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New legislation in Australia removes doubts as to the enforceability of netting in insolvency. It should boost local financial institutions. By John Stumbles and Edward Kerr of Mallesons Stephen Jaques, Sydney

High-yield debt has hit the European market running particularly for issues refinancing acquisition debt. In a two part article, IFLR presents a round table of practitioners, investment bankers and investors to discuss some of the issues that the European market has brought to the US model

The Commission has proposed that the EU Directive on money laundering be extended to activities and professions outside the financial services sector, and that the range of suspicious transactions to which it applies should be broadened to cover the proceeds of serious crimes other than just drug trafficking. The Directive obliges all credit and financial institutions to seek identification of all of their customers entering into a business relationship when a single transaction or series of linked transactions exceed Ecu15,000 (US$16,600) or, even where this threshold is not met, where money laundering is suspected.

In the second of his series considering possible changes to bond documentation to ease sovereign debt problems, Lee C Buchheit of Cleary, Gottlieb, Steen & Hamilton, New York, considers the majority action clause

The Supreme Court of Mexico is reviewing a controversy, Contradiccion de tesis 2/98 y 11/98, that challenges the enforceability of arrangements under which Mexican banks have imposed charges for interest on unpaid interest. The resolution of this matter will affect the many legal disputes which arose in 1995 after the Mexican peso devaluation and the ensuing spike in interest rates (up to 100%) and could have serious financial consequences for an already troubled banking sector.

Settlement systems for national and cross-border payments carry risks relating to the insolvency of participants. A new legal basis for netting systems in the EU provides comfort. By Marianne Walsh and Markus Wellinger of Van Bael & Bellis, Brussels

China has launched a programme of reforms to the regulation of the financial sector. The insurance industry is already open to foreign competition, most in the form of joint ventures. By Jingzhou Tao of Coudert Brothers, Beijing

The Cyprus Stock Exchange (CSE) has embarked on its most ambitious project yet, the creation of an electronic exchange. With a view to improving its connectivity, speeding up securities transactions and cutting costs, the CSE has signed a contract with an Australian computer firm to develop and install the required equipment and software. Full computerization of trading as well as back office procedures, ie clearing and settlement, is scheduled to be operational by mid-1999. The customization and testing of the electronic dealing system is under way. The same system architecture is already used by the Geneva, Moscow and Oslo stock exchanges. Even though the exchange is to go on-line, the trading floor will continue to exist for some time. Remote-terminal-based trading will follow at a later stage. The provision of central clearing facilities for stock exchange transactions under the electronic system was put out to tender and won by a major Cypriot banking institution.

Legislation was recently introduced into New Zealand's parliament to reform various aspects of the law on payments finality and netting arrangements. The aim of these amendments is to increase the efficiency of, and reduce the risk in, New Zealand's financial system. The amendments have been promoted by the Reserve Bank of New Zealand in conjunction with the introduction of real-time gross settlement of high value interbank transactions (see International Financial Law Review, April 1998, page 55). It should be noted, however, that it is proposed that these amendments apply to companies and individuals as well as banks.

The Monetary Authority of Singapore has accepted the recommendations of the Financial Sector Review Group for new disclosure policies for banks, to make Singapore banks more transparent and accountable while having little impact on their balance sheets. The recommendations are expected to be implemented within the financial year, and include: