FCA expresses concern over use of delegated authorities in general insurance

A recent FCA report on the use of delegated authorities in general insurance serves as a warning to insurers, in particular, to look carefully at whether current arrangements are “fit for purpose”.  Where they are not, changes must be made.  The FCA can be expected to take action against firms whose mishandling of this type of arrangement has caused customer detriment.

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EU extends duration of sanctions against Russia and Crimea & Sevastopol

The EU has recently announced an extension of its sanctions imposed in response to the situation in Ukraine. EU leaders had previously confirmed that the duration of sanctions affecting Russia would be linked to the implementation of the Minsk Agreements, currently foreseen to be completed by 31 December 2015. The EU has therefore taken steps to extend the validity of its sanctions against Russia beyond this period; the underlying Council Decisions would otherwise have expired before the Minsk Agreements are expected to be fully implemented.

This briefing provides a summary of the new EU legislation and the revised expiry dates of the various measures. There have been no substantive changes to the restrictive measures and EU persons should therefore continue to comply with all applicable measures.

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German Federal Supreme Court: a pro-forma application for conciliation of an insufficiently specified misselling claim will not be effective to suspend limitation

In a landmark decision dated 18 June 2015, the German Federal Supreme Court (Bundesgerichtshof, “BGH”) decided that pro-forma applications for conciliation (Güteverfahren) do not suspend the limitation period for misselling claims if the applications are too generic and do not contain details of the financial product concerned, the amount invested, the advice given and of the relief sought by way of the application.  The cases determined by BGH related to private investors who had used model form applications for conciliation which had been drafted by lawyers, and offered to the wider public; they have been adopted by a significant number of investors.  The BGH announced that the judgment will mean that a large number of misselling claims by private investors will now potentially be time-barred.

Mathias Wittinghofer, Friso Heukamp and Tilmann Hertel from our Frankfurt office consider the decision further below.  Continue reading

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Filed under Asset management, Banking, Commercial Litigation, Germany, Insurance, Investment Funds

Corporate Crime and Investigations second annual conference: Enforcement Perspectives

Following the success of last year’s inaugural event, Herbert Smith Freehills again hosted its flagship Corporate Crime and Investigations conference in London on 9 June 2015.

Under the overall theme of “Enforcement Perspectives”, there were keynote speeches from major enforcement bodies: David Green QC of the Serious Fraud Office, Jamie Symington of the Financial Conduct Authority, Peter McNaught of the Health and Safety Executive and Stephen Blake of the Competition and Markets Authority.

Following thoughts from the agencies, discussion opened up during panel sessions featuring prominent barristers and other corporate crime specialists, including Herbert Smith Freehills partners from across Asia, Europe and the US. Attendees also enjoyed thoughts over lunch from Edward Garnier QC, Member of Parliament and architect of the UK Deferred Prosecution Agreement legislation.

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First phase of new regime on OTC derivatives targeted for implementation in July 2015

The Hong Kong Monetary Authority and the Securities and Futures Commission are on course to implement the first phase of the new over-the-counter derivatives regime in July 2015.  This includes:

  1. the implementation of the broad framework of the new regulatory regime under the Securities and Futures Ordinance; and
  2. the introduction of mandatory reporting requirements and related record keeping obligations, via the Securities and Futures (OTC Derivative Transactions – Reporting and Record Keeping Obligations) Rules , for a specified range of OTC derivative products, namely, certain types of interest rate swaps and non-deliverable forwards.

The Reporting Rules and other related subsidiary legislation have been tabled before the Legislative Council and are targeted to come into effect on 10 July 2015, together with the relevant provisions of the SFO.

It is intended that this first phase of implementation will apply to the regulated entities, ie, authorised institutions, approved money brokers, licensed corporations and central counterparties operating in Hong Kong.   Continue reading

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Indonesian Central Bank issues new guidance circular on the Obligation to Use Rupiah for transactions in Indonesia

On 1 June 2015, Bank Indonesia issued a circular letter No. 17/11/DKSP on the Obligation to Use Rupiah in the Territory of Indonesia (“Circular Letter”) to supplement Bank Indonesia’s Regulation No. 17/3/PBI/2015 on the Obligation to Use Rupiah in the Territory of Indonesia issued on 31 March 2015 (“Regulation”). The Regulation contains broad provisions requiring, among other things, that Rupiah is used to settle financial obligations and other payment transactions taking place in the Territory of Indonesia (unless certain limited exemptions apply). The Circular Letter emphasizes the territorial principle underlying the obligation to use Rupiah and seeks to clarify certain provisions under the Regulation, including with regards to the “strategic infrastructure projects” exemption, the obligation imposed on business entities to state the price for goods and/or services in Indonesia only in Rupiah, and the means to be used by Bank Indonesia to monitor compliance with the Regulation.   Continue reading

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UK: Fair and Effective Markets Review publishes its final report

The Fair and Effective Markets Review (FEMR) has published its final report, setting out 21 recommendations to help restore trust in the wholesale Fixed Income, Currency and Commodity (FICC) markets.  The report follows the consultation which concluded on 30 January 2015.  The BoE has launched an open forum which will build on aspects of the FEMR report.

The recommendations are as follows: Continue reading

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Filed under Bank of England, Banking, FCA, PRA, Regulatory Reform

New guide to anti-corruption regulation in Asia Pacific launched

Over the past two years we have witnessed an exponential increase in global efforts to combat corruption.  Nowhere is this more visible than Asia, where a number of countries have recently passed new anti-corruption legislation or taken steps to strengthen their existing anti-corruption frameworks.  Local anti-corruption laws should now be the main compliance concern for companies doing business or investing in Asia Pacific.

Our updated Guide to Anti-corruption Regulation in Asia Pacific navigates the complexities of both extra-territorial statutes and domestic laws to provide a practical guide to applicable anti-bribery legislation and enforcement regimes.  As well as including new chapters on Australia and Myanmar, we have introduced a checklist at the end of each chapter.  This gives readers an at a glance summary of the ‘need to know’ legal and enforcement issues. Read more of this post

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Filed under Asia, Australia, Bribery and Corruption, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Macau, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam

Irish court endorses use of predictive coding for disclosure

A recent decision of the High Court in the Republic of Ireland has endorsed the use of predictive coding for a disclosure exercise, rejecting the opposing party’s insistence on a linear manual review of all the keyword responsive documents and its arguments that this form of technology assisted document review was not compatible with the relevant disclosure obligations: Irish Bank Resolution Corporation Limited & Ors v Sean Quinn & Ors [2015] IEHC 175.

Predictive coding has been endorsed and even advocated by the US courts since 2012.  US case law has moved beyond Magistrate Judge Andrew Peck’s initial decision in Da Silva Moore v. Publicis Group, 287 F.R.D. 182 (S.D.N.Y. Feb. 24, 2012) agreeing to the use of predictive coding (which was the main decision referred to by the Irish High Court) to his more recent 2015 decision in Rio Tinto Plc v. Vale S.A., 1:14-cv-3042 (S.D.N.Y. Mar. 2, 2015) in which he remarked that “In the three years since Da Silva Moore, the case law has developed to the point that it is now black letter law that where the producing party wants to utilize [technology assisted review] for document review, courts will permit it.”

To date, however, predictive coding has been used relatively infrequently in English litigation, though Herbert Smith Freehills has used it in a number of matters on behalf of our clients.  The recent Irish decision appears to be the first endorsement of the technology by courts in Europe.  Celina McGregor, a senior associate in our London office, and Alan Simpson, deputy practice group lead (Disputes) in our Belfast office, outline the decision below.  Read more from their post.

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Filed under Commercial Litigation, Europe

EU amends sanctions against Libya and Syria

The EU has recently made certain amendments to its sanctions in relation to Libya and Syria. We provide further details of the changes below but, in summary:

  • the criteria for designating individuals and entities as subject to the Libya-related asset freeze have been amended;
  • certain amendments have been made to the existing Libya asset freeze list;
  • certain other non-substantive amendments have been made to the EU regulation setting out the Libyan sanctions;
  • sanctions against Syria have been extended for another year;
  • the list of Syrian individuals and entities subject to the asset freeze has been amended, with one addition and one deletion; and
  • the EU prohibition on the import, export or transfer of cultural property illegally removed from Syria has been extended to cover property removed on or after 15 March 2011.

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Filed under Corporate Crime, Sanctions and Money Laundering, Uncategorized