Walkers Launches Compliance Services Offering

Walkers Compliance complements Walkers' legal, corporate and fiduciary services to deliver a one-stop-shop for clients looking to use the Cayman Islands jurisdiction for their business needs.

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Walkers IDR Among Top Global Law Firms in GRR 30

Walkers' Global Insolvency & Dispute Resolution Group has been ranked as the 13th strongest global law firm for restructuring and insolvency by Global Restructuring Review

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Walkers Leads Landmark Defence of Mega-Litigation

Ahmad Hamad Algosaibi Brothers Company (AHAB) v. Saad Investments Company Limited (In Official Liquidation) (SICL) and Others, a case in which claims and counterclaims at their height amounted to over US$17 billion.

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Walkers Leads Offshore

This year Walkers received 10 Band 1 practice rankings in the Chambers and Partners Global Guide, more than any other offshore law firm.

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Walkers Acts on $1B Asia Deal

Walkers BVI and Cayman advised Didi Chuxing on its highly-publicised US$1 billion acquisition of 99 Taxis.

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Brexit

Following the result in the United Kingdom's EU referendum, Walkers has created a Brexit page dedicated to providing our clients relevant information about the jurisdictions in which we practise.

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Walkers is a leading international law firm. We advise on the laws of Bermuda*, the British Virgin Islands, the Cayman Islands, Guernsey, Ireland and Jersey.
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Powerwomen 200

Walkers in IFC Powerwomen Top 200

Six Walkers lawyers have been ranked in the 2017 edition of CityWealth's IFC Powerwomen Top 200.

 

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European Banking Authority Issues Opinion on Preparations for the Withdrawal of the UK from the EU

It has been clear for some time that financial institutions likely to be impacted by Brexit need to be prepared. The European Banking Authority’s (“EBA”) recent Opinion (available here), sets out its view that not enough has been done. Indeed, the EBA’s view is that firms must now consider the potential impact of a ‘hard’ Brexit on their business and take necessary steps to prepare for such an eventuality, rather than rely on political developments to solve the issue.

Since the Opinion was published the UK Government has issued its statement from Chequers on 6 July 2018 (available here). If anything, the uncertainty surrounding the UK position on services and the lack of a legally binding transition period only serve to emphasise the EBA’s warning that preparations for a hard Brexit should be pursued sooner rather than later.

A summary of the key points from the Opinion and our conclusions are set out below.

Executive summary
On 25 June 2018, the EBA published an Opinion on preparations for the withdrawal of the United Kingdom from the European Union.

The EBA is focused on the level of preparedness of financial institutions (see “Scope”, below) for Brexit, particularly with the possibility of no ratified withdrawal agreement being in place (and thus no transition period) by the 30 March 2019 deadline. The Opinion effectively presents a warning for firms to progress or, if they have not already done so, to commence Brexit planning for a worst case scenario and warns that financial institutions should not rely on public sector solutions, as they may not be proposed and/or agreed. The EBA finds that current preparations are “inadequate”.

The EBA states that mitigating actions should be pursued by financial institutions without delay. The Opinion also gives details of the risk assessments and preparedness competent authorities should require of financial institutions, as well as including an express requirement to notify competent authorities of assessments, plans and customer communications.

The EBA has also set out requirements to provide clear information to customers whose contracts or services may be affected, as soon as that information becomes available to them, and in any event no later than the end of 2018.

 

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CP86 - Central Bank of Ireland to Focus on Organisational Effectiveness

CP86 - Central Bank of Ireland to focus on organisational effectiveness with emphasis on firms’ resources and organisational structures

1 July 2018 marked the conclusion of all transitional arrangements available to firms for compliance with the Central Bank’s requirements for the organisation of Irish authorised fund management companies as set out in the Central Bank UCITS Regulations and the Central Bank’s AIF Rulebook.

The requirements include the Central Bank’s effective supervision requirement known as the location rule. This requirement stipulates the minimum number of directors of a management company which must be resident in Ireland and the EEA as well as the minimum number of managerial functions which must be performed in the EEA, depending on the Central Bank’s PRISM impact rating of the management company. With effect from 1 July, all existing Irish fund management companies are required to comply with the location rule and any new fund management companies will only be authorised if they are organised in line with the requirement.

The requirements are supported by regulatory guidance, the Central Bank’s Fund Management Companies – Guidance. This guidance was published by the Central Bank in December 2016 following completion of an extensive period of consultation (CP86) with industry between September 2014 and August 2016 and is applicable to Irish authorised UCITS management companies, AIFMs and self-managed UCITS and AIFs. The fulsome guidance is comprised of six parts and details the Central Bank’s expectations in relation to the governance of Irish management companies, how they should comply with their regulatory obligations and its ability to supervise management companies without undue constraint and in times of crisis.

The Central Bank announced on 5 July 2018 its intention to begin assessing how management companies “have implemented and embedded the new requirements and related guidance in their organisations”. The Central Bank noted that it intends to place “specific emphasis” on “assessing the appropriateness of the Fund Management Company’s resources and organisational structure.” The Central Bank’s focus will be “on the assessment work performed by the Organisational Effectiveness role holder and, in particular, how the board of the Fund Management Company have implemented any proposals to improve organisational effectiveness.” In line with its supervisory model for funds and management companies, this assessment is likely to take the form of a themed inspection of firms’ compliance with the organisational effectiveness requirements and the work performed by the Organisational Effectiveness role holder.

 

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Bermuda ‘Light-touch’ Provisional Liquidator Restructuring

A bold judicial reimagining of the Court’s existing power to appoint a provisional liquidator for asset preservation purposes, Bermuda’s ‘light-touch’ provisional liquidation regime empowers embattled boards to pursue company-driven restructuring with the protection of an interim moratorium on proceedings.

’Light-touch’ Provisional Liquidation for Restructuring Purposes

Bermuda has no direct equivalent to the statutory moratorium against creditor action that applies to an insolvent English company in administration pursuant to Schedule B1 to the Insolvency Act 1986, or to an American corporate reorganisation pursuant to Chapter 11 of the United States Bankruptcy Code. This legislative gap has been enthusiastically filled by the Bermuda Supreme Court’s interpretation of the power to appoint liquidators under section 170 of the Companies Act 1981 (the “Act”) to include the power to appoint provisional liquidators for restructuring purposes. For almost twenty years now, de facto debtor-in-possession, management-led restructuring has been facilitated in Bermuda by reference to this bespoke restructuring regime.

The distinguishing feature of a Bermuda light-touch provisional liquidation is that provisional liquidators are appointed - oftentimes on the company’s own petition - to independently oversee a restructuring process, with a focus on protecting creditor interests. The ultimate restructuring can manifest itself in various ways, although typically we see either an equity injection by a “white knight” investor, a purchase of distressed debt by a third party or a scheme of arrangement whereby the company makes a compromise or arrangement with its members and/or creditors pursuant to section 99 of the Act. Regardless of what form the restructuring ultimately takes, the company has the benefit of a moratorium, or stay, on proceedings being brought against the company during the period in which the provisional liquidators remain in office. This is a particularly valuable protection for imperilled boards of companies in the zone of insolvency, where creditor threats to commence winding up proceedings can distract from the primary task of implementing a financial or operational restructuring to ensure that the company may continue as a going concern.

It is not the role of the light-touch provisional liquidators to determine whether or not a certain restructuring proposal should be pursued. That is of course a question for the creditors and members of the company.

Typically, evidence must be shown to the Court at the appointment stage that demonstrates that certain creditors of certain value are either supportive of the proposal or have indicated that they are willing to wait and see what the company will propose and accordingly do not wish for a winding up order to be made immediately. Subsequent to the appointment of the provisional liquidators, if the necessary creditor support cannot be obtained and a satisfactory restructuring proposal cannot be agreed upon, the provisional liquidators would report this to the Court and, in most cases, a winding up of the company would ensue.

 

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Bermuda ICO Legislation Comes Into Force

The Companies and Limited Liability Company (Initial Coin Offering) Amendment Act 2018 (the “ICO Act”) became operative with effect from 9 July 2018. The ICO Act amends the Bermuda companies and limited liability companies (“LLC”) legislation, and creates a statutory framework for the regulation of initial coin offerings in Bermuda. The Minister also published the Companies (Initial Coin Offering) Regulations 2018 and the Limited Liability Company (Initial Coin Offering) Regulations 2018 (together the “ICO Regulations”) expanding on certain requirements under the ICO Act.

 

This advisory provides guidance as to some of the key requirements under the ICO Act and the process for making an application for consent to conduct an offer to the public for the purchase or acquisition of digital assets under Bermuda law (“ICO”). It is not exhaustive and anyone seeking further information is invited to contact a member of our team.

 

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Bermuda Enhances its Beneficial Ownership Regime

Bermuda has extended the scope of its existing legal requirements relating to disclosure of beneficial owners of corporate and legal entities in order to meet international transparency standards as recommended by the Financial Action Task Force and the Organisation for Economic Co-Operation and Development.

The intent of the amendments is to ensure that adequate and accurate information concerning beneficial owners of Bermuda companies, limited liability companies and partnerships is accessible to the regulator and law enforcement agencies and is updated on a timely basis. This has led to requirement for companies and partnerships to establish and maintain a beneficial ownership register at their registered office. Although similar requirements were introduced in respect of Bermuda limited liability companies and partnerships, this guide deals with the requirements in respect of Bermuda companies as a result of amendments made to the Bermuda Companies Act, 1981.

 

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