Client Newsletter Spring 2010 - Banking and Capital Markets

Profession:Dillon Eustace
 
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In this issue:- Life Settlements: Using Irish Investments Vehicles to minimise US taxes on Life Settlement Payments Financial Regulator publishes Consultation Paper on new corporate governance standards for banks and insurers Financial Regulator announces transition of prospectus scrutiny function Eurosystem launches preparatory work on the establishment of loan-level information for ABSs in its collateral system ECB introduces graduated valuation haircuts for lower-rated assets in its collateral framework and confirms its amendments to eligible collateral criteria STEP Market Committee introduces new fees for programmes with a STEP Label LIFE SETTLEMENTS: USING IRISH INVESTMENT VEHICLES TO MINIMISE US TAXES ON LIFE SETTLEMENT PAYMENTS We continue to see life settlements (in particular, relating to life policies insured on US citizens residing in the US) as an increasingly popular asset class. As a result of a US ruling issued by the Internal Revenue Service (Revenue Ruling 2009-14) on 1 May, 2009, there now exists potentially negative US tax consequences for non-US investors who acquire life policies and receive death benefits from a US insurance company on the death of a US citizen residing in the US. As a direct consequence, we have seen Ireland increasingly being examined and used as a jurisdiction to locate the offshore investment vehicle to acquire such life policies so as to avail of the benefits of the Ireland/US Double Taxation Convention to avoid the potential negative US tax issues arising from the above ruling. Offshore investors have successfully used either Irish regulated funds or Irish special purpose vehicles in an attempt to minimize such US withholding taxes and the type of vehicle depends on a combination of different factors. For further information, please see our publication "Life Settlements: Using Irish investment vehicles to minimise US taxes on life settlement payments" on our website or contact any member of our Banking & Capital Markets team. FINANCIAL REGULTOR ISSUES CONSULTATION PAPER ON NEW CORPORATE GOVERNANCE STANDARDS PROPOSED FOR BANKS AND INSURERS On 27 April, the Central Bank and Financial Regulator announced the commencement of a public consultation on new corporate governance standards for all credit institutions and insurers licensed or authorised by the Financial Regulator including Irish licensed and authorised subsidiaries of international financial services groups. Consultation Paper CP 41 on "Corporate Governance Requirements for Credit Institutions and Insurance Undertakings" sets out minimum requirements as to how banks and insurance companies should organise the governance of their institutions including membership of their boards of directors, the role of the Chairman and the operation of various board committees. The consultation paper sets out the minimum...

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