The FMLC hosted the Quadrilateral conference in 2016 at the Bank of England. The conference is an annual meeting of the FMLC and its sister counterparts from the European Union, the United States and Japan. Held over three days (19-21 July), the Quadrilateral offered an opportunity for the FMLC to assess and discuss developments in financial markets law. On the agenda were topics as wide-ranging as the legal challenges presented by new virtual payment systems, the legal considerations of negative interest rates, a primer on clearing and margins, an in-depth look at the many legal measures related to ending “Too Big to Fail” and, of course, Brexit.
FMLC members and staff contributed to the conference through discussions and presentations on areas of expertise. While the conference was closed to the public, the FMLC is able to share presentations made by FMLC CEO Joanna Perkins.
Legal Aspects of Virtual Currencies
Dr Perkins addressed the question of how the existing legal system could accommodate virtual currencies. Should virtual currencies be classified as property or personal rights under common law? Would they be considered “negotiable chattels” like bank notes and coins? If virtual currencies qualify as money, does that mean they must be regulated as money, rather than commodities or securities?
MiFID II – Best Execution
MiFID II is due to become applicable on 3 January 2018. Dr Perkins provided an overview of the changes introduced by the Directive in relation to the scope of obligations, executions of behalf of clients, transaction reporting by brokers, and client order handling.
In her last presentation, Dr Perkins sought to shed light on the alphabet soup of bank resolution. She commented on varying standards on loss-absorbing capacity in different jurisdictions, including total loss-absorbing capacity (TLAC) as understood by the Financial Stability Board, the minimum requirement for own funds and eligible liabilities (MREL) according to the EU, and long-term debt requirements (LTD) recommended by the Federal Reserve.
Due to time limitations and other unforeseen circumstances, Dr Perkins was not able to cover all the information and may have deviated from the script.