Minutes of the 3rd meeting of the European Financial Markets Lawyers Group

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3rd meeting of the European Financial Markets Lawyers Group

Tuesday, 28 March 2000

Room CI, 36th floor, at the ECB in Frankfurt

Agenda

ITEM 1: Approval of the agenda.

ITEM 2: Pledges and transfer of title

A report on the activities of the EU Commission Forum Group on Collateral will be given by the secretary of this Group, Mr Peter Restelli-Nielsen from DG Internal Market. The Forum Group has been established to assist the Commission to prepare a draft an EC Directive dealing with issues related to the cross-border use of collateral with the ultimate goal to provide legal certainty as regards validity and enforceability of collateral in financial transactions cross-border.

Mr Laurie Adams and Mr Ian Jameson will present a new version of their report on pledges in the EU, taking into account the answers received by members of the Group, complemented by a draft proposal for European legislation on a uniform pledge structure in the EU.

In addition, there will be a short presentation of a comparative table, prepared by ECB Legal Services , on specific issues relating to pledges (perfection formalities, enforcements substitution, top-up delivery and use of collateral) and transfer of title (availability of transfer of title arrangements for collateral purposes and availability of repo arrangements in the EU) throughout the EU, serving as a background document.

Special issues for consideration:

•  The members of the Group are requested to consider and comment the draft proposal contained in the report prepared by Mr Laurie Adams and Mr Ian Jameson.

•  The members of the Group are asked to provide, if possible, further information on the issues of legal validity as regards top-up deliveries, the possibility to use pledged collateral and on the availability of transfer of title arrangements for collateral purposes in their jurisdictions.

•  Due to the close connections of the issue discussed by the EFMLG in the context of its work on pledges and transfer of title and the work of the Commission's Forum Group on Collateral, members of the EFMLG are also asked to consider on how to contribute best to the work undertaken by the Commission.

Documents: country analysis; summary; proposal

ITEM 3: Legal concepts of debt

Mr Martin Thomas will present a new survey on concepts of debt in the EU.

Special issues for consideration of the members of the Group:

•  Is there scope for a harmonised structure of debt instruments?

•  If so, would it be beneficial for a fully integrated capital market?

Document: background paper

ITEM 4: Dematerialisation

There will be a short introduction and presentation of a comparative table prepared by ECB Legal Sevices.

Special issues for consideration of the members of the Group:

- Does the lack of a harmonised approach and the remaining variation among Member States in their legal treatment of securities raise issues for cross-border securities transactions that are significant enough to warrant a solution at Community level?

- What initiative could be taken by the Group?

Documents: country analysis

ITEM 5: Force majeure

Mr Niall Lenihan, ECB Legal Services, will give a short presentation of the new force majeure provisions published by the Financial Market Lawyers Group of the Federal Reserve Bank, New York.

Mr Klaus Löber, ECB Legal Services, will present a comparative table on force majeure provisions in the EU.

Special issues for consideration of the members of theGroup:

•  Does the Group think that force majeure provisions in the EU are sufficiently similar to allow for a standard approach?

•  If so, in relation to what areas of financial market business?

Documents: country analysis

ITEM 6: Market documentation update

State of affairs as regards the European Master Agreement, six months since its publication by the EBF. Members of the Group are asked to comment on it and how it is being used and what the users experience is (tour de table).

State of affairs as regards the cross-product master agreement published jointly by various market associations on 17 th February 2000 . Members of the Group are asked to comment on their perception of the new agreement.

ITEM 7: Other matters and follow-up

The members of the Group may wish to recall that the Group was established with the aim of identifying areas where legal matters create barriers against a move towards a fully harmonised European financial market. In the light of that, they are urged to consider in advance of the meeting what problems of this kind the experience of the last six months has revealed.

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