Following the meetings of the Commission with banks, law firms and Government representatives, it is expected that there will soon be a public consultation on an EU netting directive. EFLMG had a conference call on 21 February 2011 , discussing the latest state of affairs and possible EFMLG steps. Rogier Wezenbeek from the Commission shall join the meeting in order to give EFMLG an update and it would also be a chance for the group to put forward its views. Representatives from ISDA will also attend the meeting, as previously there was a joint EFMLG/ISDA proposal.

Holger Hartenfels

•  English High Court judgements on the construction and effect of Section 2(a)(iii) of the 1992 and 2002 ISDA Master Agreements
On 21 December 2010, in Lomas v JFB Firth Rixson, Inc, the English High Court ruled on an application for directions by the Joint Administrators of Lehman Brothers International ( Europe ) ( LBIE ) as to the true construction and effect of Section 2(a)(iii) of the 1992 and 2002 ISDA Master Agreements. Section 2(a)(iii) provides, amongst other things, that the obligation of each party to make the payments specified in each confirmation is subject to the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing.

•  High Court Judgement on meaning of control in financial collateral arrangements
On 7 May 2010 in Gray & Ors v G-T-P Group Ltd (Re. F2G Realisations Limited (in Liquidation)) the High Court issued an important judgement. This case is of interest because it is the first English case to consider the meaning of 'control' under the Financial Collateral Arrangements (No. 2) Regulations 2003 (the 'Regulations'). The particular floating charge was held to be void against the liquidator due to lack of registration and the Regulations could not be relied upon due to the interpretation of 'control' for the purpose of the Regulations. There are references in the Judgment to 'real legal control' as opposed to simply 'administrative control'.

Helen Moran

Publication of Royal Decree for the Reinforcement of the Financial System (59 kb, pdf)
Presentation on the reform of the saving banks (Cajas) in Spain (265 kb, pdf)

Araceli Leyva

Hubert de Vauplane

There is still a lot of uncertainty as to the scope of the Dodd Frank Act, and its extraterritorial effects, in particular Title VII, which deals with the registration of swap dealers and major swap participants. This can have a significant impact on the business of European banks. The US Commodity Trading Futures Commission provided rather unclear guidance and SIFMA, SocGen, IIB and Davis Polk & Wardwell (on behalf of Barclays, BNP, Deutsche Bank, Royal Bank of Canada , RBS, SocGen and UBS) submitted their position to CFTC, SEC and FED.

Mike Prokop

Reponses were due on the public consultation of the EU Commission on MIFID 2 by 2 February 2010 . A related consultation is on legislative steps for Packaged Retail Investment Products , where the deadline was 31 January 2011 . It is understood that several EFMLG members submitted input on these consultations directly. It is of general interest to go through the key points in order to learn the different views. As regards MIFID, key points include developments in market structures, automated trading, pre- and post-trade transparency, investor protection and provision of investment services, and regulatory framework and suprevisory practices.

Bertrand Brehier

In acknowledging the damages from legal uncertainty in the financial markets, the World Legal Forum and its partners are investigating the establishment of a P anel of R ecognized I nternational M arket E xperts in Finance ( PRIME Finance ), an international tribunal specialized in resolving cases arising from the most sophisticated financial instruments. Through its unique list of experts, comprised of the most recognized market and legal experts on complex financial instruments, arbitration and mediation, PRIME Finance intends to ensure access to authoritative conflict resolution expertise for financial market participants.

Prof. Jeffrey Golden and Ms. Camilla Perera, World Legal Forum Foundation

It is proposed to have an informal discussion about some ideas to develop further the work of the group.

The Chairman

It is proposed to discuss topics to be proposed by the EFMLG for the Quadrilateral meeting and the logistics of the meeting.

The crises had some significant impact on the governance of credit institutions. The presentation will review the relevant legislative developments, including issues relating to the suitability of the banks' senior executives, their remuneration, management of risk, management of conflicts of interest, and the external audit function