Sullivan & Worcester Provides Legal Opinion for ITFA and BAFT
Industry standard legal opinion for banks to use in satisfying new regulatory requirements in the European Union
London, UK - May 6, 2015 - Sullivan & Worcester, on behalf of the International Trade and Forfaiting Association (ITFA) and BAFT, an international financial services association, has drafted a joint industry standard legal opinion, published yesterday, for banks to use in satisfying new regulatory requirements in the European Union.
ITFA and BAFT jointly produced this legal opinion as a benefit for their member institutions. The opinion aims to reduce the cost and complexity for banks that are subject to EU rules and to help increase the ease of doing business under the English law version of the BAFT Master Participation Agreement (MPA).
Geoffrey Wynne, head of the Trade & Export Finance Group and Sullivan & Worcester’s London office, who signed the legal opinion commented: "We were delighted to have been asked to prepare the opinion and we hope the market will find it useful. It demonstrates the strength of our practice in the area of trade finance and in considering and handling important issues such as the transfer of risk between banks."
For further details please see ITFA’s press release below.
About Sullivan & Worcester
Sullivan & Worcester is a leading corporate law firm advising clients ranging from Fortune 500 companies to emerging businesses. With 175 lawyers in Boston, London, New York and Washington, D.C., the firm offers services in a wide range of areas, including corporate finance, banking, trade finance, securities and mutual funds, litigation, mergers and acquisitions, tax, real estate and REITs, private equity and venture capital, bankruptcy, environment and natural resources, climate change, renewable energy and water resources, regulatory law, and employment and benefits.
Sullivan & Worcester’s London office is located at Tower 42 in the heart of the City of London. Details are as follows: 25 Old Broad Street, London EC2N 1HQ, Tel: +44 (0)20 7448 1000.
+44 (0)1263 576 564
The International Trade and Forfaiting Association (ITFA) and BAFT, an international financial services association, announced today a joint industry standard legal opinion for banks to use in satisfying new regulatory requirements in the European Union.
ITFA and BAFT, working through the law firm Sullivan & Worcester, jointly produced this legal opinion as a benefit for their member institutions to reduce the cost and complexity for banks subject to the EU rules and to increase the ease of doing business under the English law version of the BAFT Master participation Agreement (MPA). Input to the opinion came from working groups of both associations.
Under these new European regulatory requirements, credit risk mitigants, like the BAFT MPA, will need a legal opinion on whether their credit protection arrangements are legally effective and enforceable in all relevant jurisdictions. The legal opinion, issued by Sullivan & Worcester, is designed to facilitate this process for members of ITFA and BAFT.
"Our members make wide use of the BAFT Master Participation Agreement as one of their tools for distributing trade risk in the broadly-based modern forfaiting industry," said Paolo Provera, chairman of ITFA. "Reducing the expense of regulatory compliance is one of the tasks ITFA has set itself. This opinion reduces, at a stroke, the need to carry out much of the expensive and onerous groundwork in ensuring the agreement meets capital rules requirements."
"The BAFT Master Participation Agreement facilitates distribution of trade risk using a common framework, thus enabling more liquidity to meet financing needs," said Tod Burwell, BAFT president and CEO. "For both BAFT and ITFA, this legal opinion is critical to ensuring regulatory compliance while continuing to meet the needs of trade finance clients around the world."
The BAFT MPA is an industry standard for the transfer of trade finance related risk. Its English and New York law forms have been vital tools for the international banking industry for nearly 10 years.
The Legal Opinion and an accompanying Guidance Note are available to ITFA members. Please click here, Member Area, to review both documents. Kindly note that login details are necessary to access this restricted area on the ITFA website.