Banking updates

Austria

Contributed by Graf & Pitkowitz Rechtsanwalte GmbH
Beneficiary's repayment obligation following bank guarantee by consumer securing third-party debt
  • Austria
  • 20 July 2018

The Supreme Court recently extended the scope of the sections of the Consumer Protection Act that protect consumers that accede to a third party's obligation without any economic interest of their own. Although the Supreme Court returned the case to the first-instance court, the guidelines drawn up in this decision will apply to any type of collateral provided in similar situations for the account of a consumer.

Subordination agreements, revisited
  • Austria
  • 11 May 2018

The Supreme Court recently confirmed the admissibility and validity of qualified subordination agreements included in general terms and conditions and with respect to consumer transactions. Further, the Supreme Court held that qualified subordination agreements – in particular, those relating to loan agreements – create a specific type of contract. This decision has a significant impact on standard bank loan transactions, especially in restructuring situations.

Demand guarantees versus sureties on first demand
  • Austria
  • 02 March 2018

The Supreme Court recently clarified its position on sureties payable on first demand and confirmed its view on the interpretation of contractual undertakings by which one party assumes a personal liability for a third-party debt. Considering the significant different legal consequences for a beneficiary's position following a qualification as either an abstract guarantee or an accessory surety, the guidelines provided by the court are of the utmost importance.

Limits set to client communication via e-banking
  • Austria
  • 15 December 2017

The Supreme Court recently rendered its first judgment on the admissibility of the use of electronic mailboxes, which are exclusively incorporated and only accessible via the e-banking system of a credit institution for serving client account notices and statements to consumers. This ruling will significantly affect Austrian banking practice.

Implementation of Fourth Anti-money Laundering Directive in Austria – what to expect
  • Austria
  • 27 October 2017

Following the Fourth Anti-money Laundering (AML) Directive coming into force, Austria transposed the directive into law through two major legislative acts. This update provides an overview of the effects and obligations arising from the implementation of the Fourth AML Directive – in particular, the due diligence that banks will have to undertake on prospective clients.


Bermuda

Digital Asset Business Act 2018
  • Bermuda
  • 12 October 2018

Since its election, the current government has enthusiastically embraced the fintech sector and the potential that it offers and has repeatedly expressed its intention for Bermuda to be a significant centre for this industry. In furtherance of this goal, a significant part of the government's legislative programme for 2018 has been, among other things, the implementation of a comprehensive regulatory regime. The central pillar of this regime is the Digital Asset Business Act, which came into force on 10 September 2018.


Brazil

Contributed by BMA Barbosa Mussnich Aragao
New rules for credit fintech companies
  • Brazil
  • 27 July 2018

The National Monetary Council recently issued Resolution 4,656, regulating credit fintech companies. The resolution will allow direct credit companies and interpersonal loan companies to conduct loan and financial operations through electronic platforms. Although it is still uncertain how the market will react to the new rules, the industry is optimistic, considering the significant developments in this area that have been observed in other markets.

CADE and Central Bank sign memorandum for further cooperation
  • Brazil
  • 13 April 2018

The Administrative Council for Economic Defence (CADE) and the Central Bank recently entered into a memorandum of understanding. This initiative strengthens the relationship between the two authorities and promotes greater cooperation among them for the analysis of merger cases and anti-competitive practices by financial institutions. It also represents an important step forward, signalling the end to the longstanding dispute between CADE and the Central Bank over jurisdictional conflicts.


British Virgin Islands

Launching an ICO in British Virgin Islands
  • British Virgin Islands
  • 15 December 2017

Interest in the setting up and distribution of initial coin offerings (ICOs) in the British Virgin Islands and other offshore locations has increased rapidly during 2017, and this is expected to continue. No ICO or blockchain-specific rules or guidelines have yet been issued by the government or regulator; however, there are several important issues for parties in the British Virgin Islands to consider, including the key laws and regulations surrounding the issue.


Canada

Does offshore banking confidentiality hold up in Canadian courts?
  • Canada
  • 02 June 2017

Some jurisdictions' laws make it a criminal offence for banks to disclose client information. If a bank becomes involved in Canadian proceedings, those foreign laws may conflict with the disclosure obligations imposed on litigants in Canada. This raises questions about when foreign law can provide a basis to excuse production or refuse the answering of a question in Canadian proceedings, and under what circumstances a Canadian court will compel disclosure despite potential foreign legal jeopardy.

FCAC reinforces express consent expectations
  • Canada
  • 26 May 2017

The Financial Consumer Agency of Canada (FCAC) has issued a statement and a new compliance bulletin in response to recent allegations that certain employees of banks were pressured to upsell to consumers. The bulletin states that its purpose is to reinforce FCAC expectations that federally regulated financial institutions obtain consumers' express consent for new products and services in accordance with regulatory requirements.

Budget 2017 – financial services highlights
  • Canada
  • 19 May 2017

The government recently tabled its 2017 Budget. The financial services proposals are aimed at facilitating a more resilient financial sector, a modernised deposit insurance framework that continues to protect the deposits of Canadians and promote financial stability and increased powers to combat money laundering and terrorist financing.