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Credit derivatives are contracts intended to transfer credit risk on loans, bonds and other assets (the underlying assets) from the protection buyer to the protection seller. Under these contracts, the payment or other obligations of the protection seller are triggered by credit events affecting the reference asset.

Since mid-1997, Hungarian legislation has imposed taxes on money transfers in cash so that cash payments made by companies over a certain sum (about Ft1.2 million (US$5.454 million)) entail various tax disadvantages. In an attempt to curtail cash payments, Hungary intended, on the one hand, to encourage non-cash money transfers common throughout Europe and, on the other hand, to gain greater control over the so-called black market.

The National Telecommunications Agency (Anatel) announced on September 8 1998 that the auction of the so-called mirror companies is set for December 2 1998 on the Rio de Janeiro Stock Exchange. The mirror companies will be able to exploit fixed telephony in three regions: region one (Tele Norte Leste mirror), region two (Tele Centro Sul mirror) and region three (Telesp mirror), as well as in competition with Embratel (domestic and international long-distance services, telegraphy, maritime communications and data transmission). Accordingly, there will be four mirror companies, all starting from non-existing structures, which will require considerable investment in infrastructure.

The US is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The New York Convention is incorporated into federal law by Federal Arbitration Act which governs the enforcement of arbitration agreements and arbitral awards. A principal advantage of the New York Convention is that a US party, in whose favour an international arbitration award has been rendered, may use the Convention to enforce the award in another country that has ratified the Convention. But may a foreign party use the Convention to enforce an award arising out of an arbitration proceeding in the US?

ING Group has purchased a leading stake in German bank BHF-Bank. The deal, which is worth DM 2.5 billion ($1.4 billion), involved a number of separate transactions through which ING increased its holding of BHF-Bank shares from 4.5% to 39%. ING is now the largest single shareholder of BHF-Bank. The transaction was completed on September 14. Final completion of the acquisition is dependent on gaining the consent of the regulatory authorities. The shares were sold by Allianz, DG Bank and Münchener Rück.

The Czech subsidiary of Slovak electrical company Slovenske elektrarne has issued Kr3 billion bonds (US$97.6 million). This is the first ever bond issue by a foreign issuer to be fully documented in and solely designed for the Czech Republic. The lead underwriter in the deal was ING Barings Capital Markets advised by US firm White & Case, Prague. Lead partner Ivan Cestr (primary issues/securities) was assisted by associates Kvetoslav Krejci and Josef Otcenasek.

• Clifford Chance has recruited three new partners. Jason Glover will be based in London, while Pablo Bieger and José Antonio Cainzos join the Madrid office. Glover is a private equity specialist and he was formerly with Asian Infrastructure Fund Advisers. Bieger, a corporate finance specialist, joins from Garrigues & Andersen. He had left Clifford Chance for Arthur Andersen in 1996. Cainzos was head of the litigation department of Baker & McKenzie and he will hold the same position at Clifford Chance.

The equities markets have seen some interesting deals despite the cold Russian winds spreading the Asian flu across the emerging markets. Nick Ferguson reports

In a second article on the Financial Services and Markets Bill, Charles Abrams of S J Berwin & Co, London discusses the proposed authorization requirements for UK and non-UK activities and the proposed restrictions on marketing investments and investment services

Simmons & Simmons, London is representing First Active, due to be listed on the London and Dublin stock exchanges in early October. First National Building Society became First Active, a public limited company, in preparation for the share issue. The price range prospectus gives First Active a potential market capitalization of between IR£387 and IR£510 million ($552-$718 million). Simmons & Simmons is representing First Active in the UK. The team is led by partner William Charnley, head of corporate finance. He is assisted by partners Alan Karter (corporate) and Nick Cronkshaw (tax).