PF Newsletter: LMA Updates - Quarter One 2016

Latham & Watkins LLP

Legal & Regulatory
BRRD: FCA publishes modification by consent for Article 55 rules
Article 55 of the EU Bank Recovery and Resolution Directive 2014/59 (BRRD) requires European Economic Area (EEA) firms and other in-scope entities to include a contractual recognition of bail-in clause in an extensive range of non-EEA law-governed contracts. The Financial Conduct Authority has now allowed this clause to be modified by consent, through amending IFPRU 11.6, where compliance would not be practicable. The modification is valid until 30 June 2016, or when the relevant rules are amended or revoked, whichever is earlier.

Recovery and resolution: French government proposes to amend insolvency hierarchy among creditors of credit institutions
The French government has announced its intention to amend the insolvency hierarchy amongst creditors of credit institutions, which would apply if the institution has entered into liquidation and resolution of such credit institutions (but without retrospective effect). The proposal amends article L. 613-30-3 of the French code monétaire et financier (Financial Code) to provide a general preference to senior unsecured creditors by introducing a new category of non-preferred senior debts, which would rank below senior unsecured creditors and above subordinated debts. Credit institutions would be allowed to issue debt instruments in the new category by expressly stating, in the issuance document, that the notes rank as non-preferred senior debts referred to in article L. 613-30-3-I 4° of the Financial Code.

To be eligible for this category, the document would have to state that the debt instrument: (a) has an initial maturity of at least one year; and (b) has qualified as a 'non-structured' instrument.

The proposal is currently in the consultation process.

BaFin consults on interpretation guidance on Act on Ring Fencing and Recovery and Resolution Planning for Credit Institutions of 2013
15 January 2016
The German Federal Financial Supervisory Authority (BaFin) has launched a consultation on interpretation guidance on the Act on Ring Fencing and Recovery and Resolution Planning for Credit Institutions of 2013.

Amongst other things, the interpretation guidance covers the Act's applicability, the termination of the trigger and the exceptions from the prohibitions of acting. The guidance also offers some clarification on cross-border activities and certain investment funds that have been opened before the entry into force of the German Capital Investment Act. The consultation period ends on 29 January 2016.

Belgium implements bail-in tool
1 January 2016
The Belgian Banking Law of 25 April 2014, which deals with the structure of banking activities, has been amended to implement the bail-in tool into Belgium law. The provisions relating to the bail-in tool became effective on 1 January 2016.

The new law confirms that any reduction or conversion into equity of a liability to which the bail-in tool has applied does not benefit co-debtors, guarantors or security providers regarding the bailed-in liability. Nevertheless, parties can 'opt out' of this principle and agree that a guarantee or security will not be protected against a bail-in.

Legal & Regulatory
Supreme Court holds that contractual terms will only be implied if necessary
The Supreme Court in the case of Marks & Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd [2015] UKSC 72 has emphasised that English law is strict in its approach to the implication of terms into a contract. Terms will not be implied into a contract simply because doing so would be reasonable, rather, only if without the implied term the contract would lack commercial or practical coherence. The more detailed the contract, the more implying a term will be difficult.

Withholding tax exemption for private placements: commencement and conditions
Regulations have been made introducing the conditions for withholding tax exemption for private placements under section 888A of the Income Tax Act 2007 (inserted by section 23 of the Finance Act 2015).

Under section 888A, tax need not be deducted from interest payments on a qualifying private placement, being a security representing a loan relationship and not listed on a recognised stock exchange, if the conditions in regulations are met. The Qualifying Private Placement Regulations 2015 (SI 2015/2002) entered into force on 1 January 2016.

EU extends economic sanctions against Russia by six months
21 December 2015
The EU Council has extended economic sanctions against Russia until 31 July 2016.
The sanctions were initially introduced for one year in July 2014, in response to Russia's actions in the east of Ukraine, and target certain exchanges with Russia in the financial, energy and defence sectors, and in the area of dual-use goods. The Council had extended the duration of the measures by six months until 31 January 2016, and linked the duration of the sanctions to the complete implementation of the Minsk agreements. However, as the Minsk agreements have not been fully implemented, the duration of the sanctions has been prolonged whilst the Council continues its assessment of progress in implementation.

EBA report recommends introducing net stable funding ratio in the EU
17 December 2015
The EBA has published a report on the impact assessment and calibration of the net stable funding ratio (NSFR) required under the Capital Requirements Regulation (Regulation 575/2013).

The EBA recommends the introduction of an NSFR in the EU to ensure an appropriate stable funding structure relating to the degree of asset illiquidity, to properly mitigate funding risk in banks. The EBA also found that, although the Basel NSFR standard is believed to fit well within the EU banking framework, certain EU specificities should be considered, particularly in the case of trade finance, pass-through models, central counterparties, centralised regulating savings and residential guaranteed loans.
The EBA reported that it had not found strong statistical evidence of significant negative impact of the NSFR on bank lending, financial assets, markets or trading book positions in banks, apart from some possible adjustment in prices. The report found no arguments to exempt certain banks from being subject to an NSFR because of their size, but the EBA will explore further the costs of implementing the reporting requirements for smaller banks.

The Commission is required under Article 510(3) of the CRR, if appropriate, to submit a legislative proposal to the European Parliament and Council of the EU on how to ensure that institutions use stable sources of funding. In considering this, the Commission must take into account the EBA's report.

HM Treasury consults on amendments to UK legislation transposing BRRD
17 December 2015
HM Treasury has launched a consultation on a number of changes intended to clarify and strengthen the UK’s transposition of the Bank Recovery and Resolution Directive (BRRD). In particular, the proposed new measures include:

  • New powers for the Bank of England and HM Treasury to ensure the effectiveness of contractual write-down and conversion provisions by preventing them from being ‘switched off’ by the Banking Act rules on default event rights, where appropriate
  • Two new specific early intervention powers for the PRA and the FCA; the power to:

         o Require the removal and replacement of directors and senior managers
         o Appoint a temporary manager. In addition, there would be new powers for the PRA and FCA to call a shareholder meeting if the management body had been required to call a meeting, and had failed to do so
  • New powers for the Bank of England to resolve a branch of a third country institution, independently of the third country resolution authority, where the relevant conditions are met.

In addition to these measures, the government intends to make further technical changes to clarify the measures transposing the BRRD.

The Treasury has also published a draft statutory instrument containing the new contractual write-down and conversion provisions, the new early intervention powers, and the other changes summarised in chapter 5 of the consultation paper.
The consultation closes on 25 February 2016.

EBA issues final guidelines on institutions' exposures to shadow banking
15 December 2015
The European Banking Authority (EBA) has published its final guidelines on limits on exposures to shadow banking entities that carry out banking activities outside a regulated framework under Article 395 of the Capital Requirements Regulation (Regulation 575/2013).
The guidelines introduce a requirement for EU banks and certain other financial institutions to set limits for their exposures (above a materiality threshold) to shadow banking entities as part of their internal processes. In prescribing the approach institutions should adopt in order to set appropriate individual and aggregate limits for exposures to shadow banking entities, the guidelines will establish a harmonised approach for mitigating the risks identified relating to exposures to shadow banking entities.

The guidelines will apply from 1 January 2017.

IBA publishes feedback statement on the evolution of ICE LIBOR
14 December 2015
ICE Benchmark Administration Ltd (IBA) has published a feedback statement following its July 2015 consultation on the IBA’s second position paper on the evolution of LIBOR.

The feedback statement summarises the feedback to the second position paper, which set out for consultation a waterfall of methodologies Benchmark Submitters must follow in calculating their submissions. The responses to the position paper indicated support for Benchmark Submitters transmitting eligible transaction data to IBA, rather than submissions, and IBA calculating LIBOR rates from the transactional data. The feedback also indicated support for:

  • Including corporations as counterparties (subject to minimum thresholds)
  • Widening the funding locations
  • Increasing currency panel sizes (subject to maintaining the credit quality)

The comments in the feedback statement do not necessarily reflect the final position, and IBA intends to publish a further paper in early 2016 setting the roadmap for the evolution of LIBOR.

LMA publishes recommended form of contractual recognition of bail-in clause
The LMA published a recommended form of clause for use in loan documentation to the extent required by Article 55 of the EU Bank Recovery and Resolution Directive 2014/59 (BRRD) relating to contractual recognition of bail-in. The recommended clause is available on the LMA website, along with a user’s guide, and was assembled and agreed by an experienced working party, consisting of representatives from major banks and a number of law firms.

Article 55 of the BRRD requires EEA firms and other in-scope entities to include a contractual recognition of bail-in clause in an extensive range of non-EEA law-governed contracts. EEA member states were required to implement Article 55 into national law by 1 January 2016, and some states have already done so.

Considering the loan markets’ global nature, Article 55’swide-ranging applicability and the need to promote efficiency in loan markets, the LMA has worked together with the LSTA and APLMA to ensure that their bail-in clauses are as consistent as possible.  As part of the co-operation between the LMA, LSTA, APLMA and also ICMA, each of their forms of bail-in clause (in the case of ICMA, the clause set out in the ICMA AAM v1 New York law schedule) refer to a common EU Bail-In Legislation Schedule, which the LMA has prepared, in order to describe the relevant national implementation legislation and write-down and conversion powers.

The LMA and LSTA also issued a joint statement explaining that differences in the markets in the US and EMEA mean that the LMA and LSTA bail-in clauses matching each other exactly may not be appropriate or possible. As a result, market participants will need to review each bail-in clause and reach their own conclusions as to any modifications that may be required to ensure that each bail-in clause is suitable for the subject document.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Latham & Watkins LLP | Attorney Advertising

Written by:

Latham & Watkins LLP

Latham & Watkins LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at:

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit
  • New Relic - For more information on New Relic cookies, please visit
  • Google Analytics - For more information on Google Analytics cookies, visit To opt-out of being tracked by Google Analytics across all websites visit This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at:

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.