LLB BIFL Specimen WA B - PPQ PDF

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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

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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 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 mitigating circumstances 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 Critically explain the obligations which a bank owes to its customer, considering whether those obligations place too significant a burden on the bank.

End of Question 1

LAW SCHOOL

2

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

Question 2 Larry has a personal bank current account (‘his account’) with the Money Bank plc (‘his bank’). Larry drew a cheque on his account to pay for some building work which was recently undertaken on his house. However, he is unhappy with the work and decides to countermand the cheque. He contacted his bank by email stating as follows: ‘Please stop my recent cheque dated 24 December 2016 to my builder as I am unhappy with his work.’ Unfortunately, his bank paid the cheque and is refusing to refund Larry. When the cheque was paid, it caused Larry to become £2,929.11 overdrawn. His bank charged him an initial amount of £100 for an unauthorised overdraft and a further £6 for each day his account was overdrawn. In total, he was charged £260 until his account was restored to credit. Larry has a joint account with his mother, Nora. Unfortunately, Nora died recently. Larry seeks your advice as to: a)

whether he can recover from the bank the funds paid to the builder;

b)

whether the overdraft charges levied on his account are lawful;

c)

whether and, if so, in what circumstances, Larry would be able to claim the funds jointly held in the bank account with his late mother, Nora; and

d)

how would you advise the bank on recovery of the funds paid to the builder if it had repaid Larry?

End of Question 2

LAW SCHOOL

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LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

PART B Question 3 Critically explain what you understand by the terms ‘prudential regulation’ and ‘conduct regulation’, reflecting on whether, and if so why, they should be undertaken separately, especially considering regulatory theory and practice in the United Kingdom.

End of Question 3

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4

LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

Question 4 ‘Why should banks be accorded special treatment in insolvency?’ Hüpkes, Insolvency – why a special regime for banks? [2002] Current Developments in Monetary and Financial Law 1, 2 Critically evaluate whether and, if so, why you consider that banks should be afforded special treatment on their insolvency, reflecting on the extent to which you consider the UK’s bank insolvency regime is sufficiently robust to respond to another financial crisis.

End of Question 4

LAW SCHOOL

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LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

Question 5 Critically consider and explain what aspects of international finance would most likely be regarded as causes of the global financial crisis.

End of Question 5

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LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

PART C Question 6 Dominator plc manufactures computer gaming software and ‘apps’. In January 2013, Dominator plc, issued corporate bonds to raise £22m to fund expansion plans. It planned to use the funds to set up a specialist team of programmers to devise new and innovative apps which would appeal to particular target demographics. The bond issue was fully subscribed. The prospectus was drawn up with the assistance of Elemental Partners, an investment bank. It provided, in part: ‘Use of Proceeds The proceeds of the Notes may be used for business development and expansion. Use of the proceeds for other purposes needs prior approval. Business Overview We operate in the gaming software market, via traditional and ‘app’ platforms. Trading conditions have been good and profits increased annually by over 12 per cent since 2009.’ A trustee is appointed under the terms of the bond issue and the terms and conditions of the bond issue documentation provide, in part: ‘Events of Default The trustee has absolute discretion to determine events of default and other administrative matters. Management In the management of this bond issue, decisions of the majority bind the minority and are final. Decisions may not be litigated or arbitrated.’ One of the bondholders, Furtive Insurance Group, discovered that £2.2m of the proceeds was distributed to the board of directors by way of bonus in 2014. The trustee approved the payment. On 23 December 2016, the majority voted to subordinate the rights of bondholders holding less than eight per cent of Notes. This affected only one bondholder. Advise: (a)

on the circumstances in which a trustee might exercise its decision-making powers and whether the exercise of such powers might be challenged by a disgruntled bondholder;

(b)

on what information would need to be known about the decision to approve the bonus payments made in 2014 should Furtive Insurance Group wish to challenge that decision; and,

(c)

whether the minority might challenge a decision of the majority under a bond issue and whether the minority in this scenario has any redress in respect of the decision taken on 23 December 2016. End of Question 6

LAW SCHOOL

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LLB (HONS) BANKING AND INTN’L FINANCE LAW

SPECIMEN WRITTEN ASSESSMENT

Question 7 Antalia Oreo is one of 15 lenders under a syndicated facility of £500m provided to Branston Trains plc, a train carriage designer and builder. The syndication agreement has been in force since January 2010. The purpose clause of the loan provides: ‘4.1 The purpose of this loan agreement is to enable the borrower to fund expansion into continental Europe. ’ Antalia Oreo has a £20m commitment under the loan, with the remaining £480m being made up by the other syndicate members. At a meeting of the syndicate members on 5 July 2016, it was agreed by 90 per cent of the syndicate members that there was no material adverse change in Branston Trains plc’s status when the United Kingdom voted to leave the European Union. On 8 August 2016, Branston Trains plc’s management proposed to offer all syndicate members shares in Branston Trains plc if they voted to give Brantson Trains plc a ‘payment holiday’ from September 2016 to January 2017, inclusive. A further motion proposed that the rights of syndicate members with exposure to less than £50m under the syndicate be subordinated on repayments made by Branston Trains plc for a period of 12 months, beginning in February 2017. Antalia Oreo voted against both motions, but both motions were passed by majority. Given that Antalia Oreo voted against the first motion, it did not receive shares. Answer all questions, below: (a) explain the liability that an arranging bank might be exposed to when a syndicated loan is arranged; (b) whether there was a material adverse change in the position of Branston Trains plc which could be approved by majority decision, when the United Kingdom voted to leave the European Union on 23 June 2016; and (c) what action might be taken by Antalia Oreo against the decisions of the majority taken on 8 August 2016. If any viable action might be taken, what remedy might be available to Antalia Oreo.

End of Question 7 End of Assessment

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