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A new stock exchange geared towards startups is set to open in Chile in this summer. It should help the country achieve its goal of becoming a regional hub for startups. And its offering model could be exported to other jurisdictions.

European bank capital will come of age this year. Regulatory and market developments have combined to create long-awaited optimism around the asset class

Alexei Bonamin Ricardo Mastropasqua On December 20 2013, the Brazilian Exchange Securities Commission (CVM) issued a set of rules which regulate the rendering of services related to the Brazilian capital markets' infrastructure, as follows: (i) CVM Instruction 541 regulates matters regarding the centralised deposit of securities; (ii) CVM Instruction 542 governs the rendering of securities custody services; and (iii) CVM Instruction 543 regulates securities bookkeeping services and the issuance of securities certificates. In accordance with CVM Instruction 541, the centralised deposit service of securities comprises the following activities: (i) securities' safekeeping by the central depository; (ii) controlling the chain of ownership of securities in the deposit accounts maintained on behalf of investors; (iii) restricting practices related to securities' disposal by the ultimate investor or by any third party outside the central depository environment; and (iv) the handling of trading instructions and of incidental events that affect the deposited securities, with the corresponding records on the deposit accounts. CVM Instruction 541 does not apply to positions held in the derivatives market outside the central depository environment. However, it does apply to the establishment of liens and encumbrances on positions held in derivative agreements of any kind, provided that the central depository is also authorised to provide registration services to such agreements. CVM Instruction 541 also applies to financial bills and other instruments that are subject to the jurisdiction of CVM.

Takeho Ujino The Act on Special Provisions of Civil Court Procedures for Collective Recovery of Property Damage of Consumers (Act 96 of 2013 – the Act) was promulgated on December 11 2013, and is scheduled to come into force within three years – the specific date to be designated by a cabinet order. The Act introduces a new class action system that sets out procedures which enable a group of consumers to recover damages collectively in a simple and prompt manner (the system). The system consists of two stages. In the first stage, the court will render a declaratory judgment on the common liabilities of the accused business operator, which must arise from a common legal and factual cause and be shared by multiple aggrieved consumers (common liabilities). Only a specified qualified consumer organisation certified by the Prime Minister as fulfilling the requirements of the system may file a first stage procedure. If the organisation succeeds at the first stage, the amount to be paid to each aggrieved consumer will be determined at the second stage, during which the group of aggrieved consumers delegates the resolution of their claims to the organisation, which then brings the relevant claims to the court. The court will then issue a decision regarding the amount of compensation that can be recovered from the accused business operator by each of the aggrieved consumers.

Soonghee Lee In late 2013, the Supreme Court rendered a decision involving the issue of whether the contents of an investment prospectus is contractually binding if it differs from the contents of the trust agreement provided to the investor under an investment trust agreement. In this case, the plaintiffs claimed damages against financial companies on the grounds that the asset management company, without the plaintiffs' prior consent, changed the transaction counterparty to Lehman Brothers Asia, which was different to that stated in the investment prospectus. Further, they stated that the sales companies sold more than W20 billion ($18.5 million) of beneficiary certificates for the fund without considering the possibility of such change in transaction counterparties, and therefore, since the plaintiffs were provided information which made it impossible for them to be aware of the relevant facts (due to the different investment subject and investment limit from those contained in the investment prospectus) such acts constituted tortious conduct and default of contractual obligations. At the appellate level (before appeal to the Supreme Court), the plaintiffs partially prevailed against the asset management company. But the Supreme Court reversed the appellate court's decision on the grounds that (among others): (i) since the part of the investment prospectus which stated that the transaction counterparty to the OTC derivative products was BNP Paribas, cannot be viewed as merely an elaboration on the terms of the trust agreement, such contents cannot be viewed as a part of the terms of the investment trust agreement and contractually binding; and (ii) given that the bankruptcy of Lehman Brothers could not have been predicted, the change of the transaction counterparty to the OTC derivative product due to unavoidable circumstances, with a payment guarantee of Lehman Brothers (which has a similar credit rating as BNP Paribas) cannot be viewed as a breach of the investment prospectus or breach of fiduciary duty.

Elias Neocleous The Cyprus Securities and Exchange Commission (CySEC) has announced a number of proposed amendments to the Laws Regulating Companies providing Administrative Services and Related Matters of 2012 and 2013 (the ASP Law), following discussions between the Ministry of Finance, the troika of providers of international financial support to Cyprus, and the competent authorities (namely, the Cyprus Bar Association, the Institute of Certified Public Accountants of Cyprus and CySEC). The proposed amendments aim to address practical issues that have emerged, and to meet the requirements of the Memorandum of Understanding with the troika. There are several main proposed amendments, the first being that occupational retirement benefit funds (under the supervision of the Registrar of Occupational Retirement Benefit Funds in accordance with the Establishment, Activities and Supervision of Occupational Retirement Benefit Funds Law of 2012) are explicitly excluded from the scope of the ASP Law.

Prior to the enactment of Capital Markets Law 6362 and of December 30 2012 (the Law), it was not clear whether over-the-counter (OTC) derivatives were subject to the Capital Markets Board's (CMBs) regulations under the old legislation. This was because the old legislation did not provide clear rules in terms of OTC derivatives. According to the CMB's principle decisions issued under the old legislation, OTC derivatives were not subject to the CMB regulations. Accordingly, it was generally understood that OTC derivatives did not require an authorisation from the CMB under the old legislation. However, given the fact that Article 6/8 of Decree No. 32 requires such transactions to be carried out through CMB-licensed intermediary institutions operating in Turkey, or by intermediary institutions abroad, this gave rise to an uncertainty amongst banks in particular that were willing to execute OTC derivatives with their customers.

Diego Alejos Rivera In the past two years, several congressmen have presented bills which seek to adequately regulate credit cards, as they are an ever-growing financial service in Guatemala. The bills presented seek to establish adequate rules for all parties involved: credit card issuers; credit card holders and affiliated establishments. The issuance of credit cards is still only regulated by article 757 of the Guatemalan Commercial Code. This article, which came into effect in 1971, is the only legal basis for a multimillion dollar business. Article 757 establishes the requirements each credit card should incorporate, but fails to provide any structure on which the parties involved may act upon. As such, the evolution of credit card usage and issance in Guatemala so far has been mostly unregulated. This has given way to a business regulated through customary practice, which in some cases has allowed for certain practices that have raised concern from multiple sectors. Although not common, such practices have created a need, as proposed by various congressmen, to adequately regulate the credit card business through the passing by Congress of a modern and technical bill, which will set clear and modern rules for all participants.

Hogan Lovells' Alex Sciannaca and Giles Hutt analyse the steps being taken by the US and EU to implement the global convention on choice of law agreements

The US has proposed a $1 billion loan guarantee programme for Ukraine. Arnold & Porter's Steven Tepper explains why this marks a significant expansion of the government's foreign assistance tool