Welcome to our November edition of Regulator.
It's been a significant month for the banking sector with the final passage of legislation to allow the introduction of covered bonds into the Australian market. The market is keenly awaiting a rush of issues, with banks looking to take advantage of issuing covered bonds to foreign investors as an alternative to expensive wholesale funding markets. Rowan Russell and Greg Hammond have been closely following the launch of covered bonds in Australia since an initial draft Bill to amend the Banking Act to allow for covered bonds was published in March this year. In this edition of Regulator they provide an overview of the key features of the framework for covered bonds issuance by Australian ADIs.
Another issue with international attention is the push to increase obligations on product issuers and distributors for the suitability of the products they offer to clients. In their article, Jim Boynton and Minny Siu consider the implementation of suitability tests for product issuers and distributors in relation to complex investment products in Hong Kong, Australia and Europe.
The price signalling laws have continued to engender debate and as the legislation creeps closer to being passed we thought it was timely to examine the relationship between price signalling laws and continuous disclosure. Caroline Coops considers the potential price signalling implications of a listed entity complying with its continuous disclosure obligations in her article.
As an adjunct to unfair contract terms, a recent decision in the NSW Court of Appeal has again highlighted the issues around enforcing guarantees when loans are provided solely based on security given by the guarantor without assessing the borrower's ability to repay the money borrowed. In her article, Kate Jackson-Maynes provides an overview of the case.
Also in this edition, John Edstein looks at recent high profile court decisions which have served as reminders that many tax consequences for trusts and their beneficiaries hinge on not just regulatory frameworks but the application of basic trust law principles.
Finally, across the globe, changes are afoot to the European Prospectus requirements as the European Commission responds to concerns that issuers are using final terms to disclose information to investors which should be included in underlying or associated supplementary prospectus. The European Securities and Markets Authority is assisting the Commission and has provided technical advice in the form of several proposals. Joe Newitt from our London office details the proposals and the potential consequences for issuers.
I hope you find the commentary and analysis in this edition useful. As always we welcome any feedback or suggestions you may have for future editions.
Best wishes,
Diana Nicholson