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Q&A: Fangda Partners

1. What are the current regulatory frameworks governing the life sciences industry in China, and how have they evolved in recent years?

Legislation wise, the Drug Administration Law and its implementation rules are pivotal to the pharmaceutical sector, overseeing the entire lifecycle of chemical and biological products. For medical devices (including in-vitro diagnostics), the Regulations for the Supervision and Administration of Medical Devices form a fundamental framework.

There are numerous other laws and administrative regulations governing various aspects of the life sciences industry. The National Medical Products Administration, under the State Administration for Market Regulation (SAMR), is the primary regulatory authority for drugs, medical devices, and related activities. The SAMR handles matters such as marketing authorisation, R&D, advertising, fair competition, anti-bribery, and antitrust in the life sciences industry. Other regulators playing significant roles include the National Health Commission and the Ministry of Science and Technology of China, covering the healthcare system and the regulatory regime of human genetic resources, respectively.

Recent healthcare regulatory reforms focus on implementing the Marketing Authorisation Holder (MAH) system and expedited pathways for innovative products, reflecting China’s continuing commitment to innovation and a comprehensive approach to drug and device regulations.

2. Can you provide an overview of the key intellectual property and patent issues faced by life sciences companies operating in China?

Life sciences companies face diverse challenges based on their portfolios.

For those focusing on innovative drugs, the 2021 introduction of the drug patent linkage system is a valuable tool for handling patent infringement and generic drug competition. Also, the law, providing a pharmaceutical patent term extension of up to five years, benefits innovative drug firms but introduces uncertainties for generics.

Another significant challenge stems from the lack of specific methods for data exclusivity protection, making it difficult for companies to secure the regulatory benefit of clinical trial data.

To balance IP protection and market innovation, regulators have also intensified antitrust law enforcement in 2023, potentially influencing market players’ patent strategies.

3. How do market entry barriers, such as registration requirements and import/export regulations, impact foreign life sciences companies looking to do business in China?

In general, the foreign investment negative lists for market access delineate business sectors that are prohibited or restricted to foreign investments, which includes the development and application of human stem cells and genetic diagnosis and treatment technologies. Moreover, under China’s regulatory framework of HGR, exploitation of HGR by foreign or foreign-controlled entities (together ‘Foreign Parties’) is also highly restricted.

Separately, the current MAH system prevents foreign MAHs from engaging in local manufacturing through CMOs in China, and domestic Chinese MAHs cannot utilise overseas CMOs either. This may not align with the operational requirements of many foreign MAHs and would prevent foreign MAHs from adopting a more flexible and globally integrated manufacturing strategy, especially in case of a cross-border licensing arrangement.

4. What are the primary legal challenges associated with clinical trials and drug approvals in the Chinese life sciences market?

China has heightened regulatory scrutiny over cross-border data flow, impacting multinational clinical trial sponsors with investigational sites in China. Challenges include the need for a cross-border data assessment when sharing personal and health information, with potential requirements for approval or record-filing when a foreign party substantially
participates and HGR is involved.

Additionally, in clinical trials, strict compliance with obligations, including explicit recruitment procedures and patient consent, is essential. Interactions with HCPs must be approached carefully to ensure their independence.

Despite government efforts, the drug approval process remains complex, less predictable and time-consuming.

5. What is the role of data privacy and protection laws in the life sciences sector, especially in relation to patient data and research information?

Data privacy and protection laws play a pivotal role in China’s life sciences sector, particularly concerning the use and sharing of patient’s personal data and sensitive medical information.

The Personal Information Protection Law and clinical trial regulations stress the importance of obtaining informed consent from patients before collecting and using their personal information, as well as transparent communication with patients on use of their data and patient rights. The Data Security Law and related regulations impose requirements on the cross-border transfer of personal information and other important data (and the definition of ‘important data’ for the life sciences sector remains broad and unclear at this point).

6. How do Chinese laws and regulations address issues related to biosafety and bioethics, especially with respect to genetic research and biotechnology?

These issues are addressed by the Biosafety Law and regulations including the Administrative Regulations on Human Genetic Resources.

The Biosafety Law covers a wide variety of areas, from protection against bioterrorism and public health threats, to protection of human, animal and plant resources.

Under the HGR regulations, only entities controlled by Chinese entities and individuals (Chinese party) are permitted to collect, store and transmit overseas the Chinese HGR after completing approval/filing procedures. If a foreign party needs to utilise human biospecimens, it must apply for and complete appropriate approval/filing jointly with or through Chinese parties.

7. What are the key considerations for compliance with anti-corruption and bribery laws for life sciences companies in China?

According to our observation on the latest trends, including the anti-corruption regulatory campaign on the healthcare sector in mid-2023, life sciences companies should continue to consider improving their compliance system, such as: evaluating and improving internal compliance policies regarding anti-bribery and anti-corruption; providing compliance trainings to all employees and other third-party business partners that may get involved in the sales and marketing of medical products; and intensifying the implementation of their internal compliance monitoring system.

8. Can you discuss the legal landscape for pharmaceutical pricing and reimbursement policies in China and their impact on market access for life sciences products?

China basically adopts a market-driven mechanism for pricing, but the actual prices of most drugs are subject to national policies related to a national reimbursement system and organised hospital drug procurement.

China’s national basic medical insurance system has been evolved to cover more than 95% of the population in China and now provides reimbursement for nearly 3,000 medicines included in the National Drug Reimbursement List (NDRL). Once successfully listed in NDRL, the drug prices may be required to be significantly reduced.

Meanwhile, for public hospitals, drug procurement (especially for generic drugs) is notably influenced by a volume-based procurement programme, under which the government will directly negotiate on discounted drug supply prices based on promising bulk purchasing, significantly reducing the price.

9. How do trade secrets and technology transfer regulations affect collaborations and partnerships between Chinese and foreign life sciences companies?

Currently, international collaboration and partnerships in China have not been substantially affected by technology export controls. Issues related to technology transfer and trade secrets between Chinese and foreign parties are primarily addressed through contractual arrangements, including contracts with employees, business partners and other persons
who may have access to trade secrets.

10. Are there specific legal challenges or opportunities related to emerging fields within the life sciences, such as gene editing, regenerative medicine, or artificial intelligence applications in healthcare, in the Chinese market?

China has introduced a series of regulations aimed at addressing challenges emerging in various fields, encompassing ethical, data security, and biosecurity issues.

Companies involved in ethically sensitive domains, particularly in these emerging fields, are required to establish an internal science and technology ethics (review) committee. Also, regulations focusing on the appropriate use of data in artificial intelligence technologies are in the process of being developed. As mentioned above, there are restrictions on foreign investment in CGT therapy, and the government is clearly intensifying efforts for domestic replacements.

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China life sciences: transaction insights and notable industry trends

China’s life sciences and healthcare (LS&H) industry underwent an unprecedented transformation in 2023 consisting of numerous challenges and opportunities. Within this year, BD transactions primarily included out-licensing of ex-China rights, China commercialisation partnering, asset acquisition and regaining drug product rights, which reflected the courage of China’s LS&H market players to proactively seek changes and rebuild corporate strategies in a quickly shifting market landscape. Continue reading “China life sciences: transaction insights and notable industry trends”

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Perspectives: Grant Castle

Why did you decide to specialise in life sciences?

I have a science background – a PhD in organic chemistry – and worked for a short time as a medicinal chemist for Glaxo. I also had an interest in the humanities at school, so law had always seemed to be an option, and life sciences law made sense. I had assumed that I would go into IP/patents, but was lucky enough to meet a life sciences regulatory lawyer from Covington and spent some time there before my training contract. I came back to Covington on qualification and I am still here 25 years later. I clearly made the right choice.

What were the key challenges facing the sector when you started out, and what do you think they are now?

This is going to date me, but the biggest challenge facing the sector when I joined Covington was the pharmaceutical industry’s shift from small molecule drugs to biotechnology-derived medicines. While the core concepts of pharmaceutical regulation remained, the shift had significant practical implications for pretty much every aspect of drug development, approval, manufacture, supply and post-market safety monitoring and support. High-profile safety issues in early stage clinical trials and in the post-marketing context meant that regulators, companies and their advisers had to rethink the value of non-clinical research and refine the way they assessed the safety of medicines. They also had to find new ways of assessing the effect that even minor changes in the way biotech products are manufactured and formulated could have on product safety and efficacy.

What’s been the biggest change in the sector/in the role of a life sciences lawyer since you started out?

The increasing sophistication and personalisation of medicines is transforming the industry. Gone are the days when a pharmaceutical company would release one medicine to the market and return to focusing on developing new ones. New medicines now usually require the approval companion or complementary diagnostic tests, and companies are increasingly offering patient support services, including digital health solutions. That means that they are engaging much more closely with doctors, patients and health service providers. It is no longer enough for firms to be experts in pharmaceuticals; they also need to be experts in medical device and in vitro diagnostic medical device regulation; healthcare regulation; data protection and health data regulation; tech and AI regulation, as well as being sophisticated transactional and competition lawyers, etc. Not only do you need a strong team of lawyers to serve our clients’ needs, but you also need collaborative culture. Thankfully, we have that.

Would you recommend specialising in life sciences to junior lawyers, and why?

Absolutely. There have been times in my career where I have wondered what we will be doing once the world has moved on from the big issues of the time. I should never have worried because there have always been interesting challenges around the corner. You are never bored!

Grant Castle is a partner in Covington’s London, Brussels, and Dublin offices, practising in the areas of EU, UK, and Irish life sciences regulatory law.

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Healthy competition

The Legal 500’s life science and healthcare industry focus ranking was introduced three years ago to recognise firms with dedicated cross-practice teams advising high-profile clients across the sector.

However, its roots date back further back than that, in its previous incarnation as our pharma and biotech ranking. As such, our ranking contains a wide variety of firms, from patents and IP specialists such as Bristows and Powell Gilbert to transactional powerhouses such as Clifford Chance and Linklaters, with the highest ranked firms able to demonstrate close to a full-service offering to clients in the sector.

After the hectic covid years fuelled a surge in activity in the sector, life sciences and healthcare practices will be jockeying to secure their post-pandemic position in the market – and indeed The Legal 500 rankings.

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Q&A: PwC

1. What are the key regulatory bodies overseeing the banking and finance sector in Poland, and what is their role in ensuring compliance with financial laws and regulations?

The main supervisory body in Poland is the Polish Financial Supervisory Authority (‘Komisja Nadzoru Finansowego’ or ‘KNF’). KNF supervises the banking, capital, insurance and pension sectors, payment institutions and payment service offices, electronic money institutions and credit unions.

Moreover, KNF issues key positions regarding the functioning of the financial market. The important competences of the Polish Financial Supervision Authority include carrying out inspections of financial institutions and issuing recommendations.

2. How has the Polish banking sector evolved in terms of digital innovation, and what legal challenges or opportunities have arisen with the increasing adoption of fintech solutions?

The banking sector in Poland is considered one of the most digitised and innovative in the European Union1.

In recent years, the Polish banking sector has introduced plenty of solutions adopted on the basis of the new technology and regulations facilitating it (including, eg, cloud computing, AI, innovative online onboarding PIS and AIS services).

Generally, KNF actively supports the use of new technologies in the financial market, including in the field of crowdfunding or payment services2.

Most of the banking institutions can conclude a bank account agreement without the need to visit the bank’s premises or allow the client to verify its identity (ie for AML/CFT purposes) with the use of innovative technologies (eg with the use of video verification or biometric identification).

3. Can you provide an overview of the most recent developments in financial regulations related to consumer protection and how they impact banking practices in Poland?

In this regard, the Act of 16 August 2023 amending certain acts in connection with ensuring the development of the financial market and the protection of investors in this market was recently adopted.

One of the key changes introduced by the Act is the restriction of the sale of corporate bonds to retail customers outside the regulated market or alternative trading system and crowdfunding platforms.

As a rule, the Polish legal system put a special emphasis on the protection of consumers with regards to the use of financial products, which is expressed by, eg, a special interest of the KNF in mediation proceedings between banks and borrowers3.

4. What are the legal requirements and processes for establishing a foreign bank’s presence in Poland, and how have recent changes in foreign investment laws affected this?

A credit institution (EU-based licence) may conduct banking activities in Poland through a branch or as a part of its cross-border activities.

Activity of a credit institution on a cross-border basis can commence as soon as the KNF receives a relevant notification from the competent supervisory authorities of the home state, while conducting activities through a branch requires setting up a permanent presence in the territory of Poland as well as relevant notification.

In turn, the establishment of a branch of a foreign bank (outside EU-based licence) in the territory of Poland takes place on the basis of a permit of the KNF issued at the request of the bank concerned.

As a rule, the process of establishment of a foreign bank’s/credit institution’s presence in Poland is being carried out on the basis of the Polish Banking Act and executive regulations, which transpose the general obligations resulting from EU directives.

5. What legal frameworks govern the issuance and trading of financial instruments in the Polish capital markets, and how does Poland align with EU regulations in this regard?

As of now, the legal framework for the issuance and trading of financial instruments consists of:

  • Act of 21 July 2006 on supervision of the financial market;
  • Act of 29 July 2005 on capital market supervision;
  • Act of 29 July 2005 on trading in financial instruments;
  • Act of 29 July 2005 on public offering and the conditions for introducing financial instruments into the organised trading system of public companies.

6. How does Poland address anti-money laundering (AML) and know your customer (KYC) regulations in the financial sector, and what are the recent changes or trends in this area?

The current binding Polish AML regulations are the result of transposition of the EU AML IV-VI directives.

The legal framework of AML/CFT in Poland includes the Polish AML Act along with executive regulations, as well as the guidelines, positions and communications of the KNF and the General Inspector of Financial Information, which obligated institutions providing services in Poland (eg, credit institutions or brokerage houses) should take into account.

The last significant amendment to the AML Act was introduced in 2021. The Polish legislator is currently preparing to adapt the legal framework of AML/CFT in Poland to the incoming changes resulting from the AML Package, which is currently in draft state.

7. What is the current state of cryptocurrency and blockchain regulations in Poland, and how are these evolving to accommodate the growing interest in digital assets?

In Poland no comprehensive and specific regulations regarding crypto-assets and blockchain have been adopted yet. The Polish financial market is awaiting the entry into force of the provisions of the Markets in Crypto-Assets Regulation (MiCA).

The Polish legislator has currently included selected issues related to blockchain technology in national regulations.

For example, the provisions of the Polish Commercial Companies Code amended in 2021 enable joint-stock companies and simple joint-stock companies to maintain a register of shareholders in the form of a distributed and decentralised database.

In addition to the above, the Polish AML Act regulates the activities of suppliers in the field of virtual currencies, including the obligation to obtain an entry in the register of activities in the field of virtual currencies. Additionally, KNF has issued a number of communications mainly on explaining the nature and risks of crypto-assets.

8. Can you discuss the role of law firms in facilitating mergers and acquisitions within the Polish banking and finance sector, and what are the typical legal challenges faced in these transactions?

Polish law firms actively participate in M&A transactions on the financial market.

The role of the law firm in such transactions is crucial and it includes mainly structuring of the transaction and the transaction documentation taking into account the potential regulatory requirements (including in particular clearances from supervisory and/or competition authorities), support in obtaining of the required regulatory clearances and finally support in negotiations and subsequently handling post-transaction processes.

The main challenges related to M&A processes in the Polish financial market are the regulatory due diligences and the potential requirements to obtain permits from the KNF and President of the Office for Competition and Consumers’ Protection as well the need to meet regulatory requirements related to listed companies which has significant impact on the structure of the transaction and the timing thereof.

9. How has Poland adapted to recent European Union directives related to banking and finance, such as MiFID II and PSD2, and how have these directives impacted the market?

The implementation of the PSD2 in Poland, namely the Polish Act on Payment Services significantly increased users’ awareness of electronic payments.

Since the entry into the force of the said regulation (along with the number of executive regulations and KNF’s recommendations/positions), the rate of online fraud decreased, the protection of customers of financial institutions improved (including due to the implementation of SCA), and customers gained access to new, innovative open banking services (AIS or PIS).

The implementation of MIFID II in Poland in the form of the Act on Trading in Financial Instruments ensured more cohesive investor protection and increased the level of confidence in the financial markets, which was rather low due to the subprime mortgage crisis.

Transposition of MIFID II in Poland was also considered significant to the market participants mainly due to the increase in the obligations of distributors of financial instruments to improve the transparency of trading.

10. What are the legal considerations for financial dispute resolution and arbitration in Poland, and what options are available for businesses seeking to resolve financial disputes through legal channels?

In Poland, if the parties to a dispute so choose, a financial market dispute can be resolved out of court. Currently, alternative dispute resolution with regards to the so-called CHF loan cases is considered as one of the main financial market issues in Poland. KNF takes an active part in mediation in these cases.

There are three main ADR centres offering out-of-court dispute resolution in the financial market:

  • Arbitration Court at the PFSA;
  • Financial Ombudsman;
  • Bank Consumer Arbitration.

Footnotes

1. Many think tanks in the area of finance innovations are actively operating in Poland, such as FinTech Poland, which indicates a significant increase in interest in technology and modernisation of financial services
www.fintechpoland.com/future-finance-poland-in-a-few-years-poland-can-become-one-of-the-30-most-competitive-financial-centers-in-the-world/

2. KNF has recently launched the Innovation Hub Programme under which the supervisory body conducts a dialogue with FinTech companies www.knf.gov.pl/en/MARKET/Fintech/Innovation_Hub

3. www.knf.gov.pl/dla_rynku/sad_polubowny_przy_KNF/mediacje_dot_kredytow_denominowanych_lub_indeksowanych

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Q&A: Morgan Lewis

1. What are the key regulatory changes that have impacted the banking and finance legal market in the UAE in the past year?

In 2023, the United Arab Emirates (UAE) banking and finance legal market has witnessed significant regulatory changes that now effectively require that banks secure loans with tangible assets (in addition to, or even rather than, personal guarantees). This has implications for existing transactions, as personal guarantees alone may no longer suffice, potentially resulting in borrowers and guarantors attempting to challenge existing deals that are not secured by other assets. Banks must now adapt their lending practices to ensure compliance with these new regulations, considering a more focused approach to selecting suitable securities that facilitate enforcement, but at the same time avoiding over-collateralisation (which, as recent court practice suggests, may also be an issue).

Significant amendments have also been introduced to the UAE’s anti-money laundering (AML) regulations (see question 8 below for more detail) and in the ESG space (see question 9 below).

2. How does the UAE’s legal framework for banking and finance differ from other countries in the Middle East region?

The UAE is among the largest financial centres in the Middle East, and it is considered one of the most dynamic in the region – ranking third (after Qatar and Saudi Arabia) as per rankings in the Global Competitive Report issued by the World Economic Forum.

The UAE’s banking and finance legal framework stands out in the Middle East due to its unique offshore jurisdictions, such as the Dubai International Financial Centre (DIFC) or the Abu Dhabi Global Market (ADGM). These hubs establish their own civil and commercial laws, use English in court proceedings, and operate on a basis of common law principles that are tailored to the region’s needs through the laws of the respective free zones, offering a competitive edge. Additionally, the UAE actively collaborates with global legal practitioners and frequently hosts international legal events, distinguishing it from other Middle Eastern nations in fostering a diverse and vibrant legal landscape.

3. What are the primary challenges and opportunities for international law firms seeking to establish a presence in the UAE’s banking and finance legal market?

A primary challenge for an international law firm seeking to establish a presence in the UAE would be the entrenched relationships that existing law firms already have with the region’s premier institutional clients. Also, it may be difficult for an international firm intending to enter the UAE market to swiftly obtain sufficient regional expertise to be able to advise on local law matters. Many international law firms have had a presence in the UAE for multiple decades, and a proliferation in the number of firms operating in the UAE over a period of time has caused significant competition among firms to keep fees competitive in order to win the work from clients.

Despite these challenges, the UAE remains an exciting jurisdiction, particularly as a focus on ESG grows globally and in the region. The annual sustainability report of the Central Bank of the UAE (CBUAE) indicates that ESG financing has gained traction in the UAE, with ESG financing debt issuances accounting for 18.2% of total bond issuances during 2022. Furthermore, the UAE hosted COP28 in 2023, which will place a greater emphasis on ESG financing and potentially lead to more ESG financing opportunities.

4. Can you explain the recent trends in Islamic finance and how they affect the legal landscape in the UAE?

The general trend in the Islamic finance market in the UAE is that Shariah standards become stricter and market participants are forced to adapt. A recent example of this is the adoption of Shariah standard No. 59 regarding the sale of debt (Standard 59) issued by the Accounting and Auditing Organisation for Islamic Financial Institutions by the UAE. Prior to the issuance of Standard 59, it was market standard for parties to ‘roll over’ a murabaha agreement, meaning that if one murabaha agreement was due to expire on a particular date, a new murabaha agreement would be entered into on that date to replace it.

Since the issuance of Standard 59, a murabaha agreement cannot be directly refinanced by another murabaha agreement, and stakeholders have had to invent ways to ensure that the murabaha arrangements remain Shariah-compliant. One way has been based on a literal interpretation of Standard 59, which suggests that a new murabaha agreement can be used to repay existing debt one business day after the borrower has received funds from the new murabaha agreement. It has become increasingly common that, instead of entering into a new murabaha agreement on the day that the existing one would be due to expire, the parties would enter into a new murabaha agreement one day before the proposed expiry of the existing murabaha agreement.

5. What are the key legal considerations for foreign investors looking to enter the UAE’s banking and finance sector?

Foreign investors should be aware that Federal Decree Law No. 14 of 2018 requires that financial institutions that provide lending services obtain a licence from the CBUAE before engaging in lending activities. It should also be noted that Cabinet Resolution 55 of 2021 (Resolution 55) lists the banking sector as one that requires the approval of the CBUAE in relation to the shareholding of a financial institution that is incorporated onshore in the UAE. However, if foreign investors intend that the activities of the financial institution they wish to incorporate would be limited to operations within a financial free zone (such as the DIFC or the ADGM), such investors may choose to incorporate the financial institution in such financial free zone (which allows 100% foreign ownership without the specific permission from the CBUAE pursuant to Resolution 55). However, it should be noted that operating a financial institution in a free zone will require compliance with the regulations issued by the Dubai Financial Services Authority (DFSA) in the case of the DIFC and the Financial Services Regulation Authority (FSRA) in the case of the ADGM, including potential licensing requirements if the company conducts lending activities.

6. How has the introduction of new fintech regulations influenced the legal services demand in the UAE’s financial sector?

The introduction of new fintech regulations in the UAE has significantly elevated the demand for legal services in the financial sector. Open banking, digital currency, and cryptocurrency licensing are in focus. For instance, the UAE’s Securities and Commodities Authority is now accepting licensing applications for crypto services, which has spurred the need for legal expertise in compliance and regulatory matters. This change reflects the broader shift towards digitalisation and the government’s commitment to fostering innovation. As fintech continues to evolve in the UAE, legal services play a vital role in helping financial institutions navigate these intricate regulatory landscapes.

7. What are the most common dispute resolution mechanisms used in banking and finance cases in the UAE, and how have they evolved over the years?

Historically, banks and financial institutions in the UAE had a tendency to prefer litigation for resolving disputes. However, following the introduction of independent arbitral frameworks in the DIFC (introduced in 2008 and amended in 2013) and the ADGM (introduced in 2015 and amended in 2020), as well as a standalone federal arbitration law in the mainland UAE (introduced in 2018 and amended in 2023), there has been an increasing trend towards arbitration. These changes have brought the UAE, both mainland and offshore, in line with international arbitration standards by harmonising the legislation with the UNCITRAL Model Law on International Commercial Arbitration.

In terms of arbitral institutions, following the Dubai Government’s Decree 34 of 2021, the DIFC-LCIA Arbitration Centre was consolidated under the Dubai International Arbitration Centre (DIAC). Other notable arbitral institutions in the UAE include the International Chamber of Commerce (ICC), which has a case management office in the ADGM, and the Saudi Center for Commercial Arbitration (SCCA), which has recently opened a regional office in the DIFC. Additionally, many parties also choose the London Court of International Arbitration (LCIA). It is also worth noting that the UAE hosts the International Islamic Centre for Reconciliation and Arbitration (IICRA), a specialised institution for the Islamic banking, financial, and commercial disputes.

Other mechanisms banks and financial institutions have considered, especially in project financing, include the use of expert determination. Additionally, where Islamic financing is concerned, the use of arbitration may provide a mechanism for issues pertaining to Islamic principles to be referred to a Shariah body, board, or council.

8. What are the current anti-money laundering and anti-corruption compliance requirements that financial institutions must adhere to in the UAE?

The CBUAE has intensified its focus on its AML and counter-terrorism financing (CTF) efforts since a critical 2020 evaluation report, imposing sanctions on non-compliant entities. Recent developments include the CBUAE’s guidance endorsing digital identification systems for AML/CTF compliance. The UAE is modernising its AML/CTF framework, emphasising digital solutions and effective AML screening software.

In June 2023, new AML guidelines for crypto businesses were introduced, applicable to licensed financial institutions. Future changes target the Financial Action Task Force’s 2024 review, aiming to enhance AML and CTF efforts to exit the grey list. Key AML compliance obligations encompass risk assessment, customer due diligence, compliance officer appointment, risk-based policies, suspicious transaction monitoring, and record-keeping requirements.

9. How does the UAE’s legal framework support sustainable finance initiatives, and what opportunities does this create for law firms specialising in environmental, social, and governance (ESG) matters?

The UAE’s legal framework fosters sustainable finance through the introduction of designations like ‘Green’, ‘Climate Transition’, and ‘Sustainability Linked’. These designations, issued by the FSRA, outline the criteria for environmental sustainability, allowing financial products to opt in voluntarily. The FSRA aims to establish a standard for green-labelled financial products, offering transparency to investors. Mandatory ESG disclosures and alignment with international taxonomies further promote sustainable finance. Law firms specialising in ESG matters can seize opportunities in assisting clients with compliance, attestation, and navigating this evolving landscape, ensuring alignment with the UAE’s minimum standards and boosting financing towards a net-zero future.

10. Can you provide insights into the legal implications and challenges surrounding cross-border transactions in the UAE’s banking and finance sector, particularly in the context of international sanctions and trade restrictions?

Cross-border transactions in the UAE’s banking and finance sector pose complex legal implications and challenges, especially concerning international sanctions and trade restrictions. The UAE adheres to United Nations sanctions on an ad-hoc basis, implemented through internal directives, affecting nations like Iran, North Korea, and Somalia. Recent international sanctions on UAE-registered entities for supporting Russia underscore the increasing pressure that the UAE faces from the United States, United Kingdom, and European Union to curtail trade with Russia. Despite these challenges, trade between the UAE and Russia has surged, indicating the intricate balancing act that banks and financial institutions must navigate, ensuring compliance with sanctions while engaging in profitable cross-border transactions.

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Q&A: EP Legal

1. What are the key regulatory developments in Vietnam’s banking and finance sector over the past year, and how have they impacted the legal landscape?

Key regulations and their impacts include:

Circular No. 06/20231: promotes digital transformation in the banking sector; enhances access to bank credit for clients; and allows borrowers to repay loans in a different currency.

Circular No. 08/20232: permits depositing unused foreign loans for deposit interest, which offers an option to offset loan costs.

State Bank of Vietnam (SBV)’s measures for post-Covid-19 recovery: provides liquidity and headroom for credit institutions; manages interest rates effectively3; restructures repayment terms and maintains loan categories4; implements specialised credit programmes from the government and various banks; streamlines administrative procedures5; and enhances connectivity between banks and enterprises through a 2% interest rate support policy from the state budget6.

2. Can you provide an overview of the licensing and compliance requirements for foreign banks and financial institutions operating in Vietnam?

The establishment of wholly foreign-owned and joint ventures must satisfy:

  1. Requirements similar to a local financial institution (legal capital, shareholder’s financial capacity, charter, management board, establishment plan and a feasible business plan).
  2. Foreign financial institution’s compliance with the laws of its country.
  3. Foreign financial institution’s financial health compliance with the SBV’s regulations.
  4. Foreign financial institution’s commitments of the established institution’s operation in Vietnam.

e. Agreements between foreign competent authorities and the SBV on the inspection and oversight of foreign financial institutions’ operations7.
For establishment of representative offices: A foreign financial institution must be permitted by the laws of its country do so8.
The establishment of branches is similar to a financial institution but excludes the need for a charter9.

Regarding compliance requirements, foreign banks and financial institutions operating in Vietnam must comply with money laundering prevention10, electronic transactions11, risk management12, financial reporting, auditing13, and safeguarding consumer rights14.

3. What are the typical legal challenges faced by multinational banks and financial companies when establishing and maintaining a presence in Vietnam?

When establishing and maintaining a presence in Vietnam, multinational banks and financial companies face legal challenges, including (i) regulatory compliance: multinational financial institutions must comply with local laws related to banking, finance, and foreign investment; (ii) ownership restrictions: Vietnam imposes foreign ownership limits on certain financial institutions15; (iii) minimum capital requirements: foreign banks and financial companies must have sufficient legal capital to their Vietnamese entity16; and (iv) corporate governance: managers, executives and control board members must meet Vietnamese laws17; and other challenges such as currency controls, data protection and privacy, and taxation.

4. How has Vietnam’s legal framework evolved to accommodate the growth of fintech and digital banking, and what are the implications for foreign investors in this sector?

Vietnam’s fintech activities are governed by: Law on Information Technology 2006; Law on High Technology 2008; Law on Cyber Information Security 2015; Law on Cybersecurity 2018; Decision 2545/QD-TTg dated 30 December 2016 on the scheme of non-cash payments; Decision 1255/QD-TTg dated 21 August 2017 on management of virtual assets, digital currencies and virtual currencies; Decree 19/2023/ND-CP on anti-money laundering; and Decree 13/2023/ND-CP on Personal Data Protection.

Foreign investors may face various and complicated laws, decrees and circulars, especially in acquiring the licence to establish a fintech business. Nonetheless, foreign investors can still benefit from the growing Vietnamese market, possessing the pace of technology development.

5. What are the current trends and best practices in dispute resolution within the banking and finance sector in Vietnam?

Litigation in Vietnam can be complicated, time consuming and lacks confidentiality. Meanwhile, arbitration is a current growing trend. In 2018, VIAC18 handled 180 cases, 4% of which were related to banking and finance19. In 2020, VIAC received 221 cases with 2% of them related to disputes in the finance sector20. In 2022, the number increased to 292 new cases, 10.4% of which were finance and banking disputes21. Additionally, mediation is also a growing ADR22 in Vietnam. In 2022, VMC23 received 12 new cases with a result of 100% successful settlements reached24. While banking and finance cases are fewer than in other sectors, mediation remains a viable ADR option.

6. Can you explain the regulatory framework and legal considerations surrounding mergers and acquisitions (M&A) in the Vietnamese banking and finance industry?

An M&A deal in the banking and finance sector is regulated by several laws. The Credit Institutions Law 2010 specifically governs the establishment, organisation, and operation of credit institutions in Vietnam25. The Investment Law 2020 and the Enterprise Law 2020 govern the requirements and formalities for the M&A of all enterprises incorporated in Vietnam. Moreover, public companies in Vietnam shall be regulated by the Securities Law 2019 while all companies must comply with the Competition Law 2018 to avoid the economic concentration during the M&A process26.

7. What are the key anti-money laundering (AML) and counter-terrorism financing (CTF) regulations in Vietnam, and how are they enforced by authorities?

The Law on Money Laundering 2022 is the main legal ground on money laundering and financing of terrorism, read together with Decree No. 19/202327 and Circular 09/202328.

Money laundering is a crime under Criminal Code 201529, while CTF is regulated under the Anti-Terrorism Law 201330.

AML and CTF are enforced as follows:

  1. SBV develops plans and legislative documents;
  2. SBV, financial institutions and other entities are required by the law to perform preventative measures;
  3. SBV, Ministry of Public Security and other ministries conduct inspections, investigations with international co-operation; and
  4. prosecution and trial by the People’s Procuracies and the People’s Courts.

8. How has the Vietnamese government addressed environmental, social, and governance (ESG) issues within the banking and finance sector, and what legal requirements are in place for sustainable finance initiatives?

On environment: (a) the Environmental Protection Law 2022 grants green credit31 and regulates the issuance of green bonds32 to projects that are beneficial to the environment; (b) the offering of green bonds must comply with Decree No. 153/202033; and (c) Circular No. 17/2022 on environmental risk management for credit institutions and foreign bank branches34.

On social: (a) the Labour Code 2019 combats discrimination, inequality, poor working condition and sexual harassment; and (b) Decree No. 13/2023 on customer data protection35.

On governance: (a) Anti-corruption Law 2018; (b) Circular No. 96/2020/TT-BTC on disclosure of information on the securities market; (c) Enterprises Law 2020 on the structure of board of directors of companies; and (d) CVGCBP36 (by the State Securities Commission) and the Vietnam Sustainability Index which recognise ESG practices.

9. What are the recent developments in cryptocurrency and blockchain regulation in Vietnam, and how are they affecting financial institutions and investors?

Vietnamese laws do not regulate cryptocurrencies and the SBV prohibits their use for payments. Consequently, financial institutions in Vietnam cannot engage in cryptocurrency transactions, and investors using cryptocurrencies may lack legal protection, risking administrative fines or criminal penalties.

The recent legal developments on this topic are:

a. Decision 1255/QĐ-TTg: the Vietnamese Prime Minister approved a plan for relevant authorities to review, assess, and amend existing laws, proposing new legislative documents regarding virtual assets and currencies; and

b. On 15 June 2021, the Prime Minister assigned the SBV to research, develop, and pilot the use of virtual currency based on blockchain technology, reflecting Vietnam’s trend toward internationally integrated and regulated use of virtual currencies.

10. Can you provide insights into the future prospects and potential legal challenges for the banking and finance legal market in Vietnam, considering both domestic and international factors?

The banking and finance legal market in Vietnam is developing, despite encountering several challenges, particularly:

  1. The issues related to data privacy and cyber security. Legal experts will be essential in ensuring compliance with data protection laws and balancing data utilisation with safeguarding clients’ information.
  2. To promote access to credit capital for businesses, the SBV has implemented various measures to substantially increase cross-border facility transactions. This circumstance creates a heightened demand for legal services within the sector.
  3. Banking and finance transactions often involve complex contracts and agreements often resulting in disputes due to contract breaches.

Notes

1. Circular No. 06/2023/TT-NHNN dated 28/06/2023
2. Circular No. 08/2023/TT-NHNN dated 30/06/2023
3. Circular 22/2019/TT-NHH dated 15/11/2019
4. Circular 02/2023/TT-NHNN dated 23/04/2023
5. Circular 06/2023/TT-NHNN dated 28/06/2023
6. Decree 31/2022/ND-CP dated 20/05/2022
7. Law on Credit Institutions 2010 (LCI 2010), Article 20.2.LCI 2010, Article 20.4
8. LCI 2010, Article 20.4.
9. LCI 2010, Article 20.3.
10. Law on Anti-Money Laundering No. 14/2022/QH15 dated 15 November 2022
11. Decree No. 165/2018/ND-CP dated 24 December 2018
12. Circular No.13/2018/TT-NHNN dated 18 May 2018
13. Circular No.24/2021/TT-NHNN dated 31 December 2021
14. Decree No. 117/2018/ND-CP dated 11 September 2018
15. Decree No.01/2014/ND-CP dated 03 January 2019, Article 7
16. Decree No.86/2019/ND-CP dated 14 November 2019, Article 2
17. LCI 2010, Article 50
18. VIAC: Vietnam International Arbitration Center
19. Vietnam International Arbitration Centre, ‘2018 Statistics’ (2018) www.viac.vn/images/annual%20reports/Annual-report-2018.pdf
20. Vietnam International Arbitration Centre, ‘2020 Statistics’ (2020) www.viac.vn/en/statistics/2020-statistics-s37.html
21. Vietnam International Arbitration Centre, ‘2022 Statistics’ (2022) www.viac.vn/en/statistics/2022-stattistic-s41.html
22. ADR: alternative dispute resolution
23. VMC: Vietnam Mediation Center
24. Vietnam Mediation Center, ‘Annual Report 2022’ (2022) vmc.org.vn/images/Resources/Annual-Report/2022/VIAC_Bao-cao-thuong-nien-2022_230810.pdf
25. Law on Credit Institutions 2010, Article 153: Credit institutions may be reorganized by split-up, division, consolidation, merger or transformation must obtain SBV’s approval and obtain licensing requirements.
26. Law on Competition 2018, Article 30
17. Decree No. 19/2023/ND-CP dated 28/4/2023
28. Circular 09/2023/TT-NHNN dated 28/7/2023
29. Criminal Code 2015, Article 324
30. Anti-Terrorism Law 2013, Chapter V
31. Law on Environmental Protection 2022, Article 149
32. Law on Environmental Protection 2022, Article 150
33. Decree No. 153/2020/ND-CP dated 31/12/2020
34. Circular No. 17/2022/TT-NHNN dated 23/12/2022
35. Decree No. 13/2023/ND-CP dated 17/04/2023
36. CVGCBP: Vietnam Corporate Governance Code of Best Practices

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Q&A: SJL Jimenez Lunz

1. What are the key regulatory bodies and laws that govern the banking and finance industry in Luxembourg, and how do they impact financial institutions?

The Luxembourg finance industry is mainly overseen by two regulatory bodies: the CSSF supervises the financial sector, while the CAA oversees the insurance sector. A merger control is currently being introduced through the Conseil de la Concurrence. The Luxembourg Central Bank manages financial stability and monetary policy, liaising closely with the European Central Bank (ECB) and the International Monetary Fund. Key legislations include the law of 5 April 1993 on the financial sector (LSF), which incorporates EU directives and sets professional, prudential, and conduct standards for financial entities. Separate laws govern banks issuing covered bonds (law of 8 December 2021) and insurance undertakings (law of 7 December 2015). Other significant laws touch on annual accounts, payment services, and the failure of credit institutions.

2. Can you explain the process and requirements for obtaining a banking licence in Luxembourg? Are there any recent changes or developments in this area?

The CSSF collaborates with the ECB to oversee credit institution authorisation in Luxembourg. As per the Law of 5 April 1993, to acquire a banking licence, entities start with prior authorisation, then apply for a licence delivered by the Luxembourg Finance Ministry, entailing CSSF and ECB approval. The process lasts one to two years, excluding preparation. The application includes professional credentials, establishment rationale, proof of share capital, and details on infrastructure.

3. What are the common legal challenges that international financial institutions face when establishing operations in Luxembourg, and how do you help clients navigate these challenges?

Luxembourg’s dynamic financial landscape is guided by its evolving national and European regulatory frameworks, with the LSF being a cornerstone. Financial institutions must heed constantly updated Grand Ducal regulations and CSSF circulars. Primary financial entities include banks, investment firms, and insurance institutions. Operating from Luxembourg without necessary authorisation in Luxembourg is illegal unless with a EU passport. Initial decisions involve choosing the institution type and legal structure, with most opting for public limited companies. Despite Luxembourg’s stature as a financial hub, there’s a talent crunch, particularly in compliance roles, due to its size and intense demand. Fortunately, nearby regions, especially Belgium, France, and Germany, supplement this workforce demand. Foreign entities from the European Economic Area (EEA) can operate in Luxembourg following EU legislation. Applicants must disclose shareholder details; different ownership rules apply depending on the institution type. Engaging with authorities like the CSSF and CAA can be challenging for newcomers, which is why SJL’s and its partners’ reputation and experience greatly facilitates communication and information exchange with the regulators and competent ministries.

4. How does Luxembourg’s legal framework support the establishment and administration of investment funds, and what types of funds are most commonly used in the jurisdiction?

Luxembourg, the world’s second-largest funds venue, continuously modernises its investment fund legislation to remain attractive. The most prevalent in the fund industry are alternative investment funds, especially the reserved alternative investment funds (RAIFs), whose popularity has surged since the Luxembourg law of 23 July 2016. RAIFs often opt for the special limited partnership structure due to its contractual freedom. Other notable fund structures are the Specialised Investment Fund, Part II UCI, and Investment Company in Risk Capital, all regulated. Alternative funds face fewer stringent rules than retail funds like UCITS, enhancing their appeal. The Luxembourg law of 21 July 2023 introduced significant updates, including an extended timeframe for meeting capital requirements, refining the well-informed investors definition, and modernising subscription tax regimes and investment mandates.

5. Can you provide insights into the tax implications for foreign investors and financial institutions operating in Luxembourg, especially in the context of cross-border transactions?

In Luxembourg, financial institutions are taxed similarly to other corporations, encompassing corporate income tax and municipal tax (for institutions in Luxembourg-City). They are also liable for value added tax (VAT) and must register with the VAT-specific Luxembourg administration, AED. Notably, Luxembourg boasts a vast network of 86 double taxation treaties, many incorporating the OECD’s article 26.5, promoting information exchange between tax authorities. As an EU member, Luxembourg adheres to EU Regulations 1408/71 and 883/2004, streamlining social security coordination. Additionally, the country has 41 bilateral social security agreements in place.

6. Are there any recent legal or regulatory developments related to sustainable finance, green bonds, or environmental, social, and governance (ESG) investments in Luxembourg?

Luxembourg consistently updates legislation to stay at the forefront of renewable energy finance, highlighted by the first Green Bond issuance in 2007. In 2015, the Climate Finance Task Force was launched, focusing on sustainable finance initiatives. The Luxembourg Stock Exchange introduced the Luxembourg Green Exchange in 2016, leading in green bond listings. The Luxembourg Sustainable Finance Initiative was initiated in 2020. As of 27 June 2023, the European Commission expanded the list of climate change-contributing activities. Luxembourg’s finance industry aligns with UN’s 2030 Sustainable Development Goals, the EU’s 2050 environmental objectives, and various EU regulations like SFDR and Taxonomy Regulation. The CSSF oversees and ensures compliance, supported by frequent FAQs. Recent changes, notably the amended European long-term investment fund regime (ELTIF 2), provide additional flexibility and diverse structuring opportunities for investors.

7. What role does Luxembourg play in cross-border financial transactions and international finance, and how does your expertise assist in these areas?

Luxembourg, with its ‘AAA’ credit rating, is renowned for political stability, robust public finances, and economic resilience. As the world’s second-largest domicile for investment fund assets, housing over $6tn, it became a financial behemoth, especially after the growth of cross-border funds since the 1990s. Its regulatory clarity, tax benefits, and expertise position Luxembourg also as a pivotal hub in the debt funds sector. Chinese banks have increasingly chosen Luxembourg for their European headquarters, valuing its strategic gateway to Europe. Moreover, post-Brexit, global banks like Citibank and HSBC increased their presence by establishing their EU private banking headquarters.

SJL offers clients legal expertise in navigating the complexities of cross-border finance, from fund creation to liquidation, highlighting also Luxembourg’s advantages for international M&A and secured lending.

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Q&A: Deloitte

1. What are the key regulatory requirements and compliance challenges that law firms operating in Uruguay’s banking and finance sector currently face?

Capital Markets Act No 18.627 enacts the framework for companies operating in the Uruguayan Capital Market (issuers, brokers, investment advisers, etc); Law No 15.322 regulates the same for banks and all relevant entities acting as financial intermediators; Law No 16.426 regulates insurance and reinsurance framework (as well as Law No 19.678 that sets certain terms and conditions that shall be stipulated in the insurance agreements/policies); Laws No 16.713 regulates the Pension Funds Administrators (law that has been recently modified by Law No 20.130, that modified the Uruguayan pension regime); Law 16.774 rules mutual funds; and Law 19.210 and 18.573 regulates the payment system.

Moreover, the Central Bank of Uruguay (CBU)’s Organic Act sanctioned under Law No 16.696 sets out the organisation structure of the regulator of the financial industry (note that in the near future, Pension Funds Administrators will be regulated by a new authority).

Lastly, each licence granted by the CBU has its own legal framework which includes, depending on the type of licence, the need to request prior authorisation from the executive branch and/or the CBU, requirements regarding corporate governance, senior personnel, the constitution of guarantees, IT, AML, outsourcing restrictions, among others. Such framework is comprised into several ‘recompilations’ which are issued by the CBU in its capacity of regulator of the whole financial industry.

CBU is constantly issuing new regulations and rules, requiring the constant attention of legal advisers to regulatory changes.

All of the above (in addition to regulatory decrees of the executive branch) evidence that the financial industry is a highly regulated industry (of course that the degree of compliance requirements vary depending on the type of licence), and the challenges of law firms lies in staying updated on regulatory changes, regulator criteria, and aligning clients’ initiatives and operations with regulatory requirements.

Further, CBU’s latest practice includes consulting stakeholders and the public in general on normative projects, and law firms should be proactive in making contributions and suggestions.

2. Can you provide insights into recent developments or changes in banking and finance laws and regulations in Uruguay that may impact legal services in this sector?

Crypto assets are rapidly changing the financial ecosystem across the globe. Even though Latin America is still some steps behind from other jurisdictions, these assets awake strong interest among the financial operators.

Notwithstanding this, virtual assets that play a similar role to securities or shares (ie, security tokens and some utility tokens) raise several concerns from a regulatory perspective. In Uruguay, the CBU issued a regulatory framework for security crypto assets and, in 2022, the regulator sent a bill to the legislative branch to regulate those security virtual assets that fall into the regulatory perimeter of the CBU. Such bill is still in discussion in the Uruguayan Parliament.

Furthermore, recent Law No 20.130 modified the Uruguayan pension regime, introducing certain changers to the Pension Funds Administrators legal framework, which includes a new regulator, the creation of a third fund, changes in the investment regime, etc.

3. How do law firms in Uruguay assist international clients in navigating cross-border transactions and investments within the banking and finance industry?

Despite Uruguay being an attractive country to invest and do business in, in some cases international clients will seek advice to operate in Uruguay with the minimum physical presence within the territory.

Hence, when giving assertive legal advice, local input from seasoned legal professionals is crucial in balancing the client’s interest with local requirements and the CBU’s expectations; considering the elements that trigger the need to establish in Uruguay as a branch or subsidiary of the foreign company and the need to require a determined licence.

Furthermore, privacy rules shall also be considered, especially when targeting from abroad Uruguayan prospects.

Cross-border transactions always involve the application of conflict of law rules, some that have been recently modified by Law No 19.920. The possibility to choose the applicable law and competent jurisdiction is something relevant to consider in all international transactions, as well as the possibility to enforce a foreign judgment or arbitral award.

4. What are the typical legal services offered by law firms in Uruguay to financial institutions, including banks, credit unions, and investment firms?

Law firms with a solid track record in the financial industry offer a wide range of services. Ordinary legal services usually comprehend on-going regulatory advice and assisting the client before the CBU with information requirements, updates of company and business information, among others.

Besides from this, frequent legal input encompasses the assistance to the client with the regulatory requirements to obtain a licence before the CBU. Moreover, law firms advising in financial services usually assume a key role in the issuance of public offerings within the national capital market.

5. How has the adoption of fintech and digital banking technologies affected the legal landscape for banking and finance in Uruguay, and how are law firms adapting to these changes?

The fintech ecosystem in Uruguay follows the positive trend of innovation that is currently facing Latin America. Consequently, there is an increasing number of M&A transactions, as well as requests for legal input, that directly or indirectly relate to the fintech ecosystem.

Under this frame, it has been challenging for some traditional legal services providers to follow the industry rationale as well as the specific knowledge and culture that encompass the technology environments.

Besides, the fintech industry is an attractive ecosystem for legal services as there are regulatory requirements to be met, being particularly relevant the experienced legal input.

6. Are there any notable trends in dispute resolution and litigation related to banking and finance matters in Uruguay that law firms are actively involved in?

Issues that generate complaints or the application of sanctions by the CBU are typically related to breaches of consumer protection, investor protection, and anti-money laundering rules.

7. What are the key considerations for foreign investors looking to enter the Uruguayan banking and finance market, and how can legal counsel assist them in this process?

Legal counsel can assist foreign investors in all the relevant matters, from entity formation, legal regulatory advice to the specific filing procedure before the CBU.

As we mentioned above, landing in Uruguay may be significantly smoother if a seasoned legal counsel enters the discussion. Consequently, the absence of legal input or by a counsel not fully interiorised in the financial law sector could harm or delay the project.

8. Can you provide insights into the role of environmental, social, and governance (ESG) factors in banking and finance legal services in Uruguay and any associated legal requirements?

There is an increasing interest on ESG investing, and Uruguay is giving steps towards that aim.

This year, Uruguay had issued sovereign sustainability-linked bonds (SSLB), which are Uruguayan debt linked with relevant climate and nature targets regulated under the Paris Agreement.

Besides this, aligned with the government priority for clean energy, there have been several project financings involving wind and solar farms, and more recently involving green hydrogen.

9. What are the primary challenges law firms face when assisting clients with regulatory compliance in Uruguay’s banking and finance sector, and how do they address these challenges?

Assisting customers in achieving regulatory compliance within Uruguay’s banking and finance sector can be demanding. This is due to the continually changing regulatory landscape and cross-border regulations, which lead to various obstacles for law firms.

It can be challenging to keep up with the latest regulations and keep customers informed, while still maintaining cost-effective services. Law firms tackle these challenges by ensuring customers comprehend the essentiality of compliance and being proactive about informing them of any changes to the rules.

10. Are there any specific opportunities or areas of growth that law firms in Uruguay are currently exploring within the banking and finance legal market?

As the fintech industry is a rapid-changing environment, considerable opportunities for law firms to gain market share within the new players are constantly arising.

In this sense, traditional finance clients are buying emerging fintech startups to position in this new relevant market, and there is a thriving and mature fintech ecosystem whereas entrepreneurs are launching new projects and endeavours.

Hence, law firms should capitalise this opportunity both with the new and arising firms but also with traditional finance clients.