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Law Decree 145 of December 23 2013, converted into law with amendments by Law 9 of February 21 2014, (Decree 145) has introduced wide-ranging amendments to Law 130 of April 30 1999 (the Securitisation Law). The five most relevant amendments are discussed below.

Alexei Bonamin Ricardo Mastropasqua On December 20 2013, the Brazilian Exchange Securities Commission (CVM) issued a set of rules which regulate the rendering of services related to the Brazilian capital markets' infrastructure, as follows: (i) CVM Instruction 541 regulates matters regarding the centralised deposit of securities; (ii) CVM Instruction 542 governs the rendering of securities custody services; and (iii) CVM Instruction 543 regulates securities bookkeeping services and the issuance of securities certificates. In accordance with CVM Instruction 541, the centralised deposit service of securities comprises the following activities: (i) securities' safekeeping by the central depository; (ii) controlling the chain of ownership of securities in the deposit accounts maintained on behalf of investors; (iii) restricting practices related to securities' disposal by the ultimate investor or by any third party outside the central depository environment; and (iv) the handling of trading instructions and of incidental events that affect the deposited securities, with the corresponding records on the deposit accounts. CVM Instruction 541 does not apply to positions held in the derivatives market outside the central depository environment. However, it does apply to the establishment of liens and encumbrances on positions held in derivative agreements of any kind, provided that the central depository is also authorised to provide registration services to such agreements. CVM Instruction 541 also applies to financial bills and other instruments that are subject to the jurisdiction of CVM.

Takeho Ujino The Act on Special Provisions of Civil Court Procedures for Collective Recovery of Property Damage of Consumers (Act 96 of 2013 – the Act) was promulgated on December 11 2013, and is scheduled to come into force within three years – the specific date to be designated by a cabinet order. The Act introduces a new class action system that sets out procedures which enable a group of consumers to recover damages collectively in a simple and prompt manner (the system). The system consists of two stages. In the first stage, the court will render a declaratory judgment on the common liabilities of the accused business operator, which must arise from a common legal and factual cause and be shared by multiple aggrieved consumers (common liabilities). Only a specified qualified consumer organisation certified by the Prime Minister as fulfilling the requirements of the system may file a first stage procedure. If the organisation succeeds at the first stage, the amount to be paid to each aggrieved consumer will be determined at the second stage, during which the group of aggrieved consumers delegates the resolution of their claims to the organisation, which then brings the relevant claims to the court. The court will then issue a decision regarding the amount of compensation that can be recovered from the accused business operator by each of the aggrieved consumers.

UBS’s purchase of StabFund from Swiss National Bank ended the stabilisation transaction it launched in 2008. Here’s what it means for the country’s banks

An employee share incentive plan (SIP) enables employees to acquire and hold shares in their employing company. They are generally implemented by employer companies in order to incentivise and retain employees (participants), and for such participants to receive indirect benefits from the appreciation in the growth of the company. Therefore, whilst such schemes are beneficial to the employee, they indirectly benefit the employer company. Employees with a vested interest in the success and performance of a company are more motivated to work, as their investment is based upon the performance of the company. SIPs can potentially lead to tax benefits for the employer company and the employee.

Soonghee Lee In late 2013, the Supreme Court rendered a decision involving the issue of whether the contents of an investment prospectus is contractually binding if it differs from the contents of the trust agreement provided to the investor under an investment trust agreement. In this case, the plaintiffs claimed damages against financial companies on the grounds that the asset management company, without the plaintiffs' prior consent, changed the transaction counterparty to Lehman Brothers Asia, which was different to that stated in the investment prospectus. Further, they stated that the sales companies sold more than W20 billion ($18.5 million) of beneficiary certificates for the fund without considering the possibility of such change in transaction counterparties, and therefore, since the plaintiffs were provided information which made it impossible for them to be aware of the relevant facts (due to the different investment subject and investment limit from those contained in the investment prospectus) such acts constituted tortious conduct and default of contractual obligations. At the appellate level (before appeal to the Supreme Court), the plaintiffs partially prevailed against the asset management company. But the Supreme Court reversed the appellate court's decision on the grounds that (among others): (i) since the part of the investment prospectus which stated that the transaction counterparty to the OTC derivative products was BNP Paribas, cannot be viewed as merely an elaboration on the terms of the trust agreement, such contents cannot be viewed as a part of the terms of the investment trust agreement and contractually binding; and (ii) given that the bankruptcy of Lehman Brothers could not have been predicted, the change of the transaction counterparty to the OTC derivative product due to unavoidable circumstances, with a payment guarantee of Lehman Brothers (which has a similar credit rating as BNP Paribas) cannot be viewed as a breach of the investment prospectus or breach of fiduciary duty.

The incoming UK framework increases the accountability of individuals at the top of financial services firms. Harry Edwards of Herbert Smith Freehills assesses the regulators’ and market’s key considerations under the new rules

Are banks and Bitcoin firms at the start of a beautiful friendship? Bitcoin and banking need each other. So why can't the two get along? Since their creation, Bitcoin and other virtual currencies have lived in a murky world, with their anonymity and separation from official government bodies raising concerns. That has allowed the technology to capitalise on the best of the market, creating new ways to process payments, and transfer and exchange funds. Over this same period, the banking industry has faced greater regulation and political scrutiny. New requirements are adding to the sector's costs and processing times, cutting into traditional profit centres. A partnership between virtual currency firms and traditional financial institutions could benefit both their business and customers.

Alibaba has announced that it will list in the US, concluding speculation over whether New York or Hong Kong would host what's expected to be 2014's biggest initial public offering (IPO).

IFLR's cover story this month looks at developments in contingent convertible bonds (also known as CoCos), and the rapid maturation of the bank capital market. CoCos are bonds that are designed to convert into shares or be wiped out if a bank runs into trouble. Because these securities receive a regulatory seal of approval as a way for banks to build loss-absorbing capital buffers, the instruments are quickly gaining popularity. Indeed, Santander and Danske Bank have both recently issued CoCos. Even Nationwide, a mutual with no equity into which the bonds can convert, has now found a way to enter the market.