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Soonghee Lee Youngwoo Park The Korea Exchange (KRX) opened the marketplace for exchange traded notes (ETN) on November 17 2014. ETN are derivative combined securities that guarantee the same rate of return as that of the underlying index at maturity. They are simpler than equity-linked securities (ELS) in structure and tradable prior to maturity. Since they are derivative combined securities, ETN have the same legal characteristics as equity linked warrants (ELW) and ELS, but differ in structure from ELW and ELS because they are a product linked to the underlying index. Moreover, although ETN provide the return in a similar manner as exchange traded funds (ETF) since both are indexed to the underlying asset, ETN differ from ETF in that they provide a return based on the underlying index at maturity after subtracting the fund fees. Participants of the capital market anticipate that the ETN market, introduced in an effort to advance the Korean derivative products market, will satisfy ordinary investors' demand for a variety of new financial products in the existing low growth, low interest rate environment. Participants also believe that securities firms would be afforded an opportunity to increase their profitability and competitiveness from more varied product offerings. The backdrop for introduction of the ETN marketplace can be explained as follows. The number of investors who are seeking medium risk and rate of return, rather than traditional products such as stocks and bonds, increased in the rapidly aging society. In addition, there arose the need to develop new financial products (such as index linked structured products) so that ordinary investors could make investments in more varied product offerings. Commentators anticipate that there will be more investment opportunities for ordinary investors because the introduction of ETN allows direct investment with a smaller investment amount in various asset classes, while it was previously difficult for such investors to understand and compare the profit structures of derivative combined securities products. Moreover, if index-linked structured products that were previously traded outside the exchange begin to be traded on the exchange, then issues such as misselling, system risk, and low price transparency would be resolved. This would lead to better protection for investors, and ultimately, the creation of profitable products for securities firms. On the other hand, while various pensions and funds are important institutional investors that make the market and provide liquidity as liquidity providers, it has been reported that pensions and funds would not participate in the ETN market in the early stage of the launch because of internal fund management regulations, tax issues, and lack of perceived attractiveness of the market. Therefore, appropriate measures need to be provided to deal with such issues.

Discussion about how to tackle market structure and the opaque activities of dark pools has left one group feeling a little left out: the regulated.

Daniel Bader Ruth Bloch-Riemer In a popular referendum on November 30 2014, Swiss voters decided by a clear majority of 59.2% on the retention of the lump-sum taxation regime on a federal, cantonal and communal level. A separate vote in the Canton of Geneva had the same result on the cantonal level in Geneva: a majority of 68.7% of the Geneva voters decided on the retention of the lump-sum taxation regime on the Geneva cantonal level. Besides the retention of the lump-sum taxation regime, Swiss voters also clearly decided against the so-called Ecopop referendum, which would have foreseen restrictive requirements for immigration to Switzerland.

Ananda Radhakrishnan, Norton Rose Fulbright Andrew Smith, Covington & Burling Emil Infante, DLA Piper In New York, KATTEN MUCHIN ROSENMAN lured M&A and capital markets partner S Ward Atterbury from White & Case. Known for having worked on Visa's $17.9 billion floatation in 2008, Atterbury regularly advises lenders and borrowers on credit agreements and convertible notes. Another notable move in New York came in the form of SCHULTE ROTH & ZABEL'S hire of special counsel Frank Steinherr from Paul Weiss Rifkind Wharton & Garrison. In the restructuring space, BLANK ROME lured Rick Antonoff from Clifford Chance to its office in Manhattan. Antonoff's creditor-focussed restructuring practice counts American Airlines, the Los Angeles Dodgers and Arcapita among its clients. WILLIAMS MULLEN added Philip Kennedy as a business and corporate partner in its Raleigh, North Carolina, office. A former in-house counsel at Xerium Technologies, he advises clients on M&A, financings, strategic planning, and regulatory compliance.

Six months after becoming chief of the global OTC trade body, Scott O’Malia discusses his plans for the cross-border derivative market

In the UK the most notable moves came at KING & SPALDING, which hired two US qualified securities partners to expand its capital markets team in the City. Markus Bauman joined from Latham & Watkins while Tom O'Neill had previously practiced at Linklaters. Both partners act on debt and equity matters including IPOs, rights offerings, investment and high-yield bonds, and block trades.

The last major regulatory reform under Basel III has been announced. But will the measures prevent another crisis?

Luis Gabriel Morcillo Maria Camila Ordoñez To facilitate access of small and medium-sized enterprises (SMEs) to local capital markets, the Colombian Ministry of Finance enacted Decree 1019 of 2014 to alleviate registration burdens in the Colombian alternative equity and fixed income market (Alternative Market, or Segundo Mercado). This reform will allow smaller companies and not recurrent issuers to finance their operations through capital markets. This will offer attractive returns, as are usual from these type of issuers, to institutional investors (those authorised to invest in the Segundo Mercado). Through the reform, when the Superintendence of Finance has validated the registry requirements, its supervision powers are transferred to the issuer, its directors and to all its financial and legal advisors, in a such a way that all involved advisors will be liable for the entirety and completeness of the information disclosed in the offering documents. With this new procedure, registration periods are considerably reduced and it is in the best interest of SMEs to set up a diligent offering process and sufficient documentation to obtain an automatic registry before the National Registry of Securities and Issuers (RNVE) within a few days of filing to launch the offering.

Five months have passed since the Alternative Investment Fund Managers Directive (AIFMD) was implemented in Norway. Since July 1 2014, a relatively large number of applications have been filed with the Financial Supervisory Authority of Norway (FSAN), concerning both marketing in Norway of non-EEA alternative investment funds (AIFs) of EEA alternative investment fund managers (AIFMs) and AIFs of non-EEA AIFMs. The FSAN have slowly but steadily been working through the pile of applications and after a somewhat slow start in July and August, have now increased the pace. To date, approximately 30% of the filed applications have been handled. Of these, approximately 65% relate to non-EEA AIFs of non-EEA AIFMs and 35% relate to non-EEA AIFs of EEA AIFMs.

Till Spillmann Luca Jagmetti The Swiss Federal Supreme Court has recently ruled that up-stream and cross-stream loans must be entered into at arm's length terms. If not at arm's length, the decision seems to suggest that the loans constitute de facto distributions and may only be granted for an amount that does not exceed the lender's freely distributable reserves. The court also imposed stringent requirements on satisfying the arm's length test. In addition, the court held that an up-stream or cross-stream loan not entered into at market terms reduces the lender's ability to pay future dividends by the amount corresponding to the loan. Further, the court raised the question of whether Swiss companies are allowed to participate in zero balancing cash pools at all.