belgian market. On the equity side, bpost, the Belgian postal operator was the first company to list on Euronext Brussels since 2011. The bpost IPO is the largest on Euronext Brussels since 2007 – before the financial crisis, and (so far) Europe’s second-largest IPO of the year.
8 The Law of 1 April 2007 on Public Takeovers.9 www.fsma.be/~/media/files/fsmafiles/circ/nl/fsma_2012_15.ashx
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iii Developments affecting derivatives, securitisations and other structured products
EMIR communication by the NBB and FSMAThe NBB and the FSMA have published a communication in which they inform the relevant institutions of their obligations under the Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (EMIR). The communication does not provide further Belgian specific guidance as to the application of EMIR.
Moratorium on the distribution of certain complex structured products to retail consumersThe important Belgian market for retail products remains active notwithstanding the voluntary moratorium on the distribution of certain complex structured products to retail consumers.
In our contribution in 2012, we discussed the voluntary moratorium on distributing certain complex structured products to retail investors (the Moratorium) as well as the public consultation of structured products following the introduction of the Moratorium.10 By signing up to the Moratorium, financial institutions undertake not to distribute those structured products to retail consumers, unless certain specific criteria are met. The Moratorium gained widespread acceptance from Belgian market participants, with the vast majority of Belgian distributors of structured products signing up.
In its 2012 annual report,11 the FSMA observed that since the launch of the Moratorium, 414 structured products had been marketed on the Belgian market. All these products were strictly in compliance with the Moratorium and in most cases only contained two mechanisms to determine the return on the product, whereas prior to the introduction of the moratorium, up to 10 mechanisms could be included. Furthermore, the FSMA noted a positive trend both in the number of structured products and in the volume of issues. According to the FSMA, the Moratorium has not impeded the development of the market for structured products, and the products have been able to reconcile the requirements of the Moratorium with consumer demands. In practice, we have seen a continued interest in the Belgian market for retail structured products, traditionally an important market in Europe.
iv Covered bonds – highly successful introduction of the new legal framework
The introduction of a legal framework for the issue of covered bonds was a very significant development on the Belgian debt capital markets in 2012. Belgium was one of the last countries in Europe to have this legal framework.
10 ‘Belgium’, in J Golden (ed.), The International Capital Markets Review, London, Law Business Research Ltd, 2012, p. 24
11 FSMA Annual Report 2012, p. 8 (available at www.fsma.be/~/media/Files/fsmafiles/pub/nl/fsma_2012.ashx, last consulted 29 September 2012).
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While a full discussion of the legal framework is outside the scope of this chapter,12 the Belgian covered bonds framework contemplates a full-on balance structure and does not make use of a special purpose vehicle. Belgian covered bonds may only be issued by Belgian credit institutions specifically authorised to do so by the NBB. The estate of a credit institution that has issued Belgian covered bonds legally comprises a general estate and one or more ring-fenced special estates. The holders of Belgian covered bonds and certain identified creditors have exclusive recourse against the relevant special estate and at the same time maintain a right of recourse against the general estate. The Belgian covered bonds legislation introduces adequate protection mechanisms to make the proposed legal framework particularly robust. Both Moody’s and Fitch commented favourably on the new Belgian covered bonds framework.13
In 2012, Belfius and KBC each established their inaugural €10 billion covered bond programmes. After the inaugural issues under these programmes and following a number of further issues in 2012 and 2013, the following remarks were made in the press: ‘Belgian banks’ prudent approach to the opening of the country’s covered bond market should be the model adopted by Asian and Latin American issuers who are next expected to make use of the financing tool’14 and the chief executive of the Association of German Pfandbrief Banks (VDP), Jens Tolckmitt, declared that ‘it is great to see Belgium up its covered bond market in such a positive fashion’.15
v Cases and dispute settlement16
Belgian spin to the Argentinian bond litigationThe default of the Republic of Argentina on its sovereign debt and the resulting mass of litigation is widely known. The Belgian courts have become involved with aggrieved bondholders attempting to force financial institutions, based in Belgium, and who participate in the payment process, to make certain payments under the bonds in the hope of sidestepping US court decisions on the same issues.
Since 2001 the Republic of Argentina (the Republic) has defaulted on its sovereign debt bonds issued in the 1990s. In 2005 and 2010, in an effort to restructure its debt, the Republic allowed holders of defaulted bonds to exchange their bonds for new ones issued at a rate of 25 to 29 cents on the dollar. The Republic was able to restructure more than 90 per cent of its debt through this exchange. However, a small percentage of holders of old bonds (mainly hedge funds specialised in distressed sovereign debt) did
12 See our article ‘Belgian covered bonds: an overview of the legislative framework’, Butterworths Journal of International Banking and Financial Law, February 2013, p. 102 for a first discussion of the legal framework.
13 Fitch Report 5 June 2013; S&P Report 22 May 2013.14 Reuters, A Donnellan, ‘Covered Bonds: Belgium shows how it’s done’, 7 December 2012,
www.reuters.com/article/2012/12/07/covered-bonds-belgium-idUSL5E8N52TL20121207, last consulted on 29 September 2013.
15 Ibid.16 With thanks to Joost Everaert, Nayni Kaluma and Anthony Verhaegen at Allen & Overy LLP
in Brussels.
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not accept the restructuring and kept their old defaulted bonds. After the restructuring, the Republic has consistently paid the new bond holders (the Exchange holders) while continuing to default on the old bonds. The old bond holders have sought full collection of their debt, mainly before the US courts but also elsewhere.
On 23 February 2012 and 21 November 2012 Judge Griesa (US District Court of the Southern District of New York) in NML Capital Ltd v. Argentina, held that the Republic violated a standard pari passu clause in its old unrestructured bonds and ordered the Republic not to make any payments on new bonds unless it made a ratable payment to the holders of the old bonds, including NML Capital Ltd.
The 23 February 2012 order was challenged before the Court of Appeals of the Second Circuit, as a result of which the matter was remanded to Judge Griesa. This gave rise to Judge Griesa’s 21 November 2012 order, which was again challenged before the Second Circuit.
Pending the second appeal, this US case developed an unexpected Belgian twist.The starting point for the Belgian proceedings is a central issue in the US
proceedings too (i.e., how Judge Griesa’s orders should apply to third parties).On 23 February 2012, Judge Griesa held that, inter alia, the injunctions applied
to ‘all participants in the payment process’, so that ‘those persons and entities who act in active concert or participation with the Republic, to assist the Republic in fulfilling its payment obligations under the Exchange Bonds’ were bound by the order. On 21 November 2012 , Judge Griesa revised the 23 February 2012 order by adding that ‘participants’ included the indenture trustees, the registered owners of the new bonds and the nominees of the depositaries for the new bonds, any institution acting as nominee, the clearing corporations and system, depositaries, operators of clearing systems, settlement agents for the new bonds, the trustee paying agents and transfer agents for the new bonds and generally any other agents engaged by any of the foregoing or the Republic in connection with their obligations under the new bonds.
Judge Griesa expressly named as participants a number of The Bank of New York Mellon entities (several of The Bank of New York Mellon entities act as trustee of the indenture, paying agent and registered owner with respect to the Exchange Bonds) and many other financial institutions (including Euroclear Bank) among others.
The Republic and several non-parties to the proceedings, including The Bank of New York Mellon and a group of Exchange holders (the Eurobondholders) challenged the 21 November 2012 order, in particular its extremely broad scope with respect to third parties.
On 28 November 2012 the Court of Appeals of the Second Circuit stayed Judge Griesa’s orders pending the outcome of the appeal. Practically, this stay meant that parties and non-parties were temporarily not required to comply with the 23 February and 21 November 2012 orders.
While contesting Judge Griesa’s orders before the Second Circuit, the Eurobondholders attempted in parallel to obtain from the Brussels commercial court an injunction in summary proceedings compelling Brussels-based The Bank of New York Mellon SA and Euroclear Bank to effect payment on the due dates in accordance with their respective obligations as paying agent and clearing system. Of all ‘participants’ involved in the chain of payment, the Eurobondholders chose to sue these two Belgian
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defendants because, the Eurobondholders argued, they were the ultimate links in the chain of payment.
The Eurobondholders were trying to obtain from the Belgian court the result they were simultaneously seeking in the appellate proceedings, namely that The Bank of New York Mellon SA and Euroclear Bank continue to pay them, in the event that the stay on Judge Griesa’s orders was lifted.
The Brussels commercial court held on 28 June 2013 that such a claim was so hypothetical, and the Eurobondholders’ alleged damage was so uncertain, that they failed to establish the required interest. Their claim therefore lacked standing.
The court ruled that the claims relied on a series of hypothetical factors because the Eurobondholders had in effect asked the Belgian court to rule that:a if the stay on Judge Griesa’s orders was lifted;b if Judge Griesa’s orders were confirmed on appeal;c if the Republic, despite such orders, proceeded to transfer funds to the participants
for payment to the Exchange holders without effecting any ratable payment to NML Capital; and
d if all participants in the chain of payments then transferred the said funds to The Bank of New York Mellon SA and Euroclear Bank
then The Bank of New York Mellon SA and Euroclear Bank should be obliged to transfer such funds for payment to the Eurobondholders, notwithstanding Judge Griesa’s orders.
Not only did the Eurobondholders seek to have a Belgian court effectively sidestep the effect of the Second Circuit’s appeal judgment, but also, they expressly asked the Second Circuit to withhold judgment on the applicability of Judge Griesa’s orders to The Bank of New York Mellon SA and Euroclear Bank pending determination by the Belgian court.
In effect, the Eurobondholders sought to obtain from the Belgian judge a more favourable decision than they feared the Second Circuit would render (but had not yet rendered) while asking the Second Circuit to abstain from interfering with this potentially, but not certainly, more favourable Belgian decision.
The Belgian episode of this saga is not over. The Eurobondholders have now commenced long form proceedings on the merits (the previous proceedings were summary) before the Brussels commercial court against The Bank of New York Mellon SA and Euroclear Bank.
In the meantime, the Second Circuit confirmed Judge Griesa’s orders on 23 August 2013 but maintained the stay until the US Supreme Court issues, as the case may be, a writ of certiorari.
Class actions: significant impact on securities litigation expected when introducedIn July 2013, the Belgian government announced plans to introduce class actions under Belgian law. Organisations such as consumer organisations would be recognised so that they would receive standing to act on behalf of a number of litigants. The precise content of the new law is still to be determined. The introduction of class actions in Belgium could have a significant impact on securities litigation in Belgium.
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vi Relevant tax law (withholding tax)17
Developments affecting the X/N Clearing SystemOn 9 August 2013, a royal decree (the Royal Decree) was published in the Belgian official journal amending the royal decree that regulates the admission of securities onto the X/N Clearing System (i.e., the Royal Decree of 26 May 1994 on the perception and ‘bonification’ of the withholding tax in accordance with Chapter I of the Law of 6 August 1993 regarding transactions on certain moveable securities) (the X/N Royal Decree). The Royal Decree aims to provide more flexibility regarding the admission of structured securities and securities linked to an underlying instrument to the X/N clearing system. The X/N Royal Decree as amended by the Royal Decree is hereafter referred to as the Amended X/N Royal Decree. The admission of instruments to the X/N Clearing System is relevant for investors as it allows the withholding tax (where applicable) to be dealt with through the clearing system.
Until now, the X/N Clearing System did not permit the admission of fixed income securities the interest rate of which could not be determined on issue or before the start of an interest period. As the exact returns of a considerable range of securities cannot be determined at the outset or even at the beginning of each interest period, a wide range of mainly structured securities or securities linked to an underlying instrument could not be admitted to the X/N clearing system.
The securities that can be admitted to the X/N Clearing System are fixed income securities within the meaning of Article 2, Section 1, 8° of the 1992 Income Tax Code as listed in the Amended X/N Royal Decree. Fixed income securities are, among other things, defined as bonds, savings notes and other similar securities, including securities the returns of which are capitalised or securities that do not give rise to a periodical payment and that have been issued with a discount corresponding to the capitalised interest until the maturity date of the security. It also relates to negotiable instruments. The following instruments are, for example, considered as securities that are similar to bonds: notes, including EMTN notes, real estate certificates, certificates of deposit, treasury certificates, etc.
With regard to fixed income securities, the income includes any sum paid or attributed in excess of the issue price, whether such an attribution takes place at the contractually agreed maturity date or not.
To permit the admission of fixed income securities the income of which is not determinable upon issue or at the start of an interest period to the X/N Clearing System, Article 9/1, introduced in the Amended X/N Royal Decree, determines how to calculate the amount of accrued interest on a value date; this is the amount on which withholding tax is due or in respect of which a ‘bonification’ equal to the withholding tax must be paid. Accrued interest will be determined by reference to the parameters defined on the issue of the securities to determine the return on the contractual maturity date, but, taking into account the occurrence of the transaction, by making a calculation of these parameters when the transaction takes place (i.e., on the value date).
17 With thanks to Patrick Smet, head of the Belgian tax department at Allen & Overy LLP.
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Two main, potentially cumulative, principles are used as a basis for the determination of accrued interest:a where the securities have a fixed rate, accrued interest is calculated pro rata
according to the days elapsed; andb where the income is linked to the evolution of an index, accrued interest is
calculated by considering the value date of the transaction as the maturity date in the income formula originally proposed.
Taking into account the multiple possibilities of the formulas proposed and the practical problems that this could cause the NBB (for example, the availability of indices, problems regarding the programming of formulas, etc.), as operator of the X/N Clearing System the NBB will have the right to refuse a proposal if the X/N Clearing System cannot deal with it from an operational point of view.
This means that whenever fixed income securities the income of which is not determinable on issue or at the start of an interest period are proposed for admission to the X/N Clearing System, the proposed issue will have to be vetted by the NBB to determine whether the X/N Clearing System can deal with such issue from an operational perspective.
vii Other considerations
UCITS IV and AIFMDWhile Belgium implemented UCITS IV in 2012, it has not yet implemented Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). However, the FSMA has published a communication and a document containing ‘Questions and answers on the transitional period provided for by Directive 2011/61/EU, and on the Belgian national provisions for transposing this Directive’.18 During the transitional period (until 22 July 2014), certain collective investment funds can still be marketed under existing Belgian private placement exceptions, but the developments around AIFMD in Belgium will need to be carefully monitored.
Ring-fencingThe Belgian government asked the NBB to conduct a study into whether it is both opportune and practically and financially feasible, to (1) introduce a split between savings banks and investment banks or (2) introduce a retail ring fence. In conducting this study, the NBB was asked to analyse what had been done in other European countries.
The NBB published an interim report in June 2012 and published its final report in July 2013. Generally speaking, the NBB argues for a policy approach that is broader than a single policy of separating a subset of trading activities from deposit-taking banks. In addition to the recommendations targeted at trading activities (which include a capital surcharge for trading activities above a certain level as well as a requirement to separate
18 See the FSMA website: www.fsma.be/~/media/files/fsmafiles/circ/en/2013/fsma_2013_11-1.ashx, and www.fsma.be/~/media/Files/fsmafiles/circ/en/2013/fsma_2013_11.ashx, last consulted 29 September 2013.
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proprietary trading activities above a certain threshold from banks, within another legal entity), the policy recommendations cover the areas of recovery and resolution, savings, and depositor protection. The report argues that this array of policies creates ‘multiple lines of defence’ with regard to the challenge of achieving the goals cited for structural reforms.
The government is expected to discuss the proposals from the NBB, and further political initiatives are expected in this area. It is difficult to predict the exact outcome of these discussions and, in any case, the interplay between the Belgian government’s position and the initiatives at a European level will also have to be closely monitored.
III OUTLOOK AND CONCLUSIONS
We expect the recent high levels of activity in debt capital markets to continue as Belgian issuers continue to look to diversify their sources of funding and the disintermediation trend continues. For certain Belgian issuers, retail bond issues may continue to be an interesting option.
Following the successful introduction of the new legal framework for covered bonds, there is clearly a significant interest in this new instrument issued by Belgian banks.
Following the introduction of the Twin Peaks II Law, we also anticipate that the Belgian regulators will continue to focus on consumer protection. While structured products will undoubtedly remain important, regulatory initiatives in this field will need to be closely monitored.
Bank resolution and ring-fencing are also important points of attention, as legislative initiatives are expected in this field (at the time of going to press).
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Appendix 1
about the authors
SylviA KierSzenbAumAllen & Overy LLPPartner Sylvia Kierszenbaum practises in areas including capital markets, banking and financial services and regulation. She advises on capital markets transactions and financial instruments, structured finance transactions, securitisations and trade receivables finance, regulation of banking activities and financial services, corporate reorganisations, corporate finance and bank lending. She is an expert member of the Febelfin working group advising on the new covered bond legislation.
Ms Kierszenbaum received her law degree from the University of Antwerp and an LLM from Cornell University. She is admitted as an advocate in Belgium and is fluent in English, French and Dutch.
According to Chambers Europe (2012), ‘Sylvia Kierszenbaum receives particular mention for her technical prowess. Clients appreciate that she is “very open and available”.’
Willem vAn de WieleAllen & Overy LLPSenior associate Willem Van de Wiele specialises in debt capital markets transactions and has particular experience in advising on bond issuances and securitisations. He also advises on financial law, in particular on the regulation of banking activities and financial services. He advised on the inaugural covered bond programmes in Belgium, together with Sylvia Kierszenbaum. Mr Van de Wiele is admitted to the Antwerp Bar and the New York Bar. He received his law degree from the University of Ghent and an LLM (in corporate law) from the New York University School of Law. He is recommended by Legal 500 (2013) and IFLR.
About the Authors
408
Allen & OveryAllen & Overy LLPUitbreidingstraat 802600 AntwerpBelgiumTel: +32 3 287 74 [email protected]@allenovery.com
www.allenovery.com
