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Andri Aidham Badri Putri Norlisa Mohd Najib Under the Labuan Financial Services and Securities Act 2010 and Labuan Islamic Financial Services and Securities Act 2010, the Labuan Financial Services Authority (LFSA) has recently issued its revised Guidelines on the Establishment of Labuan Mutual Funds, including Islamic Mutual Funds, which came into effect on January 1 2014 (the Guidelines). The issuance of the revised Guidelines emphasises the continued commitment by the LFSA to encourage the establishment of Labuan-based mutual funds.

In 2013, Mauritius proceeded with the inauguration of a modern state-of-the-art passenger terminal at Sir Seewoosagur Ramgoolam International Airport. The new terminal, which covers a total surface area of 57,000 m2, will enable the country to handle 4 million passengers annually (against 2.7 million presently), whilst helping to project Mauritius on the international scene and boost commercial exchanges and the tourism industry. The main idea is to provide the latest in terms of infrastructure in order to increase the number of foreigners entering Mauritius.

Banji Adenusi In December 2013, the Central Bank of Nigeria released the guidelines on the implementation of Basel II/III recommendations of the Basel Committee on Banking Supervision, which implementation took effect from January 2014. While the timeframe for implementation of the minimum capital adequacy computation under Basel II rules will commence in June 2014, the banks have already begun a parallel run of the Basel II capital adequacy computation along with existing Basel I requirements. In specifying the approaches for quantifying the risk-weighted assets for the purpose of determining regulatory capital, the banks are required to adopt the standardised approach in relation to market and credit risks, with the basic indicator approach adopted for operational risk. Rather than adopt a sweeping endorsement of the Basel II/III accords however, the Central Bank (CBN) has modified the guidelines, taking into consideration the present realities of the Nigerian banking system. Credit risk modifications abound in the risk weight assigned to inter-bank transactions and exposures guaranteed by the Federal Government of Nigeria (FGN) or CBN, exposures to FGN or CBN transactions denominated in naira and funded in that currency, amongst others, which carry risk weight of 0%. Other modifications include exposures secured by residential mortgage loans, which carry a risk weight of 100%, compared to the recommended 35% in the Basel II accord. Unrated on-balance sheet securitisation carries a risk weight of 1250%, whereas the Basel II accord provides no risk weight for such transaction.

In late 2013, the Slovak Parliament approved an amendment to the income tax act (the Amendment). One of the objectives of the Amendment is to fight tax evasion. Some of the most interesting changes are: higher withholding rate/tax security; the right to tax Slovak tax non-residents on certain transactions; introduction of tax licences; and, tax rate for legal entities reduced to 22%. Higher withholding rate

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Soonghee Lee In May 2011, an employee at a defendant's branches introduced a discretionary investment agreement operated by a certain investment advisory company to individual investors (the plaintiffs). The investment product was mainly invested in KOSPI 200 options listed on the Korea Exchange using contract monies received by the investment advisory company from investors under discretionary investment agreements. In introducing the investment product, the employee presented and introduced a discretionary investment proposal prepared by the investment advisory company. Later, the employee visited the plaintiffs and prepared an application for the opening of an account, which proposed the plaintiffs' subscription to the investment product, with the defendant as the securities company for transactions. In August 2011, the KOSPI 200 stock price index declined sharply, and the plaintiffs incurred considerable losses. The plaintiffs then filed a suit for damages against the defendant, claiming the defendant had made an investment recommendation and thus had violated the suitability principle and its duty to explain, which should have been observed when the investment recommendation was made, under the Financial Investment Services and Capital Markets Act (FISCMA). In the course of litigation, the defendant argued that no investment recommendation had been made, since the investment product was not sold by the defendant itself, and investment recommendations must be construed as limited in scope to cases where the relevant financial investment business recommends an agreement which it directly handles. The defendant's argument was that it had merely introduced the investment product and, for the plaintiffs' convenience, had assisted in the execution of the contracts. Therefore, the defendant had not made an investment recommendation subject to the suitability principle and the duty to explain. In support of such argument, the defendant stated it did not receive any sales commission or operating income, and did not directly handle the investment product. The court of first instance held that the defendant, as a financial investment business, was in the position of a person recommending the investment product to the plaintiffs. The court held that the employee first presented and explained the discretionary investment proposal to the plaintiffs while introducing the investment product; the plaintiffs only intended to invest after listening to such explanation, and their investment decision seems to have been based on the employee's explanation. As the employee even prepared a confirmation statement on the results of investment tendency screening and a discretionary investment agreement for each of the plaintiffs, in their name, the plaintiffs could reasonably believe that the defendant was performing the role of an intermediary for the discretionary investment agreements, and although the defendant did not obtain any sales commission or operating income, the defendant did earn a transaction fee.

Martin Irwin, Baker & McKenzie Howard Lam, Latham & Watkins SLAUGHTER AND MAY finally broke its lateral hire deadlock by recruiting directly into partnership for the first time in its 125-year history. This piece of history happened in Hong Kong through the hire of Morrison & Foerster's (MoFo) co-head of China capital markets John Moore. Last month saw a string of other hires in the city-state. LATHAM & WATKINS welcomed banking partner Howard Lam from Freshfields Bruckhaus Deringer, while HERBERT SMITH FREEHILLS brought in financial services regulatory expert William Hallatt from Linklaters. WEIL GOTSHAL & MANGES recruited investment funds specialist Albert Cho from Kirkland & Ellis, and DLA PIPER hired restructuring and insolvency partner Mark Fairbairn from O'Melveny & Myers.

In 2010, the US Congress adopted the Hiring Incentives to Restore Employment (Hire) Act which imposed US withholding tax on dividend equivalents embedded in certain cross-border equity swaps that are paid by US persons to foreign counterparties. At the same time, Congress gave the US Treasury authority to expand the scope of the Hire Act US withholding tax rules to other equity derivative instruments. Since then, the Treasury Department has floated a number of proposals to do just that; however, none of the proposals have had much traction. On December 5 2013, the Internal Revenue Service (IRS) proposed a wholly new approach and issued new proposed regulations under the Internal Revenue Code to expand the US withholding tax rules to dividend equivalents on derivatives, including forwards, options, and structured notes. Most surprisingly, the Treasury put a date on the proposed rules: if finally adopted, they will apply from 2016 to payments on certain equity-linked instruments (ELIs) acquired on or after March 5 2014.

Phung Thi Thanh Thao On January 3 2014, the Government of Vietnam issued the much anticipated Decree 01/2014/ND-CP (Decree 1) relating to the purchase by foreign investors of shares in Vietnamese credit institutions. Decree 1 replaces Decree 69/2007/ND-CP of the Government of Vietnam, dated April 20 2007, on the purchase of shares by foreign investors in Vietnamese commercial banks (Decree 69). In addition to banks, the new Decree governs finance companies and finance-leasing companies, providing more opportunities for foreign investment. One feature of Decree 1 is the increased ceiling on foreign shareholding permissible for different categories of foreign investors investing in a credit institution in Vietnam. In particular, while a foreign individual investor's shareholding remains limited to a maximum of 5% of the charter capital of a Vietnamese credit institution, an individual foreign organisation may now hold up to 15% shareholding (previously 10%), and a foreign strategic investor may hold up to 20% (previously 15%).

Katia Merlini, Hogan Lovells Mid-January to mid-February saw a flurry of moves between firms in Paris, several involving Dentons. Among them was the departure of the former Sonier & Associés restructuring and insolvency duo Gabriel Sonier and Caroline Texier. Having left their original boutique to join Salans in 2011, the pair has now made for GIDE LOYRETTE NOUEL. The hire fills a gap at Gide following the loss of department head Oliver Puech to Bredin Prat. Dentons also lost corporate partner Johannes Jonas (also originally from Salans) to mid-sized US firm COHEN & GRESSER, which made the hire to help launch its Paris office. Jonas has an international background, having previously worked with Bruckhaus Westrick Stegemann and Cleary Gottlieb Steen & Hamilton in Germany, the US and France. The launch creates the firm's third office after New York and Seoul.