Global Financial Markets

The UK National Security and Investment Act 2021 (the "Act") entered into force on January 4, 2022 and enables the UK government to screen, block and unwind certain transactions on national security grounds. A new body, the Investment Security Unit ("ISU"), is responsible for the operation of the new regime. The Act provides for mandatory prior notification and approval of certain transactions in 17 sensitive sectors, and for the retrospective "call-in" of other transactions. The new regime does not only apply to M&A. The new powers could also potentially apply to lending (especially secured financings) and restructuring and, until the ambit of the legislation becomes clearer, a cautious approach is advised.

Lenders are well advised to consider whether the Act would apply to their lending and restructuring transactions, and the implications for the deal timetable and execution risk. Mayer Brown partners David Harrison and Trevor Borthwick give an overview of the new powers and discuss the key factors to consider at each stage of a lending transaction: signing/closing, trigger events during the tenor of the facility and enforcement/restructuring.

Since January 2021, the Biden administration has signaled that it intends to ramp up anti-money laundering (AML) regulation and enforcement. That was reinforced late last year when the administration issued its comprehensive Strategy on Anti-Corruption, which declared that combating illicit finance is one of its principal goals. The strategy highlights how regulators and law enforcement officials will leverage recent AML legislation and enhanced regulations that encourage transparency, increase obligations for gatekeepers and foster global cooperation to ratchet up AML enforcement actions, all of which creates greater compliance challenges and risk for financial institutions. Mayer Brown partners Glen Kopp, Gina Parlovecchio and Brad Resnikoff discuss how to better understand the strategy and the related developments in AML regulation and enforcement.

In response to the recent devastating events in Ukraine, many jurisdictions have imposed a broad range of new sanctions and export controls focused on the Russian state and certain Russian businesses and individuals. The new sanctions and export control regimes of the EU, the UK and the US have been evolving in real time over the past couple of weeks, and there are important but subtle differences between those regimes. However, the consequences of non-compliance can be severe, so it is important for everyone to have a broad understanding of the rules, especially as they can impact transactions that are not obviously related to Russia or Ukraine. Please join Mayer Brown partners Jason Hungerford, Ash McDermott and David Duffee for an overview of the rules and how they impact the syndicated loans market in expected and unexpected ways.

Rohit Chopra took over the helm of the CFPB last fall and has already started to make his mark on the agency, bringing a decidedly antitrust focus to his new role. Mayer Brown partners Ori Lev and Stephanie Robinson for a discussion of Chopra's first six months, including the CFPB's use of its Section 1022 authority, notable enforcement actions and other policy developments.

After two years of responding to the pandemic, US banking regulators likely will refocus this year on forward-looking issues. In particular, the following issues are expected to occupy a significant portion of the regulators' time in 2022:

• Regulatory Capital Rule Revisions
• Climate-Related Risk Management Expectations
• Digital Asset Activities
• Fintech Bank Charters
• Third-Party Vendor Risk Management
• Investment Fund Relationships
• Community Reinvestment Act

Mayer Brown partners Jeffrey Taft and Matthew Bisanz discuss these anticipated hot issues.

Late last year, a federal district court ruled that securitization trusts holding student loans might be liable for the alleged unfair and deceptive collection practices of the trusts' servicers. This is the first time that the US Consumer Financial Protection Bureau (CFPB) has sought to hold a securitization trust liable for acts of its servicers and the first judicial decision addressing the CFPB's argument that such trusts are covered persons subject to the CFPB's UDAAP authority. The decision could have broad-ranging implications not just for this asset class but for the securitization of consumer loans generally. Mayer Brown partners Barbara Goodstein, Ori Lev and Steve Kaplan discuss the background of the case, the court's recent ruling and the potential implications for both primary and secondary market participants in consumer loan securitizations.

Mayer Brown partners James Antonopoulos, Amanda Baker, Steven Garden, Brian Kuhl, Eric Mitzenmacher, Ger O'Donnell and Jan Stewart discussed "What to Expect in 2022" in the structured finance markets. They examined some of the key opportunities and challenges this new year will bring to market participants and discuss trending topics and the current regulatory landscape. Topics included updates on ABS filings with the SEC, consumer regulations, fintechs, RMBS, LIBOR and tax.

Last month, the US Office of the Comptroller of the Currency (OCC) issued the second part of its initiative to address the effects of climate change—draft principles for managing exposure to climate-related financial risks. Those principles and the OCC's earlier call to action to bank boards portend that the rapid implementation of climate risk management practices could occupy a significant amount of management and board time this year. And while targeted at OCC-regulated banks with over $100 billion in total assets, the draft principles may be of interest to banking organizations of all sizes and charters. Mayer Brown partners Paul Forrester and Matthew Bisanz and associate Kerri Webb discuss how to understand these new OCC principles.

Phase 6 of the Global Margin Rules applies from September 1, 2022, and may affect pension funds and other counterparties. September 2022 seems a long way off, but market deadlines are looming as early as January 2022. Join Margin Reform CEO Shaun Murray and Mayer Brown partners Edmund Parker and Edward Jewitt as they discuss this expansion, which captures pension funds with over £/€8bn of uncleared derivatives and imposes documentation and logistical challenges far more complicated than the 2016 variation margin round.

Last month, the US Office of the Comptroller of the Currency (OCC) issued a call to action on climate change to the boards of directors of large OCC-regulated banks. Based on that call to action, all bank boards should consider asking their institutions about enhancing climate change-related risk management practices. While this will be a long-term effort that will include further guidance from the agency, it is clear that the OCC expects banks to begin work now and refine their practices over the next year. Please join Mayer Brown partner Paul Forrester and senior associate Matt Bisanz to better understand the OCC's new expectations for larger banks and how they may be relevant to all US banks.