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Securitization specialists are carefully considering an announcement by Eurostat that it intends to change the way it looks at sovereign debt securitizations when drawing up country balance sheets.

Finance lawyers are calling on the European Commission to drop proposals for a new takeover directive, which they say could damage Europe's capital markets. In an article in this month's IFLR, the chairman of the company law committee of the City of London Law Society, James Palmer, calls on The High Level Group of Company Law Experts which is making the recommendations in a report to the commission, to think again.

The UK treasury has stated that proposals to change rules that allow investors to defer tax payments on hedge funds earnings are at a very early stage after criticism of a recent consultation paper. The report on offshore funds states that British residents should pay tax on overseas investments as they would with UK-based investments. The report goes on to suggest that investors should pay tax on an annual basis rather than when they close out their position.

A recent ruling clarified the extent to which selling shareholders are liable under US securities law. By Christian Droop and Sarah Casey Otte of Milbank, Tweed, Hadley & McCloy LLP

Canada's courts have recently introduced new uncertainties to the country's mergers and acquisitions regime with decisions regarding the acquisition (by way of a plan of arrangement) of Pacifica Papers by Norske Skog Canada Limited. While almost 74% of Pacifica's shareholders voted in favour of the arrangement, the transaction was opposed by two minority shareholders (the dissident shareholders), which together held 20% of the shares.

Brazilian financial institutions can now enter into credit derivative agreements to transfer risks relating to credits to each other. These credits may be the result of loans, financing or lease contracts, securities, guarantees, credit derivatives or other financial or commercial contracts implying credit risks, negotiated on the domestic market. The financial institutions must make a commitment to keeping a technically-capable manager responsible for the credit derivatives before the Central Bank of Brazil. This comes about as a result of the Central Bank enacting Circular 3.106 regulating credit derivative transactions on April 10 2002. This had previously been authorized by the National Monetary Council's Resolution 2.933 of February 28 2002.

The UK's Company Law Review Steering Group (the Steering Group) has set out its final proposals for making the law regarding corporate governance – the duties of directors and shareholders and the balance of power between them – more precise and easier to understand, and has suggested areas in which the current position could be improved. Its main conclusions and recommendations in this area are dealt with below.

Along with banking and securities trading, investment fund business is the core area of regulatory protection for investors in the Swiss financial markets. Investors in an investment fund as consumers of financial products have the right to demand a transparent structure of the fund, the use of readable and understandable prospectuses and adequate pricing of the fund manager's services. Moreover, the fund manager should always act in the interests of the investor and take the latter's capacity and willingness to take risks into proper consideration.

A number of urgent reforms to economic and financial legislation in France were adopted on December 11 2001, when the Loi Murcef (loi portant mesures urgentes de réformes à caractère économique et financier), was passed after having been the subject of a double petition before the Conseil Constitutionnel (Constitutional Council). This Act sets out a variety of changes and is divided into five parts. Part I sets out the modifications to be made to the rules governing procurement contracts; Part II relates to the relations between banks and their clients; Part III contains measures in relation to the introduction of the Euro; Part IV addresses the management of certain specific public companies and Part V contains a number of measures dealing with a broad range of other issues.

The question of whether a particular instrument should qualify as debt or capital under Belgian (tax) law is sometimes a heavily debated issue. Since the 1950s Belgian courts have rendered numerous decisions on the qualification of hybrid instruments as the Belgian tax administration disagreed on the legal qualification given to instruments by its issuers and investors. As a growing number of innovative financing instruments are continuously unleashed to the market, the debate on the debt or capital nature of hybrid instruments remains unsettled.