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Africa’s governments are pushing the indigenisation of major projects. For international sponsors and lenders, it introduces home and host country compliance concerns

The path to new debt controls in Europe has been gradual and deliberate. Citi's Kepler Geertsema and Jackie Leggett analyse the trend in the context of the restriction on indebtedness covenant

The region’s multilaterals are moving beyond debt financing. Here’s what co-investors must consider

Luis Gabriel Morcillo-Méndez Maria Camila Ordoñez The Colombian Ministry of Finance enacted Decree 1648 of 2014, by which it incorporated hybrid instruments into the Colombian regulation, particularly in connection with financial institutions. This comes as a result of recommendations made by the Basel Committee on Bank Supervision (BCBS) regarding hybrid instruments and their incorporation as mechanisms for issuers' absorption of losses. By means of such decree, the Ministry included hybrid instruments as part of the additional basic capital of the Colombian institutional entities and established the required criteria for losses absorption. This innovative action allows financial institutions, from now on, to issue hybrid instruments and use them not just as a temporary financing source, but as a future losses absorption mechanism, which will prevent them from an actual liquidation or facilitate their financial recovery.

Besnik Duraj For more than two decades, the Albanian electricity power sector has been facing critical financial and operational problems, as a result of a number of issues and ensuing chain reactions. The most characteristic example is end consumers who do not pay the power distributors, who in turn do not pay the transmission operators, and so forth up to the power producing companies. With the entire electricity power system in a debt downward spiral, a major objective of the Albanian Government for 2015 is the reformation of the power sector by drafting a new bill. The new draft bill was approved during the Council of Ministers meeting on January 14 2015 and sent to the Parliament for debate and approval. Apart from financial goals, the said bill aims at fulfilling Albania's obligations in the context of the Energy Community Treaty. It seeks to harmonise the local power sector legislation with EU directives and rules, with a particular focus on the Third Energy Package for gas and electricity markets.

Oscar Samour Last year, the Salvadoran Congress passed the Investment Funds Law (IFL), which established the possibility of channelling and developing collective investment within the local financial system. As defined in the IFL, an investment fund is a special-purpose vehicle that gathers contributions – generally in cash – from multiple investors to be invested in different types of assets, such as securities, real estate, and financial instruments. Under the IFL, investment funds are administered by a special-purpose stock company (sociedad anónima) called a management company. The management company is created with the sole purpose of investing the contributions from its stockholders – investors – in accordance with its bylaws. The patrimony of the fund is independent from the patrimony of the management company by law, and the contributions from the investors are therefore protected in case of bankruptcy of the management company. Additionally, management companies must design and establish mechanisms for asset and share valuations, and have the proper accounting and operation records as well as a merchandising platform for promoting investment.

Elias Neocleous Since the beginning of 2014, the Cyprus Securities and Exchange Commission (CySEC) has been developing a risk-based supervision framework. By focusing on the entities and activities that are of greatest importance in terms of their potential impact, it aims to increase the effectiveness of its regulatory activities. Consequently, CySEC's assessment of the risk that each individual entity it regulates poses will determine the intensity of supervision. A risk assessment will be performed for all entities at least every year and the outcome will be used to define each entity's monitoring programme for the forthcoming regulatory period. The assessment will be based on the impact, or potential harm that could be caused by a particular set of circumstances, weighted by the estimated probability of those circumstances actually occurring. Risk measures may be quantitative or qualitative. Impact is assessed on the basis of numerical and financial data extracted from the entity's regulatory returns. Probability is assessed on a range of criteria including the entity's governance arrangements and its susceptibility to being used for financial crime.

Oene Marseille Emir Nurmansyah Indonesia's Ministry of Trade has issued a regulation requiring the use of a letter of credit (LC) for the export of certain commodities. Under the new regulation, payments for export of crude palm oil, coals, oil and gas, and certain minerals including steel, gold, and nickel are to be done by way of an LC. Payments from export of manufactured goods are exempted from the regulation. The regulation also mandates that the payment price stated in the LC should not be lower than the world market price of the exported goods. Further, the paying bank in this process is required to be a qualified domestic bank (Bank Devisa di dalam negeri). LC payment performed by a foreign branch of an Indonesian-headquartered bank is disallowed.

Alexei Bonamin The Brazilian mutual fund industry, the sixth largest in the world, has been primarily regulated by Instruction 409 from the Brazilian Securities Commission (Comissão de Valores Mobiliários – CVM) for the past 10 years. On July 1 2015, this will be revoked and replaced by Instruction 555, issued by the CVM on December 17 2014, which will then govern the incorporation, management, functioning and disclosure of information of mutual funds.

John Breslin Callaghan Kennedy The Irish parliament is considering draft legislation to regulate the activity of loan portfolio servicing – the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015. The Bill has the sensible policy aim of ensuring that relevant Irish borrowers (natural persons and small and medium-sized enterprises (SMEs) retain the protections they have under Irish law if their loans are sold by Irish-authorised credit providers to unregulated purchasers.