Banking and Finance

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This month, the UK Financial Conduct Authority formally authorised ICE Benchmark Administration Limited (IBA) to assume responsibility for the administration of the London Interbank Offered Rate (LIBOR).

IBA is a subsidiary of the Intercontinental Exchange Group, a leading global network of exchanges and clearing houses that administers other benchmarks such as the French CAC40 and the Dutch AEX.

Guided by the Wheatley Review

The authorisation of IBA to administer LIBOR reflects one of the key recommendations of the Wheatley…

Saudi, new weekendThe Custodian of the Two Holy Mosques, King Abdullah, announced on Sunday June 23, 2013 that the official working days in Saudi Arabia will change to Sunday to Thursday and the weekend to Friday to Saturday, with effect from June 29, 2013 (the “Royal Decree”).  The change aligns Saudi Arabia with the other members of the Gulf Co-operation Council, Oman having changed its weekend earlier this year, and provides a four working day overlap with other business centres globally. …

The second half of 2012 saw a number of major financial institutions censured for the alleged manipulation of submissions made to the British Bankers’ Association (BBA) for the compilation of BBA LIBOR. In addition to direct enforcement action against those alleged to have participated in such manipulation, regulators have also taken significant steps to reform LIBOR itself and the method by which it is determined.  GCC financial institutions and borrowers will be concerned to ensure that these …

GCC-based family businesses are increasingly looking towards the US commercial real estate market for potential investments. Latham & Watkins recently hosted a seminar in our Abu Dhabi, Dubai, Doha and Riyadh offices to discuss how GCC investors typically structure US commercial real estate investments and what US tax considerations businesses should keep in mind. A panel of four-US based real estate specialists (Richard Kleinman, Associate Director, LaSalle Investment Management, and Latham partners Michelle Kelban, Nathaniel Marrs and Alan Van…

The Basel Committee on Banking Supervision has issued a Report to the G20 Finance Ministers and Central Bank Governors on Basel III Implementation.  The implementation period for Basel III capital requirements starts from 1 January 2013 and includes transitional arrangements until 1 January 2019.  At the time of the report, 8 of the 27 member jurisdictions of the Basel Committee have issued their final set of Basel III related regulations (being Australia, China, Hong Kong SAR, India, Japan, Saudi Arabia, …

Several new laws have taken effect in recent months in the Kingdom of Saudi Arabia from arbitration to the establishment of a centre for registration of lien and the long awaited mortgage law. As part of the restructuring underway in the Saudi Arabian judiciary system, long standing regulations for the resolution of banking disputes in the Kingdom of Saudi Arabia also have been revised. These new reforms represent a welcome step toward achieving greater certainty and predictability in the…

Family-owned businesses continue to drive commercial activities in the economies of the Middle East. According to recent statistics, in the Gulf Cooperation Council (GCC) region alone, family businesses control over 90% of commercial activity.

Today, family businesses are confronted with numerous challenges in the changing economic environment, including governance, globalisation, technology, generational change and innovation.

As family-owned businesses in this region continue to play a major role in the economy, their success going forward depends on their ability to tackle…

Over the last 12 months, structured finance transactions in the Middle East (both Islamic and conventional) have seen increased use of a comparatively new and previously underutilized type of special purpose vehicle (SPV) – the DIFC special purpose company (SPC).

An SPC is a private company limited by shares incorporated under the laws of the Dubai International Financial Centre (the DIFC), a financial free zone located in the Emirate of Dubai with its own body of law and regulations and…

In February, Greece launched its sovereign debt swap, pursuant to which holders of EUR 206 billion of its bonds were invited to swap their existing holdings for a package of instruments with a nominal value of just 46.5 per cent. of the par value of their current bonds. This invitation for voluntary participation in the debt swap is backed by the threat of a retroactive collective action clause, enacted by the Greek parliament shortly before the launch of the invitation…

Sipchem’s recent Mudaraba Sukuk is notable as an economic success and also for its structure.  The financing represented a great addition to the tool kit available to corporate treasurers in Saudi Arabia.

A Sukuk financing typically requires that:

  • An issuer has unencumbered tangible assets available;
  • The assets are Shari’ah compliant (i.e not related to alcohol, pork, gambling etc.);
  • Direct/indirect ownership of those assets vest with the seller/issuer; and
  • The estimated value of the assets is greater than or equal to

…