Hello and welcome to the Fides Weekly Update. Here we provide analysis on the key news stories in legal and compliance this week. Follow us on Twitter and LinkedIn for more insights!
1) Ireland restructures regulatory landscape
The Central Bank of Ireland Commission (CBI) has approved the restructuring of the bank’s financial-regulation structures to match the twin peaks regulatory model of the UK.
Announced on Tuesday, regulatory functions are to be split under the two headings of prudential regulation and financial conduct, to ensure the CBI is ‘suitably equipped’ to meet its expanding regulatory mandate.
Mirroring the move the Bank of England made in April 2013 to move to a ‘twin peaks’ model of regulation, the prudential regulation pillar will look after credit institutions, insurance and asset-management supervision, while the financial-conduct pillar will regulate consumer protection, securities and markets supervision, and enforcement.
This will also lead to a change in structure to the bank’s senior management team, with prudential regulation being led by a Deputy Governor and the Financial Conduct pillar being led by a newly-created role of Director General, who will also be responsible for the Bank’s representation at European Securities and Markets Authority (ESMA). Both role holders will report to the Governor and will be members of the Central Bank’s most senior management committee, with competition for these roles set to open next week.
Stricter regulation in the wake of the financial crisis, together with the growth of new types of financial business in Ireland, have led to sharp increases in the CBI’s regulation activity in recent years.
In April it told all banks operating in the country to review their reporting standards after an investigation found many breaches of rules. Earlier this month the central bank called for greater scrutiny of the exchange traded fund industry. Ireland is the largest European domicile for ETFs.
This, combined with a higher level of engagement with the European Central Bank through the SSM, and potential influx of new businesses interested in relocating from the UK after Brexit, has piled further pressure on the Central Bank.
This comes amid legitimate concerns that regulatory standards will drop as member states vie to win new business from the UK, with ESMA publishing guidance on Wednesday to prevent entities from setting up ‘letterbox entities’ in an EU country that in reality outsource or delegate significant business to London.
According to Bloomberg, Bank of America Corp., Standard Chartered Plc and Barclays Plc are amongst the biggest banks considering Dublin for their EU base to retain access to the single market.
2) IPO Watch 2017: Which firms come out on top?
Following the announcement this week that Linklaters, Allen & Overy and Herbert Smith Freehills will be advising on the upcoming Allied Irish Bank IPO, we’ve taken a look back to see which firms have gained the most from 2017’s UK initial public offerings (IPOs).
Globally, $34.6bn has been raised in IPOs so far this year, compared to $13.8bn over the same period last year. Q1 2017 in London however has been fairly stagnant, with the volume of listings increasing by only 6 per cent from this time last year. Although London has only seen a small share of the global total listing on its exchange (6.4%), the region has regained its leading position as the most active European exchange, outnumbering the likes of Deutsche Börse and Spanish exchange Bolsa de Madrid.
Here is a list of this year’s main market floats on the LSE as well as the law firms that acted on the deal:
|Date||Company||Law firm advisers||Amount raised|
|April 2017||Ten Entertainment Group||§ Bircham Dyson Bell
§ Berwin Leighton Paisner
§ Charles Russell Speechlys
|April 2017||Alpha Financial Software||§ Freshfields Bruckhaus Deringer
§ White & Case
|March 2017||Dukemount Capital||§ Charles Russell Speechlys||£670,000|
|March 2017||BioPharma Credit||§ Norton Rose Fulbright
§ Herbert Smith Freehills
|March 2017||Medica Group||§ Eversheds Sutherland||£121m|
|March 2017||Impact Healthcare REIT||§ Travers Smith||£160m|
|March 2017||UP Global Sourcing Holdings||§ Osborne Clarke||£53m|
|February 2017||LXI REIT||§ Stephenson Harwood|
|February 2017||Arix Bioscience||§ Brown Rudnick||£100m|
|February 2017||Xafinity||§ Macfarlanes
§ Reed Smith
§ Travers Smith
|January 2017||Rainbow Rare Earths||§ Pinsent Masons||£15.2m|
|January 2017||TOC Property Backed Lending Trust||§ Gowling WLG
§ Charles Russell Speechlys
|January 2017||Stranger Holdings||§ Unknown||£110,000|
|January 2017||Simian Global||§ Unknown||£770,000|
It shows that deals are being won by a number of different firms, ranging from the UK’s top tier through to smaller UK outfits.
The largest IPO this year, Alpha Financial Software, was only one of two deals on which a US firm has been instructed. White & Case’s Jonathan Parry advised the financial software company whilst actuarial business Xafinity was advised by Reed Smith, led by corporate partner Philip Taylor in February this year.
Charles Russell Speechlys is one firm in particular to have taken advantage of market activity, securing instructions on three IPOs already this year. Having acted on the listing of property services company Dukemount Capital, the firm also advised the management teams instructed on the IPOs for Ten Entertainment Group and TOC Property Backed Lending Trust.
Although political uncertainty has yet again caused apprehension for new market entrants, and we aren’t experiencing the mass deluge of tech companies listing as they did last year, many have still indicated that there is a healthy pipeline of deals preparing to enter the UK IPO this summer. As companies such Uber, Airbnb and Lyft become the most anticipated IPOs of 2017, it is expected the IPO could pick up towards the latter part of this year.
3) Movers & Shakers
Herbert Smith Freehills strengthens corporate crime practice with boutique litigation hire
Corporate crime and investigations partner Brian Spiro makes the move from BCL Solicitors to HSF
Freshfields IP partner exits for WilmerHale
Freshfields Bruckhaus Deringer IP partner Justin Watts is set to leave the firm for WilmerHale, taking a senior associate along with him
Office Openings & Closings
Dentons takes seven-strong team to launch Myanmar office
Mergers & Alliances
Bond Dickinson combines with US alliance partner Womble Carlyle
Merger between HBJ Gately and Addleshaw Goddard goes live
Insurance giant AIG names UK panel with Clifford Chance and Macfarlanes among winners