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Employee share trusts (EST) of listed companies established with the purchase of shares, unlike employee share option schemes (ESOP), were not subject to shareholder or Colombo Stock Exchange (CSE) approval until May 2001. The rationale for this was that an ESOP would require an increase in the issued capital of the company, whereas an EST, established by the purchase of shares, does not dilute an existing shareholder's holding. If, however, the company was issuing new shares for the purpose of establishing an EST, then the approval of shareholders and the CSE was required. Under the Companies Act (1982), paragraph (b) of the proviso to §55, a company is expressly empowered to give financial assistance towards the purchase of shares to be held by or for the benefit of employees of the company.

The Financial Services and Markets Act 2000 (FSMA) came into force at midnight on November 30 2001, and includes new provisions controlling banking business transfer schemes.

virt-x, a trading platform launched on June 25 2001, offers trading facilities in the blue chip equities of the FTSE Eurotop 3000, MSCI Europe, S&P 350 and STOXX Europe. While virt-x is a recognized investment exchange under the UK Financial Services Act 1986 and supervised by the Financial Services Authority, the issuers of shares admitted to trading on virt-x remain listed in their chosen jurisdiction (ie Switzerland).

The financial crisis that hit Turkey recently has demonstrated how the country must strengthen its banking system in order to have a robust economy. As part of its efforts to create a sound and stable banking system and to achieve international banking standards, Turkey has been undergoing a fundamental restructuring. After the introduction of the amendments to the Banks Act No 4389 in May 2001, the necessary complementary regulations were also passed. On June 27 2001, the Regulation on the Mergers and Acquisitions of Banks and the Regulation on the Establishment and Activities of Banks were approved, and on June 30 2001, the Provisioning Regulation was introduced. Although the effects of the financial crisis can still be seen, these regulations have demonstrated to foreign investors interested in entering the Turkish banking sector that Turkey is taking the necessary steps for rapid progress.

On December 13 2001 the Finnish government submitted a bill to parliament concerning a number of amendments to be made to the Interest Act. The amendments would, in particular, change the provisions governing penalty interest on overdue payments.

On November 29 2001, the National Monetary Council approved Resolution 2.907, authorizing investment funds in receivables and investment funds in shares of the funds in receivables.

Blake, Cassels & Graydon LLP Box 25

With liberalization in a state of paralysis, India’s legal market remains closed to outsiders. Many observers are concerned that this is hampering both the development of local law firms and the economy as a whole. Nick Ferguson reports

Lawyers at firms throughout Asia are advising on a 17,000km submarine cable that will connect bandwidth technology between China, Hong Kong, Japan, Korea, Singapore, Taiwan and the Philippines. On completion the cable will be able to carry 90 million voice conversations simultaneously.

The Commission des opération de bourse (COB) will soon complete its radical shake-up of securities regulation for the French markets. The reforms were inspired and influenced by the globalization of markets and increased volatility of share prices. The COB has to an extent been forced to follow both the markets and SEC’s lead. However, as Edward Kamman of Skadden, Arps, Slate, Meagher & Flom in Paris explains, the French reforms have much to teach other regulators in the fields of present disclosure and communications restrictions during offerings