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In alleged response to an insider bid by 30% shareholder CAIH in the recent contest for control of Hurricane Hydrocarbons, the Hurricane board declared a special dividend payable by way of senior unsecured notes. A controversy arose because the notes contained a change-of-control provision that would be triggered by the acquisition of more than 50% of the Hurricane shares. Upon a change-of-control, the holders of the notes could elect to have the notes redeemed. The net effect was a potential cash depletion of $200 million from Hurricane's cash flow.

The New Zealand government has recently tabled the Securities Markets and Institutions Bill, in the first major revamp of New Zealand's securities and markets legislation since 1988. The Bill aims to increase both domestic and international confidence in New Zealand's securities markets and institutions by strengthening monitoring and the enforcement of securities law, requiring greater disclosure and providing for more effective enforcement of breaches. It will also bring New Zealand law into line with Australia, particularly in the areas of continuous disclosure and the enforcement of insider trading.

The promulgation of a new Trust Law, effective October 1 2001, represents an important step forward for China and its legal development. The Trust Law will have implications for many aspects of structuring investments and financings (including the taking of security) within China. The new law applies to civil, business and charitable trusts and is intended to pave the way for a new investment funds law to further stimulate the Chinese economy.

Australia has ventured furtively into the world of compulsory financial philanthropy. A new provision, s1013D of Australia's Corporations Act 2001, requires fund managers, superannuation funds and life insurance companies to disclose "the extent, if any, to which labour standards, environmental, social or ethical considerations are taken into account in the selection, retention, or realization of the investment".

In July the Securities and Futures Commission (SFC) issued a consultation paper intended to promote the protection of investors using exchange-traded funds (ETFs). This followed the pioneering launch in May of two Hong Kong ETFs relating to the Taiwan and Korea markets, and the anticipated future listing of other ETFs. The consultation paper's key recommendations include:

Judge Denis Davis, judge of the Cape High Court and a member of the Katz Commission on tax reform, has commented on the impact of the far-reaching changes to the Income Tax Act in recent years, suggesting that a pause is needed before the authorities address the three major areas still needing reform. All the changes in the past few years have had profound effects on tax legislation in South Africa, the main two being the change from the source to the residence based system and the introduction of capital gains tax (CGT). The tax system, according to Judge Davis, is now enormously complex, whereas the Commission had advocated as simple a system as possible.

Earlier this year the European Commission proposed the introduction of a new directive on market abuse. The proposed directive deals with insider dealing and market manipulation, and the definition of these activities is large enough to ensure that new abusive practices will fall under its scope of application.

Colombian banking laws are the main regulations applicable to local derivatives and financial operations. In addition, Colombian foreign exchange (FX) regulations, issued principally by the central bank, regulate cross-border derivative operations. The central bank has traditionally assumed and applied local banking regulations and interpretations issued by the Colombian banking superintendency to FX transactions entered into by financial institutions.

Allen & Overy secure Greek hat trick

While the US and its allies send armed forces to Afghanistan in a bid to win the so-called “war on terrorism”, governments and international bodies such as the IMF and OECD are developing plans for a less visible but equally important war on terrorist funding. Herbert Morais of Dewey Ballantine’s Washington, DC office, who attended the OECD’s Financial Action Task Force emergency meeting last month, reveals the Task Force’s tactics and the challenges ahead for governments and financial institutions