Banking And Finance Update - November 2020

Publication Date10 November 2020
SubjectCorporate/Commercial Law, Insolvency/Bankruptcy/Re-structuring, Financial Restructuring, Corporate and Company Law, Insolvency/Bankruptcy
Law FirmDMH Stallard
AuthorDMH Stallard

It is some time since our last bulletin, and it is a very different world. Perhaps one way of encapsulating this year will be Dickens' words: "it was the best of times, it was the worst of times". Many of you, like ourselves, will have had to adapt to remote working and operating in a changed environment as well as coping with difficult personal circumstances. We have appreciated the ongoing support of our clients. In our turn we have been pleased to keep transactions running, deal with the various government backed loan schemes and resolve disputes and other problems.

Our coronavirus hub continues to provide updates on key issues for businesses and personal lives. This bulletin concentrates more generally on issues relevant to the banking and finance field. If you have any queries on the topics in this bulletin or you would like us to cover any particular issues in the future, please get in touch Gwen Godfrey, or your usual contact at DMH Stallard.

Global transition roadmap for LIBOR

Preparations continue to be made for the replacement of the benchmark interest rate, LIBOR, by the end of 2021. The Financial Stability Board (FSB) published its Global Transition Roadmap in October 2020. This sets out the steps which financial institutions and other users of the rate should be taking to ensure an orderly transition.

By now all existing LIBOR based agreements should have been identified and a project plan developed to deal with them, including communicating with customers with LIBOR based agreements extending beyond end 2021, of the need for transition and the steps being taken to move alternative rates.

By the end of 2020 lenders should be able to offer non-LIBOR linked loans or agreements containing language for conversion by end 2021, for example if systems are not already ready to deal with an alternative rate.

By mid 2021, amongst other things, lenders should have assessed all their agreements to determine which need to be and can be amended by end 2021 and made plans for this.

Corporate insolvency and governance - permanent and temporary changes

The Corporate Insolvency and Governance Act 2020 (CIGA 2020) came into force on 26 June 2020 (with some backdated provisions) and subsequent related regulations have been issued. Its objective was to provide businesses with breathing space to continue trading, achieved by introducing greater flexibility to the insolvency regime, temporarily suspending parts of it and temporarily easing company filing and...

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