Monday, 8 September 2014

Firm Focus: Hogan Lovells (Part 1)

If you're going to be spending time at a particular law firm, it is useful to know a bit about what the firm has been doing recently. The struggle I have with this is that I usually read a few articles on the firms 'news' pages, and then think 'so what?', without really knowing what to make of what I've just read.

 Over the next few posts I'm going to be focusing on the work of a few firms, and trying to figure out the 'so what?' aspect.

My first port of call for information on a firm's recent work is usually their 'News & Publications' webpage
One recent post on the Hogan Lovells website, for example, is

New UKLA confirmations required for new issuances (4th September)

Initial questions: 
What does UKLA stand for?
What are issuances?

I usually have a quick read-through of the article to see if any of my initial questions are answered, and to see what other questions arise. 

The first paragraph of the article states that UKLA stands for UK Listing Authority, but I still am not sure what issuances are, so I turn to Investopedia (it's always handy to have an Investopedia tab open), which informs me that "the process of offering securities [is] an attempt to raise funds. Companies may issue bonds or shares to investors as a method of financing the business." 

I think  an old-school 5Ws (who, what, where, when, why) analysis can be a good way of summarising an article. Quite helpfully, some of these Ws are addressed directly in the article.

What is happening?
A new EU regulation means that entities specified within Article 5 of the regulation are prohibited from "the direct or indirect, purchasing, selling, providing brokering or assistance in the issuance of, or otherwise dealing with transferable securities and money-market instruments with a maturity exceeding 90 days, issued after 1 August 2014."  From 1 August 2014, Issuers must "confirm that they do not fall within Article 5(b) or (c) of the Regulation" 

"The Financial Conduct Authority (FCA) has stated that, for so long as the sanctions remain in force, it does not expect to admit securities to listing which are issued after 1 August by issuers within the scope of the Regulation."

The article states that the regulation imposes "certain restrictive measures in view of Russia's purported actions de-stabilising the situation in Ukraine." It is therefore key to have at least some understanding of the Russian-Ukrainian conflict. The regulation is a sanction on Russian institutions (see below).

Who is affected?
According to Article 5 of the regulation, you are affected if you are :

(a) a major credit institution or other major institution having an explicit mandate to promote competitiveness of the Russian economy, its diversification and encouragement of investment, established in Russia with over 50 % public ownership or control as of 1 August 2014, as listed in Annex III; or
(b) a legal person, entity or body established outside the Union whose proprietary rights are owned for more than 50 % by an entity listed in Annex III; or

(c) a legal person, entity or body acting on behalf or at the direction of an entity referred to in point (b) of this paragraph or listed in Annex III.

The regulation came into force on 1 August 2014

This regulation affects the European Union 

Back to my very first question; so what? 
Why did Hogan Lovells publish this article? The first clue is the 'Capital Markets Briefing' at the top of the page. There is also a list of contacts who specialise in Equity Capital Markets within Hogan Lovells. The regulation will affect the transactions they are involved in, and it is likely that clients will need advice on how these regulations affect them. 

Read more:
Official Journal of the European Union

In my next post I'll be looking at another article regarding Hogan Lovells, but from a different source. I hope this post was useful!


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