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The private equity firm’s acquisition of a majority stake in the German hearing aid business used a new-style management participation vehicle and novel warrants

The UK government’s plans to prohibit the use of cancellation schemes on takeovers is expected to lead to an increase in transfer schemes in the country

Brazil’s new law adapts the instrument to local financing needs, but reveals the challenges of making covered bonds work in emerging markets

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

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.

Sotaro Mori On May 30 2014, an act for the partial amendment to the Financial Instruments and Exchange Act or FIEA (Amendment Act) was promulgated. The objective of the Amendment Act is to establish 'measures to enhance the overall attractiveness of Japan's financial and capital markets'. Such measures include, in particular, the promotion of equity crowdfunding in Japan by relaxing the regulation of equity crowdfunding intermediaries. The Amendment Act will become effective by May 30 2015, the exact date to be determined by cabinet order. Equity crowdfunding generally refers to schemes by which start-up companies and investors are connected through the internet so that funds may be collected from a large pool of investors, each generally contributing a small amount. The Amendment Act enables those crowdfunding intermediaries that conduct public offerings or private placements solely through the internet (or other designated electronic means) within the prescribed amounts (to be determined by cabinet order, although the Amendment Act is planned to be applicable for total offerings of less than ¥100 million for which the amount of investment per investor is ¥500,000 or less) to register. They may register as either a Type I crowdfunding operator, where equity interests are offered, or, where fund interests are offered, as a Type II crowdfunding operator. The Amendment Act exempts registered Type I and Type II crowdfunding operators from certain restrictions applicable to other financial business operators, including: (i) restrictions on conducting other business activities; (ii) regulations on posting signs at business offices; and (iii) capital adequacy requirements.

Putri Norlisa Mohd Najib Azleen Mohammed Saleh Effective as of January 2 2015, the base lending rate (BLR) framework was replaced by the base rate (BR) as the new reference rate for retail loan facilities. This forms part of the move to make bank borrowings more transparent for consumers. The effective lending rate (ELR) would be the BR plus a spread. Each financial service provider (FSP) will determine its BR based on its benchmark cost of funds and statutory reserve requirement. The credit risk, liquidity risk, operating cost and the profit margin will be reflected in the spread. Under the new framework, FSPs are required to maintain proper policies and clear governance arrangements for determining the BR, periodic review and changes of the BR. The process, methodology and data used for determining the BR should be documented and made available for review by the Central Bank (Bank Negara Malaysia or BNM) as and when required.

Klaus Henrik Wiese-Hansen Ernst Ravnaas Since 2012, Norwegian tax authorities have focused on the way Norwegian private equity firms have structured their carried interest payments. A common private equity structure in Norway is that the management of the private equity firm owns shares in the fund or directly in the underlying portfolio company, through a private limited liability investment company. Carried interest for the management is connected to these shares. Under carried interest rules, buy-out executives have until recently paid relatively low capital-gains taxes on profits made from buying and selling companies, in the same way investors or entrepreneurs do, as carried interest has mostly been classified as tax-exempted dividends or capital gains. This is odd, Norwegian tax authorities have argued, given that the money wagered on private equity buy-out deals mostly comes from external investors as opposed to the executives (management) themselves. It makes more sense for these profits to be taxed like ordinary salaries, they argue, at a significantly higher tax rate.

Pedro Cortés Marta Mourão On January 5 2015, the Official Gazette published Law 1/2015, which provides for the new legal regime on the system of qualifications in the fields of urban construction and urbanism. This new law will come into force on July 1 2015 and was enacted as a response to the tremendous growth that Macau SAR has been facing in the civil construction and urbanism sectors.