Legal Aspects of International Finance

Welcome to this module on the legal aspects of international finance. The first unit will introduce you to some of the topics you will study. This introduction will provide and outline some important information on Assessment and the on the Study process.

The teaching of this module is based on English law and makes reference to the law of other jurisdictions where this is relevant. You will be shown how contractual principles are applied to commercial fundraising transactions and how to differentiate between legal principles and the market practices that shape these transactions.

This module covers the legal aspects that complement the financial modules Finance in the Global Market and Banking and Capital Markets. The teaching is based on English law and makes reference to the law of other jurisdictions where this is relevant. You will be shown how contractual principles are applied to commercial fundraising transactions and how to differentiate between legal principles and the market practices that shape these transactions.

Learning outcomes

When you have completed the study of this module and its readings you will be able to:

• outline the difference forms of international finance available in global capital markets and the role of the primary and secondary market
• evaluate the key issues associated with the different forms of debt finance and alternative investment funds
• determine the role of the various parties involved in the different forms of international finance
• evaluate the importance of derivatives and securitisation as a form of international finance and risk management technique
• analyse the key contractual provisions and documentation associated with the different forms of debt finance and alternative investment finance
• explain the role of payment and settlement systems in international finance
• critically assess the importance of the choice of law and jurisdiction clause in international financial transactions.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Hudson A (2013) The Law of Finance. 2nd Edition. Sweet & Maxwell.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 The Law of International Finance

• 1.1 Introduction
• 1.2 The International Financial Market
• 1.3 Introduction to International Finance
• 1.4 Legal Aspects of International Finance
• 1.5 Introduction to International Capital Markets
• 1.6 Dealing with Risk in International Finance
• 1.7 Conclusion

Unit 2 International Loan Finance

• 2.1 Introduction
• 2.2 International Term Loan Agreements
• 2.3 Syndicated Loans
• 2.4 Structure of Typical Syndicated Loan
• 2.5 Secondary Market
• 2.6 Conclusion

Unit 3 Corporate and Sovereign Bonds

• 3.1 Introduction
• 3.2 Forms and Legal Characteristics of International Bonds
• 3.3 Issuing an International Bond – the Parties and Documentation
• 3.4 Issuing, Marketing and Distributing the Bonds
• 3.5 Basic Legal Terms and Conditions
• 3.6 Tax Considerations
• 3.7 Contractual Aspects of Sovereign Bond Offerings
• 3.8 A Brief Note on State Insolvency
• 3.9 Differences between Corporate and Sovereign Bonds
• 3.10 Conclusion

Unit 4 Project Finance

• 4.1 Introduction
• 4.2 What is Project Finance?
• 4.3 Special Features of Project Finance
• 4.4 Security in Project Finance
• 4.5 Some Particular Types of Contract
• 4.6 PPPs and PFIs
• 4.7 Conclusion

Unit 5 Financial Derivatives and Securitsation

• 5.1 Introduction to Financial Derivatives
• 5.2 Basic Aspects of International Derivatives Markets
• 5.3 Managing Legal Risk in International Derivative Transactions
• 5.4 Capacity and Authority to Enter into Financial Derivative Contracts
• 5.5 Termination and Close-Out Netting
• 5.6 The Structure and Main Provisions of the 2002 ISDA Master Agreement
• 5.7 Central Counterparties
• 5.8 Trade Repositories
• 5.9 Securitisation
• 5.10 Conclusion

Unit 6 Alternative Investment Funds

• 6.1 Alternative Investments
• 6.2 Private Equity
• 6.3 Equity-Debt-Leverage Finance
• 6.4 Hedge Funds
• 6.5 Risks
• 6.6 Comparing Hedge Funds and Private Equity Funds
• 6.7 Conclusion

Unit 7 Payment and Securities Settlement Systems

• 7.1 Introduction and Overview of Payment Systems
• 7.2 Risks and Legal Issues in Payment Systems
• 7.3 Types of Payment System
• 7.4 Securities Settlement Systems
• 7.5 Risks and Legal Issues in Securities Settlement Systems
• 7.6 Implications of Using Intermediaries
• 7.7 Financial Collateral
• 7.8 Conclusion

Unit 8 Conflict of Laws, Jurisdiction and Enforcement

• 8.1 Introduction to the Conflict of Financial Laws
• 8.2 The Choice of Governing Law by the Parties
• 8.3 Choice of Jurisdiction
• 8.4 Legal Opinions
• 8.5 Conclusion – Conflict of Laws and International Financial Markets

Module samples

• M441 Module Introduction (PDF)
• M441 Specimen Examination (PDF)
• M441 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules