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Financial services legislation in the EU is shaped by initiatives that were created in response to the 2008 global financial crisis. The main initiatives include: the Markets in Financial Instruments Directive II, the Bank Recovery and Resolution Directive (“BRRD”), Capital Requirements Directive IV (“CRD IV”), the Capital Requirements Regulation (“CRR”) and the Mortgage Credit Directive. 

The examples below highlight the key EU regulatory developments currently affecting EU banks, financial services providers and consumers,. Further, an attempt at covering possible developments in 2017 is made.

Markets in Financial Instruments Directive II

In 2010, the European Commission (the “Commission”) announced a review of MiFID which subsequently led to the publication of a package proposal: MiFID II and a new regulation (the Markets in Financial Instruments Regulation (“MiFIR”)). It took the EU institutions time to agree the texts of both measures which were eventually finalised and published in the Official Journal of the EU on 12 June 2014. 

The reason why agreement on MiFID II and MiFIR took so long was that they take MiFID into new areas: non-equity market transparency; regulatory product intervention powers; third country provisions; and high frequency trading controls being some of the more important.

MiFID II and MiFIR were to enter into force in all Member States on 3 January 2017.  However, given the technical challenges concerning implementation in February 2016 the Commission issued legislative proposals delaying MiFID II and MiFIR by a year.  The regime is to transpose into national law by 3 July 2017 and apply from 3 January 2018. This is largely welcomed by banks in Bulgaria, as preparation time is extended.

Firms and banks are to be ready and prepared by the end of 2017. Draft implementation legislations are being prepared currently in Bulgaria, however no significant news has been disclosed by the national competent authority on terms and discretions.

Some key points of MiFID II and MiFIR include:

  • the provision for new market infrastructures, such as organised trading facilities;
  • the introduction of new consumer protection rules;
  • amendments in the regulated products and regulators’ product supervision;
  • new conduct of business requirements on how firms are set up, structured and governed, for example by introducing board diversity measures; and
  • access of non-EU firms to EU markets. Harmonised requirements regarding the ability of non-EU firms to access EU markets.

MiFID II and MiFIR empower the European Securities and Markets Authority (“ESMA”) to develop numerous draft regulatory technical standards (“RTS”) and draft implementing technical standards (“ITS”). These add the necessary detail to the rules as they are directly binding on member states (due to the regulation status).  No further transposition on those is expected in member states, however it is possible some regulatory ordinance be created.  During the course of 2015, ESMA delivered drafts of the RTS and ITS to the Commission and at the time of writing their adoption is awaited.  In addition, ESMA has provided technical advice to the Commission on the possible content of the delegated acts required by several provisions of MiFID II and MiFIR. All of these would be applicable from 3 January 2018 (as extended from the 3 January 2017).

Bank Recovery and Resolution Directive (“BBRD”)

At an EU level, a major focus of the regulatory response to the financial crisis of 2008 was the design and implementation of tools to prevent EU banks from failing and using public funds for their bail out.  Key amongst these was the BRRD.  Member States were required to implement the BRRD by 1 January 2015. 

During 2016, a number of delegated regulations relating to key issues in the BRRD that enhance supervisory convergence were adopted by the Commission.  Such delegated regulations included those that specify the content of bank recovery plans, resolution plans and group resolution plans.

Each institution (at entity and group level) had to prepare a full recovery plan that sets out the measures it will take in different scenarios where it is at risk.

The resolution authority (the central bank in many cases) then had to prepare a resolution plan for an institution (at an entity and group level) setting out options for resolving every bank in different scenarios. The resolution includes details of how to apply the resolution tools and how to make sure the institution continues to provide critical functions. If the resolution authorities identify a significant impediment to a resolution, they have the power to request the institution to address or remove this impediment.

One aspect of the BRRD which has been a hot topic in 2016, and will be in 2017, concerns the “bail-in” tool.  A key part of the BRRD is that it sets out various measures that are aimed at providing EU resolution authorities with a minimum toolkit for resolving a failed bank.  Amongst the new tools is the “bail-in” tool which provides that an EU resolution authority may exercise powers to rescue a troubled bank by writing down debt or converting debt into equity. 

Article 55 of the BRRD provides that EEA banks must include contractual terms in any agreements governed by the laws of non-EEA Member States, which create certain payment and other liabilities specifying that they may be subject to bail-in by resolution authorities under the BRRD.  Obviously this applies to a very broad spectrum of payment and potentially other contractual and non-contractual liabilities and bail-in recognition provisions have had to be included in various loan agreements and financial documentation, guarantees, letters of credit, bonds documentation (prospectuses), etc.

EU banking union

The EU banking union has three pillars, being: the single supervisory mechanism (“SSM”); the single resolution mechanism (“SRM”); and the European deposit insurance scheme (“EDIS”).  The SSM empowers the European Central Bank to carry out key supervisory tasks for banks in those Member States that are participating in the EU banking union.  The SRM is a single resolution process that applies to all banks established in those Member States participating in the SSM.  The SRM is co-ordinated by the Single Resolution Board. 

A resent asset quality review (“AQR”) and stress test exercise, based on the ECB AQR exercises that have been conducted in the EU 2014 – 2015 has opened talks of the possibility of the ECB to take on supervisory powers as part of the SSM in at least some of the bigger banks in Bulgaria. Any serious steps in that direction are expected to be seen in resent years (maybe in the 2020 timeframe). It is expected a ECB supervisory AQR to take place for the country’s banking system before any steps towards the SSM are taken. Such steps should be part of a Euro currency acceptance as well, which is another matter as a whole.   

Capital Markets Union

Capital Markets Union (“CMU”) is the current flagship initiative of the Commission and has three objectives, which are to:

  • broaden the sources of financing in Europe towards non-bank financing by giving a stronger role to capital markets;
  • deepen the single market for financial services; and
  • promote growth and financial stability.

The Action Plan on Building a Capital Markets Union sets out a programme of actions and related measures, which aim to establish the building blocks of an integrated capital market in the European Union by 2019.

Bank structural reform legislation

In January 2014, the Commission published a draft regulation on structural measures improving the resilience of EU banks.  The legislative proposal followed a report on structural bank a reform that was put together by an expert group led by Erkki Liikanen, the Governor of the Bank of Finland.  The draft regulation as originally proposed prohibits EU banks within scope to conduct proprietary trading.  It also permits EU banks within scope to engage in trading and investment banking activities, other than proprietary trading, at the discretion of their national authority. 

CRD V reform

A reform package for the existing banking regulations is on its way. The reform includes Regulation (EU) No 575/2013 (the Capital Requirements Regulation or CRR) and Directive 2013/36/EU (the Capital Requirements Directive or CRD), on prudential requirements for and supervision of institutions, the BRRD, as well as the mentioned SRM directives.

These are looking to address identified weaknesses in the existing prudential requirements. The proposed new amendments to existing CRD IV /CRR legislation include the European implementation of Leverage Ratio requirements, as well as Net Stable Funding Ratio the implementation of some of the ‘Basel 4’ accord.

Developments are expected in 2017 as the texts of the proposals are to be discussed and implemented on a national level.

The summary of the legislative initiatives above is not by any means exhaustive and has a purely informative nature. 

Dahterova & Partners - Attorneys at Law


Bulgaria, 25 January 2017

New EU-Regulation

Good news for our clients in need of measures for a cross-border debt recovery in civil and commercial matters.

As from January 18th, 2017 a new EU Regulation (nr. 655/2014) is applicable in all Member States of the EU. This Regulation establishes a procedure to facilitate cross-border debt recovery.  

Protective measures

In all Member States it is possible to obtain protective measures such as account preservation orders. The conditions for the grant of such measures and the efficiency of their implementation however vary considerably.

European Order

From now on it is possible to obtain a European Account Preservation Order. This Order will prevent the creditor’s claim from being jeopardised through the transfer or withdrawal of funds which are held by the debtor in a bank account maintained in another Member State.


It is a condition that the Order is requested to a Court in another Member State than where the bank account to be seized is maintained by the debtor. Another condition is that the creditor is domiciled in another Member State than where the bank account of the debtor is maintained.

For example: the creditor is domiciled in Belgium and his debtor has a bank account in The Netherlands. The creditor can make an application for an Order to a Belgian Court, regardless where his debtor is living. So, if the debtor is also living in Belgium but he maintains a bank account in The Netherlands, it will now be possible to seize the Dutch bank account.  

Unknown bank account

In case the creditor has obtained in Belgium an enforceable judgment, which requires the debtor to pay the creditor’s claim and the creditor has reasons to believe that the debtor holds one or more accounts with a bank in The Netherlands, but knows neither the name and/or address of the bank nor the IBAN, BIC, he may request the Belgian court that the ‘information authority’ of The Netherlands obtain the information necessary to allow the bank or banks and the debtor’s account or accounts to be identified.

In The Netherlands this ‘information authority’ is the bailiff. The bailiff is authorized to submit a request for obtaining account information from banks, based in The Netherlands. The banks are obliged to reply to the request expeditiously. The bank is not allowed to inform the debtor.

Roderick Rischen,

Rischen & Nijhuis, advocaten

Rotterdam, January 13th, 2017

Par voie d’ordonnance rendu le 10 février 2016, le gouvernement a promulgué une réforme du droit des contrats qui a modifié environ 300 articles du Code Civil. A cette occasion, il convient de vérifier les conditions générales de vente et d’affaires pour s’assurer de la conformité à la nouvelle législation.

Voici trois exemples de modifications importantes:

1.   Les informations précontractuelles

Le texte de loi prévoit que la partie qui connaît une information dont l’importance est déterminante pour le consentement de l’autre doit l’en informer dès lors que légitimement cette dernière ignore cette information. On fait confiance à son contractant. Le manquement au devoir d’information peut entraîner l’annulation du contrat.

L’entreprise doit donc réfléchir aux informations déterminantes pouvant influer sur la volonté du client de signer le contrat. Il convient de les inscrire au contrat ou de les communiquer par écrit avant signature et faire approuver par le client qu’il en a pris connaissance et les a comprises.

2.   Les contrats d’adhésion

La réforme du droit des contrats prévoit qu’en cas de doute sur l’interprétation des contrats, quand une clause n’est pas claire, l’interprétation du contrat se fera en faveur de la partie qui n’a pu négocier.

3.   Les circonstances imprévisibles

Le texte nouveau prévoit que « si un changement de circonstance imprévisible lors de la conclusion du contrat rend l’exécution onéreuse pour une partie qui n’avait pu accepter d’en assumer le risque, celle-ci peut demander une renégociation du contrat à son co-contractant »

Cet article créée une certaine incertitude juridique car il permettra peut-être aux tribunaux de revenir sur l’interprétation de conditions substantielles du contrat. 

Il faudra attendre la jurisprudence nouvelle à venir. Il peut donc être utile de procéder à une révision des conditions générales.


Jean-Frédéric MAURO


Avocat à la Cour

France, Decembre 2016


‘Crimea – the Golden Island in the Black Sea’. This was the title of an exhibition which took place in the Allard Pierson Museum (APM) in Amsterdam from February till September 2014. Works of art from several museums in Crimea had been transferred to Amsterdam with an export authorization, issued by the Ukraine Government. In March 2014 the Parliament of the Autonomous Republic of Crimea decided to join Russia.

After the exhibition APM did not know to whom to return the works of art. The Crimean museums started a procedure before the Court of Amsterdam against APM. The State of Ukraine intervened in that procedure.

The Amsterdam Court issued its judgment on 14 December 2016.


Both the Crimean museums and the State of Ukraine claimed  from APM to return the works of art to them.

The museums argued that APM had the objects on the basis of an operational agreement in which APM had guaranteed to return the objects to the museums after the exhibition. The museums and not the State of Ukraine are the proprietor of the objects.

The State of Ukraine argued that the works of art are the cultural heritage of Ukraine. The Law of Ukraine On Protection of Archaeological Heritage states in article 18 that cultural heritage and archaeological objects are the property of the State of Ukraine. Furthermore the State argued that the export license, which was valid until the end of the exhibition was expired. As a result of that they are considered unlawfully exported.


The Court of Amsterdam did not decide upon the question who is the lawful owner of the works of art. On the basis of article 1012 of the Dutch Code of Civil Procedure the ownership will be  determined by the national law of the State which has brought proceedings for recovery after the return of the works of art.

Cultural Property

The Court established that all parties involved agreed that the works of art belong to the cultural heritage. In the UNESCO Treaty of 1970 `cultural property' is defined as property which, on religious or secular grounds, is specifically designated by each State as being of importance for archaeology, prehistory, history, literature, art or science. The museum claimed that the works of art belong to the cultural heritage of Crimea. The Republic of Crimea however is not recognized as a State. At the time of export to The Netherlands Crimea was a part of Ukraine.

Illicit (Unlawful) Export

The Parties to the UNESCO Convention recognize that the illicit import, export and transfer of ownership of cultural property is one of the main causes of the impoverishment of the cultural heritage of the countries of origin of such property. Although at the time of export of the works of art, there was no illicit (unlawful) export, as the State of Ukraine had issued an export licence, at the end of the exhibition, the licence was expired.


The Court decided that the expiration of the export licence was to be considered as equivalent to illicit export. Therefore the works of art should be returned to Ukraine. However the Court also decided that the judgment would not be enforceable forthwith. If in appeal the Court of Appeal would decide differently and in the meantime the works of art would have been returned to Ukraine, APM would be in an impossible position, as the Allard Pierson Museum would not be able to return the works of art to the Crimea museums.

The museums have the possibility to appeal against the judgment of the Amsterdam Court until 14 March 2017.

Roderick D. Rischen

Rischen & Nijhuis advocaten

16 December 2016

As intellectual capital and more precisely intellectual property (IP) and intellectual property rights (IPRs) play an increasingly important role in corporate strategy , the accurate valuation of IP remains a major obstacle to their emergence as a tradable asset class. Though there are several generally accepted ways to measure the value of IC/IP, the introduction of more transparency in IP valuation procedures may render the trading of IP rights significantly more efficient and profitable which can be used in legal cases.

Recently the European Commission (EC) appointed panel of European IP valuation experts drawn from a range of disciplines including those involved with accounting, business valuation, IP consulting, litigation and damage award activities.

The panel's task was to consider how IP valuation plays a part in the policy for the "Innovation Union" and the bottlenecks that occur. This Expert Group focused on valuation methods for IP and their use; to identify bottle necks in the valuation methods used for the purpose of a company’s financial reporting, access to finance and litigation; to identify good practices; and to recommend possible policy actions. The intangible assets created through the processes of innovation represent a major share of the value of today's businesses. The IP rights associated with those assets are the legal underpinning for potential returns on investment in that innovation. Despite their fundamental importance, the understanding of IC/IP and IP rights does however differ widely amongst businesses large and small.

There is a clear need to increase market actors’ confidence and certainty in IC/IP valuation methods as a way to stimulate IC/IP transactions, to support IC/IP based financing and to give companies the tools to provide information about their IC/IP. This will also allow investors to better understand the business and the value of the company itself and even to provide decision makers with the required information to decide whether to enforce or to license IC/IP.

However, the Expert Group has demonstrated that it is not the lack of valuation methods per se, or even standards for valuing IP that are missing, but rather other barriers that are having a greater influence on business and lenders. As IP is, by its nature, innovative and therefore different, each case for valuation requires investigation, rather than having an automated approach to IP valuation. As a result, IP valuation of a company’s assets is an opinion, at a particular point in time – similar in many respects to the way that a legal opinion is given.

Although an informed layman might proffer a good guess, it is important to note that in the same way that one cannot automate the judgment on a law suit, one cannot automate judgment on an independent IP valuation. There are many factors involved and evidence and purpose can have a large impact.

The valuation of IP assets is a challenge but , new measuring systems and accounting systems are entering the business scene and will contribute to decisions when IP is protected by rights such as patents and trademarks, where a requisite for obtaining such rights is that the IP starts to exist. Valuation involves assumptions and judgment by the valuer derived from and justified based on a bespoke, rigorous analysis of the IP within its business context, together with its importance versus

The bottleneck for the improvement of an IP market is not in the lack of accepted methods or standards, their content or consistency, but in the limited dissemination of the fact that they exist and the little confidence in their results.

This expert group has firstly investigated European best practice in IP valuation as performed by financial institutions that are providing capital, particularly to SMEs. This report presents the results of this research and their approach to IP backed financing – the successes and failures and whether IP valuation is actually carried out as part of the financing process.

The findings of the research carried out are summarized under the headings of equity financing and debt financing and some examples of current practice are provided. We note that there is a significant difference in the approach to lending to SMEs and start-ups compared with larger corporate that have a strong trading history. A solution is needed to fund the commercialization of innovative ideas, with the value of the IP asset acting as collateral.

Overcoming the barriers to lending against IP assets is therefore attractive at a national and European Level.

It must be noted that cases of intangible asset based lending (IABL) have occurred in certain circumstances. Combined asset based lending has been achieved whereby a bank provides a loan to a pension fund against tangible assets and the pension fund then provides a sale and lease-back arrangement against intangible assets. IABL from pension funds (on a sale and lease back arrangement) rather than banks, provides a route for SMEs to obtain loans that is gaining increasing attention. One reason given for this uptake in IABL between a company and director pension funds is the growing number of SMEs who have difficulties in securing bank loans.

In the Accounting and Reporting section the Expert Group reports that there are limitations on when and how it is possible to place the value of IP assets on the balance sheet of the company. The complexity of IP from an accounting perspective leads to problems in its reporting, which may result in the vulnerability of firms which base most of their performance on IP. The existing regulatory situation implies that IP will be recognize in more and more cases . In the past historical cost based on a previous acquisition of such IP. It is difficult to recognize internally generated IP as, when the expenditure to develop the IP is incurred, it is usually unclear whether it will generate benefits in the future. As a consequence, an important part of internally generated IP was not recognized in the balance sheet of an enterprise, meaning that potential investors are not receiving some relevant information about the company.

This is changing. The filing of a “management report” together with the annual report, giving detailed information about IP value, seems to be a useful vehicle to improve publicly available information on intangibles. There are now already measure systems and accounting systems available which are in line with the IAS and IFRS accounting standards.

Finally, the Expert Group states that an issue that influences a company’s decision to protect its IP, especially in the case of SMEs, is to what extent such rights are enforceable, the time and costs involved in litigation, and the foreseeable economic results. The quality of the enforcement system has an important impact in IP protection.

SMEs and large companies need to be assured an accessible justice system in case of infringement, validity and other IPR related litigation cases, which implies the need to provide judges and professional valuers with the appropriate tools and data to facilitate valuation in litigation.

As a result of the in-depth analysis carried out in all the mentioned areas, the Expert Group recommends a number of policy actions that could have a significant impact on reducing the identified barriers in order to increase the efficient use of IP valuation and to make such valuation flexible, transparent and reliable to respond to market requirements.

Please read more on:

ANTEIUS Advocaten - Belgium

December 2016