LLB BIFL Specimen WA A - PPQ PDF

Preview

Summary

PPQ...

Description

PLEASE DETACH AND HAND IN THIS PAGE SEPARATELY

DECLARATION OF FITNESS TO SIT EXAMINATION Students must complete the information below. examination paper for further information.

Please refer to the front of your

Law School



School (please tick one)

Business School

Programme

LLB (Hons)

Examination

Banking and International Finance Law – Specimen Written Assessment

Date Name I am not aware of any medical or other extenuating circumstances that would impair my performance in this examination

Signature ……………………………………..

This sheet will be collected by an invigilator during the examination. Please do not leave your desk until it has been collected

LLB (Hons) Banking and International Finance Law Specimen Written Assessment Date: Time: Time allowed: Three hours Candidates must attempt THREE out of the SEVEN questions on this question paper FIT TO SIT POLICY – IMPORTANT Under the above policy, any student who attends an assessment is deemed to be “fit to sit” that assessment. This is important. It means that you may not (for example) later submit a concession application relating to impaired performance in that assessment because of illness, or any other mitigating factor which affected you at the start of the assessment. If you are not “fit to sit”, you should not attempt the assessment.

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

Instructions to Candidates Student Registration Number Write your student reference number (SRN) on the front cover of every answer booklet / continuation sheet you use. You should NOT write your name anywhere on the answer booklet / continuation sheet. Questions Candidates must attempt THREE out of the SEVEN questions on this question paper. The paper is in three parts: Part A, part B, part C. You must answer ONE QUESTION ONLY FROM EACH PART. Write in blue or black ink in the answer booklet provided. Start each answer on a new page. Answers written elsewhere, such as on rough paper, will not be marked. Time Time allowed: Three hours. DO NOT WRITE ON YOUR ROUGH PAPER, QUESTION PAPER OR INSIDE YOUR ANSWER BOOKLET BEFORE THE EXAMINATION HAS STARTED. STOP WRITING IMMEDIATELY UPON BEING INSTRUCTED TO DO SO BY THE INVIGILATOR AT THE END OF THE EXAMINATION. A FAILURE TO COMPLY WITH ANY OF THE ABOVE INSTRUCTIONS MAY CONSTITUTE CHEATING. Permitted materials The ONLY materials permitted are: 1. 2.

English Language Dictionary; English/Foreign Language Dictionary.

The dictionaries must be in book, not electronic form; law dictionaries and Latin dictionaries are not permitted. THERE MUST BE NO ANNOTATION WITHIN THE PERMITTED MATERIALS. Note: It is your own responsibility to make sure that you have all the permitted materials. Spare materials ARE NOT available. You ARE NOT permitted to share materials with another student.

This Assessment is printed DOUBLE-SIDED. Students must check the FRONT and BACK of all pages.

DO NOT TURN OVER THE PAGE UNTIL INSTRUCTED

LAW SCHOOL

1

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

PART A Question 1 'Statute law relating to banking services is limited, and mostly of venerable age; what exists is largely of a technical character, concerned with the usages of cheques and bills of exchange. Thus, the banker-customer relationship has been largely left to implied contract, whose terms have been elucidated by a patchwork of judicial decisions. Much of this case law is again somewhat ancient, and has changed remarkably little over time.' (Jack, Banking Services: Law and Practice Report by the Review Committee, 1989 Cm 622, para. 2.07.) Critically evaluate this statement by reference to the terms imposed on the parties to the banker-customer contract and assess whether comprehensive reform of the banker-customer contract is required.

End of Question 1

LAW SCHOOL

2

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

Question 2 John has recently completed a large drug deal generating £250,000 is used notes. He set up a company, Pantea Ltd. The company is a front for his criminal activity. John employed two office juniors, both aged 18; Karina and Lucy. John explains to the employees that his company is an import / export company. John hands £3,400 in used notes to Karina and asks her to deposit them in the company bank account at the Bartlett Bank plc. When Karina arrives at the bank, she is invited to wait in a side room while the deposit is dealt with. After approximately 20 minutes, Karina is thanked and she leaves the bank. Unknown to Karina, the bank employee reported the transaction to the Bartlett Bank plc's money laundering reporting officer who, in turn, reported the matter to the National Crime Agency. At a meeting with his accountant, Malcolm, John indicated that he had bid on a small flat in London to use as a buy-to-let property and that the bid had been accepted. John had £155,000 deposited on account with Malcolm. John asked Malcolm to transfer the funds to his personal bank account at the Leaves Bank Ltd. John agreed to the transfer and made the transfer when he returned to the office after the meeting. After three days the £3,400 has not yet been deposited in the account. John visited the bank and asked to speak with someone about the deposit. He spoke with Noola, a junior bank employee, who said that she would ask someone about it. John overheard part of the conversation as she returned from behind the bank's secured door: 'Okay, I'll just tell him the bank's computer network is down to throw him off the scent.' On hearing these words, John left. He returned to the offices of Pantea Ltd and packed £200,000 of the money from the drug deal into a suitcase and bought an aeroplane ticket to Namibia. Advise as to whether any offences of money laundering have been committed and whether the Money Laundering Regulations 2007 have been breached.

End of Question 2

LAW SCHOOL

3

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

PART B Question 3 'As Charles Goodhart notes, the failure of a series of banks can have two types of consequence. There can be a collapse in the stock of money, and there can be a breakdown of the national payment and settlement system.' (Wood, 'Commentary on 'Goodhart, Are Central Banks Necessary?' in Capie and Wood, Unregulated Banking: Chaos or Order? Macmillan, 1991, page 30.) Critically evaluate this statement in light of the changes made to the regulation of the United Kingdom's financial system since 2009, assessing whether the abolition of the Financial Services Authority and the introduction of the Banking Act 2009 adequately prepare the United Kingdom for a future financial crisis.

End of Question 3

LAW SCHOOL

4

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

Question 4 'Any system of regulation can be expected to experience problems, and it is a matter of judgement as to whether such difficulties can be resolved within the system or whether the system requires replacement.' MacNeil, An Introduction to the Law of Financial Investment (Second edition, Hart Publishing, 2012) at page 46. Considering this quotation, critically evaluate the changes made to the system of bank regulation in the United Kingdom in response to the financial crisis, assessing whether you consider that response was appropriate or disproportionate.

End of Question 4

LAW SCHOOL

5

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

Question 5 Critically evaluate the impact of the global financial crisis on the international financial architecture.

End of Question 5

LAW SCHOOL

6

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

PART C Question 6 Alpha LLP is a small hedge fund based in the City of London. In April 2014, it purchased a sub-participation in a large syndicated loan from Delta Partners LLP. The purchase gave Alpha LLP a 3.47 per cent interest in the syndicated loan. The syndicated loan was originally agreed in January 2012 in the sum of £400m. The borrower is Beta plc, which manufactures motherboards for tablet PCs. The purpose clause of the loan (clause four) was expressed in the following terms: ‘The monies advanced under the terms of this agreement are to be used solely for the purposes of purchasing Gamma Ltd and for other matters relating to the commercial functions of Beta plc.’ Standard clauses in the syndicated loan agreement operated, and the management clause of the agreement (clause 22.5) provided: ‘The majority may bind the minority on all matters on which a vote might be determined to be held. This includes, but is not limited to, administrative, payment, and liability provisions.’ On 22nd December 2014, a meeting of the syndicate members was called at a central London hotel. All 22 members of the syndicate were in attendance. The holders of the majority voted 78.7 per cent to 21.3 per cent in favour of the following: (1) All syndicate members with an individual percentage interest of less than five per cent should be subordinated to the majority holders, Kappa plc (33.3 per cent), Lambda Ltd (25.4 per cent), and Phi plc (20 per cent). This decision directly affected Alpha LLP and the other 18 members of the syndicate. (2) That Beta plc is not in breach of clause four of the syndicated loan agreement by purchasing Upsilon Ltd and using part of the loan monies to fund a dividend to its shareholders. Further, Omega Ltd (a minority participant in the syndication with 2.27 per cent) contends that during the syndication process, certain representations were made about the solvent status of Beta plc which it believes were false. Alpha LLP and Omega Ltd come to you for advice. They both wish to know whether they are bound by the decision of the meeting on 22nd December 2014. Further, Omega Ltd wishes to know whether either the arranging bank or the borrower might be liable to it for misrepresentation. Insofar as your advice to both Alpha LLP and Omega Ltd respecting the meeting is concerned, would your answer differ if Kappa plc had a 22 per cent stake in Beta plc? End of Question 6

LAW SCHOOL

7

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

Question 7 In January 2011, Antigone Ltd issued corporate bonds in order to fund an expansion of its business activities as part of a ten-year strategy. You are approached by the bondholders’ committee of the issue which represents some of the bondholders in the Antigone Ltd issue. The committee seeks your advice on the following: (a) Whether it is possible, and in what circumstances, a bond default might be declared. In October 2014, Antigone Ltd defaulted on its bond payments, the last payment under the bond issue being in July 2014. Could the agreement be accelerated? (b) What consequences might flow from Antigone Ltd failing to meet its information undertakings? (c) Whether Antigone Ltd might be liable for statements made prior to the bond issue. (d) Whether it would be advisable, in the future, to subject bond issues to New York State law and, thereby, attract coverage from the US Trustee Indenture Act 1939. You should be aware that the bond issue is governed by English Law and that it is constituted by trust deed. Advise the committee.

End of Question 7 End of Assessment

LAW SCHOOL

8...