Centre for Banking & Finance Law


Secured Transactions Law in Asia

Associate Professor Dora Neo and Professor Louise Gullifer, QC (University of Oxford)

The Centre for Banking & Finance Law (CBFL) and the EW Barker Centre for Law & Business (EWBCLB) of the National University of Singapore (NUS) co-hosted a symposium with the Commercial Law Centre (CLC), Harris Manchester College, University of Oxford held at the Faculty of Law, National University of Singapore from 26 to 27 July 2018. This was convened by CBFL's Director, Associate Professor Dora Neo, and CLC's Director, Professor Louise Gullifer. The symposium examined secured transactions law reform in Asia with in-depth studies of selected Asian jurisdictions and discussed the broader context of law reform in other jurisdictions internationally. It also considered general issues such as the connection between secured transactions and insolvency.

Symposium participants were drawn from a variety of jurisdictions around the world, including Canada, China, India, Indonesia, Japan, Philippines, Singapore, South Korea, Spain, Taiwan, Thailand, United Kingdom, United States and Vietnam.

Symposium details here.

Trade Finance for the 21st Century

Associate Professor Dora Neo and Associate Professor Christopher Hare (University of Oxford)

A symposium was held at the Faculty of Law, National University of Singapore from 8 to 9 March 2018.

The volume of international trade continues on a rising trajectory with global economic development and new trading relationships. Established tools of trade financing such as the documentary letter of credit and its related instruments must be re-examined. Advancements in technology have led to fresh opportunities, including the use of blockchain and the switch to electronic forms of documentation. Banks have devised new methods of financing, for instance, the bank payment obligation. International legal experts were drawn from various countries to address these and other developments that are vital to trade finance for the 21st century, including Australia, China, Singapore, the United Kingdom and United States.

Symposium details here.

Banks, Financial Products & Mis-selling: Protecting the Retail Investor

Associate Professor Sandra BOOYSEN

A symposium was held at the Faculty of Law, National University of Singapore from 14 to 15 December 2017.

The mushrooming of claims against banks as financial advisers has been triggered by recent financial crises, including the Asian financial crisis and the global financial crisis (GFC). Since the GFC, there has been much focus on how to allocate risk for failed investments. The trend has been to boost regulatory duties and remedies, at least for retail clients, while sophisticated or wealthy investors tend to be confined to common law claims. The liability and responsibility of banks regarding investment products have featured prominently in the courts, parliamentary debates and the media in the last decade.

The symposium examined the prominent issue of bank liability for mis-selling investment products. In particular, it considered the different ways in which the law is setting the boundaries of liability for financial advising and the challenges inherent in doing so. There was a particular focus on the trend towards public law remedies in the form of regulation, and how this contrasts with the available private law remedies. Contributing scholars were drawn from a range of jurisdictions where financial advising is a prominent aspect of banking business, including Australia, Hong Kong, Singapore, the United Kingdom and United States.

Comparative Takeover Regulation

Associate Professor Umakanth VAROTTIL and Associate Professor WAN Wai Yee (Singapore Management University)

A conference was held at the Faculty of Law, National University of Singapore and School of Law, Singapore Management University on 23 and 24 July 2015.

The primary objective of the project was to undertake a study of takeover regulation in various jurisdictions, with a greater emphasis on Asia. There were two related parts. First, it consisted of a theoretical and empirical understanding of takeover regulation. Second, it consisted of a comparative cross-disciplinary jurisdictional study of takeover regulation in eight Asian economies. The project investigators were particularly interested in exploring the nature of takeover regulation that might require a different approach in the context of Asian economies where concentrated shareholding is the norm for listed companies, as compared to the generally diffused shareholdings in the United States and the United Kingdom.

Banking Secrecy

Associate Professor Sandra BOOYSEN and Associate Professor Dora NEO

A symposium was held at the Faculty of Law, National University of Singapore from 4 to 5 December 2014

Many jurisdictions recognise that customer information held by banks should be protected from disclosure to some extent. It is also accepted that the right to confidentiality of customer information cannot be absolute. The challenge to every legal system is therefore to find where the balance should lie. Recent events and developments have put this question under the spotlight. This project examined:
- the rationale of bank secrecy and the appropriate level of protection accorded to it;
- the growing tension between bank secrecy and the pressures on countries to combat international terrorism, money laundering and tax evasion; and
- how bank secrecy is being impacted by advances in technology and the growth in data protection laws around the world.

Symposium participants were drawn from a variety of jurisdictions around the world, including China, Singapore, Switzerland, the UK and the US.

Reforming the financial sector in Europe

Assistant Professor Christian HOFMANN

The European Union, the Euro area and the European countries have started to reform the financial sector in multiple and radical ways. The reforms respond to the increased awareness of the systemic significance of large banks for the financial sector and the close and potentially perilous relationship between sovereigns and their SIFIs.

Of particular significance to this study were :
(i) the new centralized banking supervisory regime for SIFIs (the “Single Supervisory Mechanism“);
(ii) the restructuring and resolution regime for banks (the new “insolvency law“ for banks) and
(iii) a significantly stronger focus on macroprudential regulation.

The project examined the importance of these reforms and analyze their consequences for European banks and their creditors. It attempted to raise and answer the questions as to whether these reforms promise to create more stability in Europe and if any weaknesses remain. It included the perspective of European central banks (ECB and national central banks) that are given increasingly important roles in establishing and maintaining financial stability in Europe.

Banking Terminology: Law & Practice

Emeritus Professor Peter ELLINGER

Banking lawyers and bankers have developed separate terminologies. Frequently a term may have one meaning at law and a different one in every day banking language. For instance, at law a “charge” is a security over assets specified in the documentation. Bankers tend to use “charge” mainly in the context of a security given over assets held by the bank for the account of the customer or of a person who acts as surety. “Lien”, “pledge” “receivables” and “overdrafts” are other cases in point.

Further, many terms readily understood by bankers – such as “put and call options”, “bank products”, “leveraging” and “margin trading” are not used in most works on banking law and need to be explained to a lawyer before he can express an opinion of issues arising in respect of them.

The object of this project was to highlight the nature and the origin of the terminological differences involved and to seek means for ensuring better mutual understanding.

Call for Consumer Reform of Insurance Law in Singapore

Associate Professor YEO Hwee Ying

The technical doctrine of good faith (uberrima fides) relating to pre-contractual disclosure and representation in insurance law has for a long while been operating in a notoriously unfair manner both in England and Singapore. Recently in England, the Consumer Insurance (Disclosure and Representations) Act 2012 has abolished in one legislative stroke the duty of disclosure for the consumer insured who now only has a duty to take reasonable care not to misrepresent facts. Singapore cannot remain insulated and should consider reforms in response to these new legislative developments.

Anti-deprivation rule in Belmont Park Investments Pty Ltd v. BNP Corporate Trustee Services

Adjunct Researcher Jeffrey SETIAWAN

The anti-deprivation rule ("ADR") of corporate insolvency is of immense interest in banking and finance because it limits the effectiveness of contractual clauses found in the documentation of finance products. The effectiveness and validity of various clauses like the flip clause which switches the priority between secured parties in a synthetic securitisation all depend on whether the clauses infringe upon the ADR.

While laying down some guidelines for the ascertaining compliance with the ADR, the UK Supreme Court in Belmont Park Investments Pty Ltd v. BNP Corporate Trustee Services [2011] UKSC 38 ("Belmont Park") did not sufficiently clarify the principles behind the ADR. Using Belmont Park as the platform, the proposed paper explores the policies and the structure of English corporate insolvency law, with a view to identifying the theoretical underpinnings of ADR and the basis of interfering parties’ freedom of contract. As a common law rule, the paper will inform the resolution of similar issues which may arise in other common law jurisdictions like Singapore, Malaysia and Hong Kong.

A Bit of a Coin – Crypto-currency and its Regulatory Implications

Adjunct Researcher Jonathan LIM Wei Zhong

Crypto-currencies such as Bitcoin have received much coverage of late, with recent high-profile incidents such as Mt. Gox surfacing difficult questions about regulation. This project explored how we should think about regulating privately-ordered money and exchange systems, particularly in the context of the modern pluralistic legal order and the transnational reach of the internet. As a first step, the researcher prepared a response paper on recent MAS proposals on “virtual currencies”, and evaluated if they were adequate to address traditional regulatory interests such as financial stability and consumer protection. The paper also drew upon the “regulatory competition” literature and situate MAS’ efforts within the context of other efforts in other prominent jurisdictions.

Moneylending and Consumer Credit in Singapore

Researcher Jodi GARDNER

The project analysed the current regulatory framework for small loan lending and consumer credit in Singapore, and the impact this has on the financial exclusion of low-income borrowers. This information was complemented with detailed empirical research identifying the motivations and circumstances of borrowers under the Moneylenders Act 2008 which will create a ‘debtor’ profile for Singapore. The final report analysed this information and suggested potential approaches for providing affordable credit options to vulnerable consumers in Singapore, ensuring that reform suggestions are tailored specifically to the people who need them the most.

China & the Convergence of Securities Regulation

Adjunct Researcher PEH Zu Hao

While an international regime of securities regulation seems to make perfect sense, there is a lack of understanding as to what such a regime would entail. In answering this question, this researcher will engage firstly in a discussion of the possible approaches to converge securities regulation, before arriving at his prediction of how this international securities regulation will look like. A related question that the author wishes to explore from this first query is how far China will go in supporting the convergence project. Given the sphere of China's influence over the global economy, its endorsement of such a convergence project would be critical in providing the project legitimacy in an international context.

Dealing with Perception – A Look at Overseas-Listed Chinese Firms in Singapore

Adjunct Researcher PEH Zu Hao

Throughout the world today, overseas-listed Chinese firms ("OLCFs") have received much flak from media, securities regulators and investors alike. Despite their initial popularity, the performances of OLCFs have been dismal across the board. All in all, the prevailing rhetoric seems to suggest that OLCFs as a whole are not only poorly governed, but are also predisposed to be so. The researcher attempted to answer two questions in this paper. In the first part of the paper, the author sought to explore whether perceptions about OLCFs are justified. In the second part of the paper, this author aimed to explore possible ways to correct the issues underlying such a perception. This author attempted to answer both questions in the context of Singapore's capital markets and their regulatory environment.

(Reverse Mortgage) Navigating the Minefield of Equity Release Products

Adjunct Researcher Nelson GOH Kian Thong

Equity release products have established themselves as suitable financial products for the elderly in other jurisdictions such as the United Kingdom and Australia, who are asset-rich cash-poor. These products allow elders to mortgage their homes in exchange for regular income or an annuity. According to Government reports, this is no different in Singapore. Indeed, by 2030, about 30% of Singapore’s population would be above 60 years old. The twin effect of Singapore’s CPF scheme and pro-home ownership policies is that many elders are asset-rich cash-poor, with their wealth locked up in the form of real estate. The recent Housing and Development Board’s Lease and Buy-back scheme for public housing heralds the likely influx of equity release products such as the reverse mortgage. This paper discussd the legal implications of the introduction of such products, and taking guidance from the UK and Australia, discussed the possible means by which Singapore can regulate such products.

Non-Reliance Clauses and the Vulnerable

Adjunct Researcher Nelson GOH Kian Thong

Banks are well known to protect themselves with an impregnable wall of protective clauses. However, the trend of late in the UK and Singapore, is for Courts to be reticent to give full weight to a bank’s defensive clauses if the counterparty to a transaction is vulnerable, such as elders, illiterate persons, etc. This is especially so in transactions involving financial products where the intricacies of the product are difficult for the consumer to comprehend. This paper sought to trace the history of bank’s defensive clauses and the gradual marked departure by the English and Singapore Courts from a rigid adherence to enforcing the parties’ bargain. It also sought to suggest the implications for banking practice in relation to financial products for retail consumers.