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Banking & Finance Update

Banking & Finance Update

Banking & Finance Update

08.05.2015 NL law

Below is the latest edition of the Stibbe Banking & Finance Update. Occurring six times a year, the Stibbe Banking & Finance Update provides an update on developments in the areas of banking & finance and financial regulation. For the reader's convenience, the Stibbe Banking & Finance Update consists of two parts: the first part providing a summary of case law and other developments relevant to banking & finance, and the second part providing an overview of material new legislation and other developments with respect to financial regulation.

Banking & Finance

Dutch Supreme Court: Termination of a credit agreement may be invalid if, given the facts and circumstances of the matter at hand, the exercise of a termination right is unacceptable according to applicable standards of reasonableness and fairness
The Dutch Supreme Court ruled that the Court of Appeal in Amsterdam had correctly applied applicable standards of reasonableness and fairness, which provide that the termination of a credit agreement may be invalid if the exercise of a termination right is unacceptable according to such standards, taking into account the facts and circumstances of the matter at hand. In addition, the Dutch Supreme Court ruled that the Court of Appeal had not misapplied the standards of reasonableness and fairness by weighing the interests of the bank and the borrower against each other and had duly taken into account the special duty of care owed by the bank pursuant to the applicable general terms and conditions. Read more

Dutch Supreme Court reconsiders its 1989 Vis q.q./NMB Judgment: all bank transfers credited to a payee's bank account after bankruptcy of the payor must be reimbursed to the payor's bankrupt estate
In a judgment dated 20 March 2015, the Dutch Supreme Court ruled that all banks and intermediaries involved in the execution of a bank transfer, including the bank responsible for recording receipt of the money transfer into the account held with it by the payee, qualify as parties whose services are directly or indirectly used by the payor in connection with the bank transfer. Therefore, according to the Dutch Supreme Court, all bank transfers initiated before, but credited to a payee's bank account after, bankruptcy of the payor are now eligible for reimbursement to the payor's bankrupt estate upon demand by the bankruptcy administrator. Read more

Dutch Supreme Court: Dutch courts may refuse to recognize foreign judgments and the enforceability thereof due to the absence of formal enforceability
In a judgment dated 26 September 2014, the Dutch Supreme Court held that in addition to the already existing requirements for recognition of a foreign civil judgment, in the absence of a treaty between the Netherlands and a foreign jurisdiction with respect to the mutual recognition and enforcement of civil judgments, Dutch courts should also take into account whether the foreign judgment is 'formally' enforceable in the jurisdiction from which it originated. Read more

The Court of Appeal in The Hague: the bank did not obtain a right of pledge on moveable assets subject to a retention of title (eigendomsvoorbehoud) because the pledgor went bankrupt prior to satisfaction of its obligation to pay the purchase price for those assets
In its judgment dated 2 September 2014, the Court of Appeal in The Hague ruled that moveable assets obtained subject to a retention of title (eigendomsvoorbehoud) should be considered future assets, and that ownership of such assets will be acquired after satisfaction of the relevant condition precedent (typically, full payment of the purchase price). A right of pledge over future assets created in advance will not be valid if the pledgor goes bankrupt before acquiring ownership of such assets. Read more

The Loan Market Association ("LMA") has recently launched template documentation for pan-European private placement ("PEPP") transactions
According to the LMA the template documentation is launched in response to a low level of transparency and a lack of standardised documentation, which form material barriers to growth of the European private placement market. The LMA PEPP template documents are intended to be used as a starting point for drafting documentation; in practice, a large number of provisions will need to be tailored to the commercial specifics of a given PEPP transaction. Until now, there has not been a pan-European private placement market comparable to the SEC Rule 4(a)(2) private placement (USPP) market in the United States. It will be interesting to observe whether the standardisation attempts by the LMA will indeed result in a more developed PEPP market. An alternative to the LMA PEPP template documentation is offered by the Euro PP Working Group. Read more

Financial Regulation

Introduction of an oath and disciplinary regulations for all Dutch bank employees
At the initiative of the Dutch Banking Association (Nederlandse Vereniging van Banken), the Dutch Financial Markets Amendment Act 2015 (Wijzigingswet financiële markten 2015) introduced an oath for employees in the Dutch financial sector, effective as of 1 April 2015. The oath is applicable to employees of financial undertakings such as banks, insurance companies, investment firms and intermediaries. Disciplinary regulations introduced together with the oath only apply to bank employees. With the introduction of disciplinary regulations, the Dutch banking sector aims to contribute to safeguarding and enhancing the quality of the banking sector. Read more

Amendment of the inducement ban and a draft proposal to regulate crowdfunding
As part of the annual amendments to the laws and regulations relevant for the financial markets, the Dutch legislator is expected to amend the Decree on Conduct of Business Supervision of Financial Undertakings under the Dutch Financial Supervision Act (Besluit gedragstoezicht financiële ondernemingen, the "Decree"). The Dutch legislator is expected to propose amendments to the Decree to include other financial products within the scope of the inducement ban and to regulate crowdfunding. Read more

Dutch Parliament round-table conversations regarding credit restructuring departments of banks
The Dutch financial sector remains subject to scrutiny by the Dutch government. In March 2015, a public hearing was organised by the Standing Committee on Finance of the Dutch Parliament (the “Committee”) with respect to the practices of credit restructuring departments of banks. On this occasion, the Committee invited experts and other people directly involved with this issue to provide an explanation, and to answer questions from Members of Parliament. No official records of these round table conversation are available. We attended the hearing and prepared a summary which is available upon request. Read more

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