Financial Institutions and Markets (J)

Financial Institutions and Markets (J)

Authors: R. Lance Boldrey, Brenna E. McGee, Richard Y. Cheng

Coauthored by Dykema Summer Associate Shaun Sullivan-Towler.

For financial institutions interested in banking state-legal marijuana businesses, 2018 has been a rollercoaster. In January, Attorney General Jeff Sessions rescinded the Obama-era policy of lenient federal enforcement, creating new confusion for banks and credit unions about the future of marijuana-related banking. Many feared that the Financial Crimes Enforcement Network (FinCEN) would withdraw or amend its guidance as well, thereby eliminating the only federal guidance directed to financial institutions on banking marijuana businesses. But FinCEN has since been clear that its guidance remains in place and announced that, as of March 31, 2018, a total of 411 banks and credit unions now provide services to marijuana-related businesses, up from 365 a year ago.

Read more: The STATES Act, Rooted in Federalism, Would Address Systemic Risk in Cannabis-Related Banking

Bank Indonesia (“BI”) has issued the newest regulation on Electronic Money (“E-Money”), i.e. Bank Indonesia Regulation No. 20/6/PBI/2018 on Electronic Money (“PBI 20/2018”).

PBI 20/2018 fully replaced the previous regulations on E-money, which are Bank Indonesia Regulation No.11/12/PBI/2009 and its amendments (“Previous Regulations”). By issuing PBI 20/2018, BI aims to adjust the technological developments related to financial matters by regulating several additional requirements and obligations which were not regulated in the Previous Regulations.

Regulation No. 20/2018 introduces several key changes by setting up the provisions mentioned as below:

1. Classifications of E-Money;

2. E-Money Operators;

3. E-Money Issuers;

4. Organization of E-Money;

5. Unification, merging, segregation and takeover of E-Money administrators;

6. Reporting and supervision; and

7. Sanctions.

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Author: Nezihe Boran Demir

The Law Amending Certain Tax Laws and Certain Other Laws under law no. 7061 ("Omnibus Law") published in the Official Gazette dated 5 December 2017 and numbered 30261, has the purpose to amend the tax legislation alongside the other legislation, such as Capital Markets Law No. 63621 ("Capital Markets Law"). With the amendments to the Capital Markets Law, crowdfunding has been legally accepted. Respective provisions regarding crowdfunding are entered into force as of publication of the Omnibus Law. As previously mentioned within the article named the Draft Law on Crowdfunding2, by the enactment of the provisions of crowdfunding, the legislator has aimed to achieve to keep the crowdfunding platforms in a free market, simultaneously bringing about protection mechanisms. This article will mainly focus on the innovations introduced under the Capital Markets Law with respect to crowdfunding.

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Pursuant to Article 39 of Capital Markets Law numbered 63621 ("CML"), "It is mandatory to obtain permission from the Authority for performance of investment services and activities as a regular occupation, business or a professional activity...Persons and institutions not meeting conditions as foreseen under this Law, and have not obtained the permission of the Board, cannot carry out investment services and activities, even if they have been authorized according to their special laws." Accordingly, performance of investment services requires specific authorization to be obtained from the Capital Markets Authority ("Authority") for each service. Authorization certificates may contain one or more investment services. The investment services as foreseen under the CML are as follows:

Read more: Activities of Foreign Investment Institutions in Turkey

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In financing transactions, creditors, especially commercial banks, aim for repayment of loans through the smoothest manner possible. In order to secure the extended loan amount, creditors obtain security packages generally from borrowers, their shareholders or group companies to secure the extended loan amount. Within the security package, it is the intention of the lenders to receive securities that are time and cost efficient at the time of enforcement or foreclosure. Bank letters of credit are one of the most preferred securities, which include undertakings to pay the given amount without the need to conduct any further proceedings. This Newsletter will mainly focus on the definition and the legal nature of bank letters of credit, validity requirements, and validity formalities and, finally, a general overview to the types of bank letters of credit, in practice.

Read more: Bank Letters of Credit in Turkey