Insights

On 29 June 2023, the long-awaited Financial Services and Markets Act 2023 (the “Act”) received Royal Assent, clearing the Act’s final hurdle prior to its implementation. The Act is the framework for the UK’s post-Brexit financial legislative and regulatory landscape.  Focusing on the promotion of competition, innovation and investor protections, it hopes to ensure the UK’s continued leadership in the global economy by providing “a smarter financial services framework”. While the Act is 349 pages in length, we have set out some of the key themes and regulations currently making headlines.

In continuing with its efforts to promote greater liquidity and certainty in the U.S. secondary loan trading market, on July 21, 2023, The Loan Syndications and Trading Association, Inc. (the "LSTA") officially released a revised suite of secondary market loan trading forms, which revised forms are effective for LSTA trades entered into on or after such date. 

Participation agreements, in the form promulgated by The Loan Syndications and Trading Association, Inc. (LSTA), are widely regarded as dependable vehicles for conveying loan ownership interests from a lender to a participant as “true sales” in the United States.  But what if the underlying credit agreement describes the participation as a financing relationship between a lender, as debtor, and participant, as creditor?  The answer is unclear as a legal matter, and the existence of such language should give market participants pause if encountered in the loan origination or secondary trading contexts.