Brief Banking Bites – Spring 2023

Welcome to the first 2023 edition of Brief Banking Bites from Blake Morgan.

In this edition of BBB, we will look back on 2022 and celebrate our success both as individuals and a team, as well as discussing some things to look out for in 2023. This summary of topical updates will include brief pointers to items currently in the news, as well as overviews of potential topics of interest, fleshed out in more detail within Blake Morgan articles. At the risk of spoiling the surprise, some topics under study are The National Security and Investment Act, Environmental, Social and Governance (ESG) and Sole Directors and Model Articles.

We will finish off by highlighting team promotions and introducing you to a few new members of the team.

A snapshot of our work in 2022

News

Financial Services and Markets Bill 2022-23

In short, the ‘FSM Bill’ will make extensive reforms to the UK’s post-Brexit regulatory framework. The Bill aims to amend the current framework to, amongst other things: reform governing capital markets, reform financial promotion, protect of easy access to cash and revoke financial services retained EU law. The government currently indicates that the Bill will be finalised by Easter of this year.

For more information, please see the Financial Services and Markets Bill here.

Business Banking Resolution scheme – a failure?

The Business Banking Resolution was intended as a new way to resolve disputes between lenders and businesses after a spate of banking scandals; it was anticipated that around 60,000 companies would be “in scope”. The service, which costed tens of millions of pounds, has been criticised by campaigners, who say its narrow eligibility criteria has contribute to the shortage of adjudications. At the end of last year, the scheme had a total of just 905 registered cases.

For more information, please see The Times article here.

The UK’s approach to artificial intelligence (AI) and machine learning in financial services

The Association for Financial Markets in Europe recently responded to a consultation by the Prudential Regulation Authority, the Financial Conduct Authority and the Bank of England. Their points include:

• 1) maintaining the current outcomes-focused, technology-neutral approach to regulation would be preferable to emphasising a specific focus on regulating AI;
• 2) a sectoral definition of AI is not required;
• 3) any supervisory focus on the use of AI within financial services should be principles-based and linked to the level of risk posed by an individual AI application and the extent to which this is being addressed by the user, rather than a regulation being developed to apply to all uses of AI;
• 4) there are areas where the industry would welcome more dialogue and guidance on supervisory expectations, for example the use of AI in anti-financial crime and anti-fraud; and
• 5) certain aspects of data regulation raise concerns for the development of AI, for example the trend towards data localisation requirements.

For more information, please the Association for Financial Markets in Europe document here.

How can the financial sector enable an economy transition to net zero?

An FCA consultation published earlier this month seeks views on sustainability-related governance, incentives and competence in regulated firms. The body want to help narrow this field and highlight good, evolving practices while considering whether there is a case for further regulatory measures in this area.

For more information please see the FCA website here and here.

Analysis

National Security and Investment Act

Since 4 January 2022, under the new National Security and Investment Act 2021 (NSIA), a new, hybrid scheme has been introduced which allows the Government to scrutinise, and intervene in, acquisitions and investments where it is deemed necessary in order to protect national security in the UK.

Read our article here.

ESG – what’s it all about?

“ESG”, or Environment, Social and Governance is the latest acronym that all businesses now have to deal with. The decoding of the letters is the easy part, but what does this actually mean for businesses, their staff, customers and supply chains? Beyond the regulatory commitments, which often have little risk of enforcement, ESG has become increasingly important for businesses as customer and stakeholder pressure to show change continues to grow.

Read our article here.

Sole directors and Model Articles

Can a company which has Model Articles act by a sole director? The issue discussed in the below article is also pertinent when accepting instructions from a director of a Company that has more than one director. While it is clear that a director can bind a company as its agent, this relies on the concept of ostensible authority. If a solicitor knows or ought to know that the director does not have that authority (for example because of a dispute) then they should not proceed.

Read our article here.

Why do banks sometimes fail?

Three economists have shared the 2022 Nobel prize in economics for their ‘pivotal’ theory of how banks work and how they fail. The theorists highlight one key factor being external ‘liquidity shock’, a societal event that makes them want to withdraw their money. This, they argued, can lead to panic, and create a vicious circle in which ever more of them withdraw their funds in fear that the bank will run out. They point that this inherent instability that can lead to the collapse of banks, evident in the financial crashes of the 1930’s and 2000’s, although safeguards such as regulatory policies and deposit insurance have left the banking sector in better shape for future instability.

For more information, please see here.

Firm news

Blake Morgan is the only law firm to be named in the Inclusive Top 50 UK Employers list for 2022/23, featuring on the prestigious list for the sixth consecutive year, showing our continued push to ensuring diversity in the workplace.

Read our article here.

Kath Shimmin said: “It is an achievement to be on this list and I am thrilled to be part of a firm that really values equality, diversity and inclusion. It is so important to Blake Morgan and part of our core. EDI runs through everything we are trying to do, including policies, processes, management and day-to-day behaviour. To be included in the top 50 organisations in the country is a real statement that we are delivering on our aims and is a real tribute to the commitment of all our colleagues.”

At the risk of blowing our own trumpet, we are also pleased to share that the team has yet again been ranked Band 1 in both the Legal 500 Directory and the Chambers & Partners 2023 guide. The accolade is shared by Kath Shimmin and Guy Constant who achieved ‘Hall of Fame’ status and Paul Duggan who was described as ‘the consummate professional… we have not yet come across an issue where he cannot provide a sensible solution’.

We are thrilled that the team’s dedication is recognised and has led to a positive client experience – hard work does indeed pay off!

Our people

Promotions

We are pleased to announce Paul Duggan has taken up the reins as the Banking & Finance Team’s newest Partner. We are looking forward to seeing the Cardiff Team shoot for the moon under his direction.

Other promotions in the team include Katherine Tan to Legal Director, Richard Rogers to Senior Solicitor, Iona Easton to Associate and Jake Holmes to Senior Associate. We are thrilled to recognise the hard work of the team and to mark our growth as a team by giving individual promotions.

New joiners

This growth is also marked as we welcome to our Banking team new members:

Alex Hill – Following a successful Banking seat, Alex Hill re-joining the team in March 2023 as a newly qualified solicitor in the London office.

He commented: “Greetings – I’m excited to be returning the team that I did my first seat with here at Blake Morgan as a newly qualified Solicitor! I’ve been around the block in several teams, including Construction, Intellectual Property and Commercial Litigation, but it feels good to be coming back, where I can apply my knowledge and learning from day one. I enjoy going for walks in my spare time, as well as seeing performances and shows locally and in London. My aim for the new year is to get out the house more, so I’m trying to spend my lunch breaks in the fresh air away from any screens.”

Angela Ho – Angela joined the team at the start of January, having taken some time off after a successful career at Linklaters.

She said: “Hello everyone, I’ve recently joined the Banking team in Reading as an Associate. Prior to my career break, I worked in the Banking team in Linklaters London after completing my training contract in Hong Kong. In my spare time, I enjoy spending time with my family in the Oxfordshire countryside and I’m also actively involved with children’s work at my church and local Scout group.”

Lauren Green – We are thrilled that Lauren will be joining us for a second seat in the Southampton office.

She commented: “Hi everyone, I have been working with the team in my capacity as a Trainee Solicitor and have really enjoyed my time in “the seat”, so much so, that I have asked to do a second seat in the team! I have really enjoyed the technical elements of this non-contentious practice area and look forward to developing further and becoming more involved in the transactional work!”

Farewell

We would like to thank Sam Berry and Thomas Jenkins for their hard work as Trainees over the last six months. We wish them both the best in their next seats!

David Middleton left in December to try his hand at working as an in-house lawyer. Thank you to David for all of your hard work – don’t be a stranger!

Contact us

• Kath Shimmin – Southampton
• Meera Jansen – London
• Paul Duggan – Cardiff
• Rebecca McCabe-North – Reading

We are excited to see what the team can achieve in the new year. From all of us in the Banking & Finance team, we wish you a flourishing 2023.