April 2, 2020 1 1 References to “various measures” in this document denotes that a range of measures (not limited to the scope of this document) have been taken in the jurisdiction in response to COVID-19. COVID-19 – SHORT-SELLING RESTRICTIONS AND EMERGENCY INSOLVENCY MEASURES This document is for information purposes only and provides a high-level overview of short-selling restrictions/bans and business and insolvency law measures implemented in various jurisdictions following COVID-19. Some additional developments can be found here. This document does not contain a comprehensive list of all local measures and COVID-19 may have an impact on other related areas. Please note the date of this document. Because of the dynamic nature of this area, the measures announced and applicable legal framework may have changed. Please contact local counsel for legal advice. Jurisdiction Short-selling restrictions or bans Other applicable business and insolvency law measures Local Counsel Argentina No. Argentina’s Central Bank declared March 16, 2020 – March 31, 2020 as “non-business days” (Resolution No. 117, dated March 19, 2020). http://www.bcra.gob.ar/Noticias/Dias-inhabiles-marzo-2020.asp Sebastian Luegmayer Estudio O’Farrell Armenia No. Various measures 1 , no current impact on derivatives. Aleksandr Khachaturyan TK & Partners Australia No. Various measures, including temporary amendments to insolvency and corporations laws. Should not affect analysis in counsel’s latest netting opinion as the amendments do not interfere with the Payment Systems and Netting Act, which are expressed to apply despite any other law. Scott Farrell Max Allan King & Wood Mallesons Austria Yes – until 18 April 2020 https://www.fma.gv.at/downloa d.php?d=4337 https://www.fma.gv.at/en/fma- Various measures, including guarantees and subsidies as well as plethora of legislation, including in insolvency and enforcement matters. According to draft legislation of 2 April 2020, a moratorium for consumer loans and loans to micro-enterprises is proposed. Martin Ebner Schoenherr Jasna Zwitter-Tehovnik DLA Piper
Transcript
April 2, 2020
1
1 References to “various measures” in this document denotes that a range of measures (not limited to the scope of this document) have been taken in the jurisdiction in response to COVID-19.
COVID-19 – SHORT-SELLING RESTRICTIONS AND EMERGENCY INSOLVENCY MEASURES This document is for information purposes only and provides a high-level overview of short-selling restrictions/bans and business and insolvency law measures implemented in various jurisdictions following COVID-19. Some additional developments can be found here. This document does not contain a comprehensive list of all local measures and COVID-19 may have an impact on other related areas. Please note the date of this document. Because of the dynamic nature of this area, the measures announced and applicable legal framework may have changed. Please contact local counsel for legal advice.
Jurisdiction Short-selling restrictions or bans
Other applicable business and insolvency law measures Local Counsel
Argentina No. Argentina’s Central Bank declared March 16, 2020 – March 31, 2020 as “non-business days” (Resolution No. 117, dated March 19, 2020). http://www.bcra.gob.ar/Noticias/Dias-inhabiles-marzo-2020.asp
Sebastian Luegmayer Estudio O’Farrell
Armenia
No. Various measures1, no current impact on derivatives. Aleksandr Khachaturyan TK & Partners
Australia No. Various measures, including temporary amendments to insolvency and corporations laws. Should not affect analysis in counsel’s latest netting opinion as the amendments do not interfere with the Payment Systems and Netting Act, which are expressed to apply despite any other law.
Scott Farrell Max Allan King & Wood Mallesons
Austria
Yes – until 18 April 2020 https://www.fma.gv.at/download.php?d=4337
https://www.fma.gv.at/en/fma-
Various measures, including guarantees and subsidies as well as plethora of legislation, including in insolvency and enforcement matters. According to draft legislation of 2 April 2020, a moratorium for consumer loans and loans to micro-enterprises is proposed.
Martin Ebner Schoenherr Jasna Zwitter-Tehovnik DLA Piper
Yes – until 17 April 2020 https://www.fsma.be/en/news/prohibition-short-selling-update-19032020
Various measures, including moratorium on bank payments and guarantee scheme. Draft Royal Decree that COVID-19 and related measures will qualify as force majeure. It will apply to commercial contracts, including financial contracts. Payment obligations should not be suspended however.
Marc Vermylen Loyens & Loeff Advocaten – Avocats
Bolivia2 No. Various measures, including the Authority for the Supervision of the Financial System, the Central Bank of Bolivia and the Plurinational Legislative Assembly of Bolivia issuing several regulations and laws to implement the Quarantine Supreme Decrees issued by the Central Government:
Extension and Suspension of the deadlines and terms of administrative procedures
Suspension of the obligation to send financial information and non-enforcement of related fines or penalties
Deferral of credit obligations https://www.asfi.gob.bo/images/ASFI/DOCS/SALA_DE_PRENSA/Notas_de_prensa/2020/RES._SUSPENSION_DE_PLAZOS.pdf
3 Please note there is no ISDA netting opinion on Bulgaria. Please see the informal country updates - https://www.isda.org/informal-country-updates/ 4 Please note there is no ISDA netting opinion on China. 5 Please note there is no ISDA netting opinion on Croatia. Please see the informal country update dated August 2019 - https://www.isda.org/informal-country-updates/
Brazil
No. Various measures, no current impact on derivatives.
Tiago Lessa Fernando R. de Almeida Prado Pinheiro Neto Advogados
Bulgaria3 No. Various measures, including voluntary moratorium.
Tsvetan Krumov Schoenherr
Chile
No Various measures, including postponement of the schedule to implement Basel III standards and amendment by the CMF to the regulation on the cash amount that banks must collateralize for derivatives variation margin that are netted on a bilateral basis. http://www.cmfchile.cl/portal/prensa/604/w3-article-28508.html http://www.cmfchile.cl/normativa/cir_2248_2020.pdf
Diego Peralta Salvador Valdés Carey y Cia Ltda
China4
No. Various measures, no current impact on derivatives.
Minny Siu King & Wood Mallesons
Colombia No. Various measures, no current impact on derivatives. Ricardo Fandiño-De la Calle Gomez-Pinzon Zuelta
Croatia5
No. Various measures, note suspension on enforcement measures against debtors.
Ozren Kobsa Schoenherr
Czech Republic
No. In response to a recommendation of the Czech Banking Association, banks have introduced a number of deferral of payments. Czech Chamber of Commerce may issue certificates recognising COVID-19 as a FM event.
6 Please note there is no ISDA netting opinion on Ecuador. Please see the informal country update - https://www.isda.org/informal-country-updates/
Government approved new draft bills proposing the following main changes:
Czech debtors (i.e. having COMI in the Czech Republic) to be protected from creditors' insolvency petition filings until 31 August 2020;
Czech debtors can apply for an extraordinary moratorium limiting their ability to make significant asset disposals and their counterparties in terminating or refusing to perform certain supply contracts (can last until the end of 2020);
Czech corporate borrowers may apply for suspension of other than interest payments under loans and similar agreements until 31 October 2020.
Exemptions ensure that the draft bills do not materially affect payments and deliveries under derivatives or similar financial transactions. Close-out netting and financial collateral arrangements retain the same statutory protection. Both bills are subject to debate in the Czech Parliament. Expected entry into force is the second half of April 2020. https://www.komora.cz/obchod-a-sluzby/osvedceni-pro-zahranicniho-partnera/ https://www.cnb.cz/en/cnb-news/press-releases/CNB-regards-loan-moratorium-as-economically-justified/ https://www.isda.org/a/Ss7TE/ISDA-COVID-19-Update-Memorandum-Czech-Republic.pdf
Ecuador6 No. Various measures, including the introduction to Ecuadorian legislation of “extraordinary defer of credit obligations”. https://www.superbancos.gob.ec/bancos/wp-content/uploads/downloads/2020/03/resol_JPRMF-2020-0106-O.pdf).
The Superintendence of Companies, Securities and Insurance established a suspension of all deadlines and terms of the administrative procedures, until April 16, 2020. http://progressservices.com.ec/wp-content/uploads/2020/03/Resoluci%C3%B3n-No.-SCVS-INPAI-2020-00002712.pdf https://www.captur.travel/images/PDF/SCIASPRORROGABALANCESResolucionSCVS-INPAI-2020-00002715.pdf).
France
Yes – until 16 April 2020 https://www.amf-france.org/en/news-publications/news-releases/amf-news-releases/amf-announces-short-selling-ban-one-month
Various measures, including the State and local authorities recognizing COVID-19 as a FM event. https://minefi.hosting.augure.com/Augure_Minefi/r/ContenuEnLigne/Download?id=7428EB4B-E77B-40AA-8BB9-A5C0DA473BFB&filename=2046%20-%20Discours%20de%20Bruno%20LE%20MAIRE%20-%20R%C3%A9union%20avec%20Muriel%20PENICAUD%20et%20Oliver%20VERAN%20sur%20coronavirus.pdf https://www.economie.gouv.fr/coronavirus-soutien-entreprises https://www.isda.org/a/ce7TE/Jones-Day-Note-to-ISDA_March-2020.pdf
Alban Caillemer du Ferrage Jones Day
Germany
No. Various measures, including a new bill. https://www.bmjv.de/SharedDocs/Gesetzgebungsverfahren/DE/FH_AbmilderungFolgenCovid-19.html
Marc Benzler Clifford Chance Jörg Fried Linklaters
Greece
Yes – until 24 April 2020 http://www.hcmc.gr/en_US/web/portal/home/
No current impact on derivatives.
Alexander Metallinos Karatzas & Partners
Hong Kong No. Various measures, no current impact on derivatives. Chin-Chong Liew I-Ping Soong Linklaters
Hungary No. Various measures, note Government Decree no. 47/2020 (18 of March). Businesses exempt from certain payment obligations, moratorium introduced under all retail and corporate financings until 31 Dec 2020. https://urldefense.proofpoint.com/v2/url?u=https-3A__magyarkozlony.hu_hivatalos-2Dlapok_K1qf3TC0dJtqGRTM2aa05e6d0eea6d0ba_dokumentumok_0a45e158ca1d1b307b2057292893bc7981c3d500_letoltes&d=DwQGaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=Kz4tl3tabppuKiJQ4XwLyUSGVeYmYs8H3Db0uisEqL0&m=Vrpn19CTXAya3CtyyJ4XnwUqGPOH841rb0wC35EXgBY&s=gtj_wYuA6cl-Q2oN0DfiI3LF5bSHZbr3Q-7IQLPJZps&e
Zoltan Lengyel Allen & Overy LLP
Iceland
No. Various measures. On March 19, 2020 the Icelandic parliament (“Althingi”) resolved to abolish the Parliament's work schedule up to and including April 20, 2020. During this period, Althingi will only deal with matters related to the COVID-19.
Guðbjörg Helga Hjartardóttir Logos
India
Yes – until 30 April 2020 https://www.sebi.gov.in/media/press-releases/mar-2020/regulatory-measures-taken-by-sebi-in-view-of-ongoing-market-volatility_46389.html
The Indian government and regulators have taken various measures, including a complete lock down across India from midnight March 25, 2020 for 21 days. Banks and the capital and debt market services notified by the Securities and Exchange Board of India are exempt. Note changes to trading hours. The Reserve Bank of India has permitted banks and non-banking financial companies a 3 months’ moratorium on payment of all instalments which are due between 1st March 2020 and 31st May 2020. https://pib.gov.in/newsite/PrintRelease.aspx?relid=200655
7 Please note there is no ISDA netting opinion on the Marshall Islands. Please see informal country update dated June 2018 - https://www.isda.org/informal-country-updates/
Indonesia Yes – until further notice https://www.ojk.go.id/en/berita-dan-kegiatan/siaran-pers/Pages/Joint-Press-Release-OJK-and-SRO-Maintain-Continuous-Stock-Exchange%e2%80%99s-Orderly,-Fair.aspx
Revisions to market timings from 30 March 2020 until 29 May 2020 including derivative markets https://www.bi.go.id/en/ruang-media/siaran-pers/Pages/sp_222420.aspx
No. Various measures, no current impact on derivatives.
Judith Lawless McCan FitzGerald
Italy
Yes – until 18 June 2020 http://www.consob.it/web/consob-and-its-activities/news-in-detail/-/asset_publisher/kcxlUuOyjO9x/content/press-release-17-march-2020-hp/718268
Various measures, no current impact on derivatives. Lisa Curran Allen & Overy
Luxembourg
No. Various measures, no current impact on derivatives. Henri Wagner Allen & Overy
Malaysia Yes – until 30 April 2020 https://www.sc.com.my/resources/media-releases-and-announcements/sc-and-bursa-suspend-short-selling-amid-covid-19-volatility
Various supervisory and prudential measures. https://www.bnm.gov.my/index.php?ch=en_press&pg=en_press&ac=5018&lang=en
Rabindra S. Nathan Shearn Delamore and Co
Marshall Islands7
No. RMI Registry encouraging participants to regard COVID-19 as a FM event. https://www.register-iri.com/covid-19/
8 Please note there is no ISDA netting opinion on Moldova. 9 Please note there is no ISDA netting opinion on Montenegro. 10 Please note there is no ISDA netting opinion on Paraguay. Please see informal country update dated October 2019 - https://www.isda.org/informal-country-updates/
Mauritius No Various measures, including postponement of court cases.
Malcolm Moller Appleby
Moldova8 No. Various measures, no current impact on derivatives. Marina Zarija Schoenherr
Montenegro9
No. Various measures, including moratorium on bank loan payments and prohibition of distribution of dividends to shareholders of banks. The dividend payments may only be transformed into share capital of the bank i.e. debt equity swap. https://www.cbcg.me/me/javnost-rada/aktuelno/saopstenja/usvojene-ekonomske-mjere-za-ublazavanje-posljedica-pandemije?id=1694 https://www.cbcg.me/me/javnost-rada/aktuelno/saopstenja/odrzana-62-sjednica-savjeta-centralne-banke-crne-gore?id=1710
Nikola Babic Schoenherr
Netherlands No. Various measures, no current impact on derivatives. Pim Rank Frans van der Eerden NautaDutilh
Paraguay10 No. Various measures following Decree No. 3442/20 dated March 9, 2020 which sets forth actions that must be taken by the government to prevent the spread of COVID-19. After this Decree, the government issued several regulations in different areas, among which, several regulations were enacted by the Paraguayan Central Bank to prevent a greater impact in the economy and to provide cash flow to financial entities in order to grant loans for the most vulnerable sectors. Also, the Paraguayan Central Bank stated that loans with payments up-to-date on February 29, or with no more than 30 days of delay, must be refinanced or the payment must be deferred for a later time. Additionally, terms in judicial cases have been
suspended in all the courts and tribunals that have not implemented the electronic judicial proceeding. Law No. 6524/20 was enacted, which declares a sanitary emergency in all the national territory due to COVID-19, and that sets forth several administrative, tax, and financial measures.
Peru
No. Various measures, no current impact on derivatives.
Pablo Berckholtz Baker & McKenzie
Poland No. Various measures, no current impact on derivatives. Polish Banking Association suggested steps to be taken by Polish banks, no action yet.
Bartosz Jagodzinski Allen & Overy
Portugal
No. Various measures, including a moratorium until 30 September 2020 under Decree Law no. 10-J/2020 of 26 March 2020. Note this is not applicable where the underlying transactions under an ISDA Master Agreement are financial instruments but financing under Master Agreements of non-financial assets such as commodities may theoretically be caught by such moratorium.
Tiago Lemos PLEN Sociedade de Advogados
Romania
No. Various measures, including possibility for companies to obtain emergency certificates from the Government, which may be used to suspend payment obligations under certain loan agreements. Pending legislative initiative for a moratorium on repayment of loans and payment of interest and fees and a stay of all debt enforcement proceedings related to loan and lease agreements until the end of 2020.
Andreea Toma Leroy
Russia
No. Various measures, including granting the powers to the Government to introduce moratorium on filing creditor applications for the bankruptcy of businesses and collection of debts and fines/enforcement of pledges. Also, if an insolvency filing is made within three months after the expiry of moratorium, the suspect periods will start from the moratorium introduction date, and there will be increased risks of claw-back for payments / deliveries made by the debtor during the moratorium.
No. Various measures, including moratorium on bank loan payments with clients of the national bank. https://www.nbs.rs/internet/english/scripts/showContent.html?id=15323&konverzija=no
Petar Kojdic Schoenherr
Singapore No. Various measures, including a six-month moratorium on enforcement actions against non-performing parties for certain types of contracts such as leases or loan facilities granted to small and medium enterprises. No measures specifically relating to derivatives. However there will be increased monetary thresholds for bankruptcy and insolvency (for companies/partnerships, the threshold for insolvency will be increased from S$10,000 to S$100,000) and the statutory period to respond to demands from creditors will be increased – these measures may affect derivatives transactions. https://www.mas.gov.sg/news/media-releases/2020/mas-and-financial-industry-to-support-individuals-and-smes-affected-by-the-covid-19-pandemic https://www.mlaw.gov.sg/news/press-releases/temporary-relief-for-inability-to-perform-contractual-obligations-due-to-coronavirus-disease-2019-covid-19-situation https://www.mas.gov.sg/news/media-releases/2020/comments-by-mas-on-covid-19-temporary-measures-bill
Francis Mok Allen & Gledhill
Slovakia
No. Various measures, no current impact on derivatives. Government is likely to approve 6 – 9 months deferral of payments on banking loans and finance lease agreements, but payments on derivatives, other financial instruments or other receivables should not be suspended by legislation, so far.
Peter Jedinak Renatus Kollar Allen & Overy
Slovenia
No. Various measures, no current impact on derivatives. Deferral of payments for eligible borrowers of bank debt (not automatic) for period of 12 months starting with approval by bank. Draft bill - the proposed measures should not affect the issue of netting, however, will (if adopted) in a limited manner amend the conditions for insolvency and court insolvency proceedings provided there is a significant link to the
consequences of COVID-19 and the insolvency of a debtor.
South Korea Yes – until 10 June 2020 http://meng.fsc.go.kr/common/pdfjs/web/viewer.html?file=/upload/press1/20200310181126_51a731e6.pdf
Various measures, including measures to stabilise financial markets. http://meng.fsc.go.kr/common/pdfjs/web/viewer.html?file=/upload/press1/20200324184742_c2e891e0.pdf
S.K. Cheong Kim & Chang
Spain
Yes – until 17 April 2020 https://www.cnmv.es/portal/verDoc.axd?t={5baf609e-ed4e-4dad-a697-80c55548e181}
Various measures following Royal Decree Law 7/2020 of 12 March and Royal Decree-law 8/2020 of 17 March 2020 each as amended by Royal Decree-law 11/2020 of 31 March 2020. No current impact on derivatives as regards the netting and collateral analysis. Short selling restrictions will however apply to transactions over shares or indexes through cleared and OTC derivatives.
Iñigo Gomez-Jordana DLA Piper
Sweden No. Various measures, no current impact on netting or insolvency in relation to derivatives.
No. Various measures, including a stay of all debt enforcement proceedings under art. 62 DEBA (effective as of the March 19, 2020 at 7 a.m. and will remain in place until midnight, April 4, 2020 (not applicable to financial institutions). This should not impact derivatives and netting analysis in ISDA opinions. https://www.admin.ch/opc/en/classified-compilation/20200744/index.html
Patrick Hünerwadel François Rayroux Lenz & Staehelin Olivier Favre Schellenberg Wittmer
Turkey Yes – until further notice http://www.cmb.gov.tr/Duyuru/Dosya/2020323/0
Various measures, including a recommendation by Banking Regulation and Supervision Agency (applicable to local banks) on postponement of credit receivables. A freeze of enforcement is enacted by Presidential Decree until 30/04/2020.
Ozge Okat Pekin & Pekin
UK No. Various measures, including new restructuring tools for insolvency laws. Draft legislation, publication expected mid-April. https://www.gov.uk/government/news/regulations-temporarily-suspended-to-fast-track-supplies-of-ppe-to-nhs-staff-and-protect-companies-hit-by-covid-19
England & Wales Guy Antrobus Emma Dwyer Allen & Overy
11 Please note there is no ISDA netting opinion on the Ukraine. Please see informal country update from November 2019 - https://www.isda.org/informal-country-updates/ 12 Please note there is no ISDA netting opinion on the Uruguay. Please see informal country updates - https://www.isda.org/informal-country-updates/
Scotland Stephen Phillips CMS Cameron McKenna
Ukraine11 No. Various measures, no current impact on derivatives. National Bank of Ukraine recommendation to banks to develop loan relief or loan restructuring product for corporates. Implementation of buffer capital requirements is delayed, namely a countercyclical capital buffer for all banks, as well as systemic buffer for systemically important banks (banks still must comply with minimum capital requirements).
Dmytro Pshenychniuk DLA Piper
Uruguay12 No. Various measures following Decree 93/2020 by the Executive Branch dated March 13, 2020 declaring sanitary emergency. No current impact on derivatives. On March 27, 2020 the Central Bank of Uruguay authorized banks and financial institutions to extend the terms for the payment of the following pending loans with non-financial clients for up to 180 days: (a) loans pending as of February 29, 2020; and (b) loans granted between March 1 and March 19, 2020 and lapsing on or before August 31, 2020 granted to clients directly or indirectly affected by the sanitary emergency declared on March 13, 2020. The extensions require the clients’ written consent, unless no additional interest accrues. No changes to insolvency, corporate or commercial law. Courts remain closed with very few exceptions between March 14 and April 3, 2020. https://medios.presidencia.gub.uy/legal/2020/decretos/03/cons_min_18.pdf https://www.bcu.gub.uy/Comunicados/seggco20049.pdf
