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On July 1 1998 Commissione Nazionale per le Società e la Borsa (CONSOB) approved Resolution No. 11522 introducing new rules for intermediaries. The rules describe the procedure to be followed by an EU investment company to obtain authorization from the Italian authorities to offer in Italy services not admitted to mutual recognition.

The slump in issuance since October 1997 has affected all firms with Asian equities practices with the biggest offerings bringing more comfort to US rather than UK firms. Nick Ferguson reports

The Commission has proposed a Directive to establish a clear regulatory framework for the distance-selling of financial services within the single market.

Under the German Banking Act, banks and financial services institutions are obliged to have an appropriate amount of own funds to meet their obligations to their creditors. The various risks arising from their business must be recorded in their trading book and in their banking book, weighted and backed by own funds. The rules as to how this should be done were announced by the German Federal Banking Supervisory Office (BAKred) in October 1997 in its Changes and Supplements to the Principles Concerning the Capital and Liquidity of Institutions which, for the most part, came into effect on October 1 1998. The essential item is the new Principle I which regulates capital requirements for market risks (foreign currency risks, commodity risks and position risks from trading book transactions) and counterparty risks (credit risks).

The task force on the future of the Canadian financial services sector was established by the Canadian government in December 1996 to undertake a careful, independent and objective analysis of the broad trends affecting the Canadian financial services industry, and to provide advice on public policy issues to help the government develop a framework for the industry in the 21st century. The task force was comprised of an independent and diverse group of individuals under the chairmanship of lawyer Harold MacKay.

The long-awaited promulgation of the new Chinese Contract Law approaches. On September 7 1998, the People's Daily published the draft of a Contract Law containing 441 articles, another step towards unification of domestic and foreign-related legislation in China. The draft contains general provisions on formation, validity, performance and termination of contracts, as well as special provisions on certain types of contracts (eg sales contracts, loan contracts, lease and financial lease contracts, construction contracts and transportation contracts).

In a highly significant case under the US bankruptcy laws, Hong Kong and Shanghai Banking Corporation v Simon [9th Cir 1998], the US Court of Appeals for the Ninth Circuit ruled that a foreign creditor may not bring a foreign collection proceeding against a debtor that has obtained a discharge under the bankruptcy law. In so doing, the Ninth Circuit has affirmed the extraterritorial effect of the US Bankruptcy Code.

US law firm White & Case and Dutch firm De Brauw Blackstone Westbroek have advised Royal Ahold on its US$2.3 billion global offering. The offering involved listings on the Dutch AEX Stock Exchange, the Swiss Stock Exchange and the New York Stock Exchange. The transaction included 51,750,000 shares, also issued as American Depositary Receipts (ADRs), and Fls 1.495 billion (US$817 million) convertible subordinated notes due 2003, also issued in the form of ADRs. It was one of the first offerings into the US to take account of the euro due to the maturity of the convertible notes being reached in 2003. The offering is intended to help finance the recent purchase by Ahold of Giant Food.

US firms Cleary Gottlieb Steen & Hamilton and White & Case took the lead on the US$300 million 10-year issue by the state-owned Electricity Generating Authority of Thailand (EGAT) which closed on October 14. The issue, sold under Rule 144A in the US, incorporated a World Bank guarantee of principal and interest (on a partial basis), the first time the World Bank has provided a guarantee of principal and a single coupon payment on a rolling basis. Through this structure, Asian borrowers can access the global markets without incurring the risk premiums imposed since the financial downturn in July 1997.

UK firm Allen & Overy has provided advice to the project company and the sponsors of a US$373 million project finance deal in Vietnam. The Nghi Son Cement Company project is one of the largest project finance deals in Vietnam this year and one of the first deals to be financed with a multi-tranche limited recourse facility. It is also one of the first times that an offshore account has been used to channel finance directly to a project in Vietnam.