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On 24 March 2010 the Mortgage Funding Group was publicly launched at a major conference at London's British Library sponsored by Sidley Austin (www.sidley.com).
Click here to see the Conference Agenda.
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Key note speaker for the day was David Smith, Economics Editor of The Sunday Times, who gave an excellent presentation on the UK economy and where we are today.
Other speakers talked through all major issues affecting the mortgage market and how it is affecting the wider recovery of the economy and housing market.
Further down this page there is a link to a PDF file containing each speaker's presentation slides.
The MFG would, however, be grateful if you would first take a few seconds to read the information below.
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Important background to the conference
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In the autumn of 2009 Matthew Duncan of Sidley Austin suggested to Tony Ward that they collaborate in organising a conference themed on positive and practical solutions for funding the UK mortgage industry. In parallel the idea for the MFG emerged from IMLA. Given that the MFG was consistent with the theme of the conference, it was agreed that the conference be held in March 2010 and be used for the public launch of the MFG.
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The conference feedback (both the forms and oral comments on the day) was very positive with particularly strong support for the role of the MFG to be a cross industry forum (not a trade body) to bring all elements of the UK mortgage sector together to focus on the funding issue in a collective, co-ordinated and inclusive manner. Accordingly the MFG proposes to send each attendee a summary of progress so far and some ideas for next steps.
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The feedback also indicated strong support for holding future forum conferences to bring the industry together to discuss the issues and identify practical solutions.
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Sidley Austin covered the cost of the conference (so there was no attendance charge to attendees) and provided all the administration. As a mark of appreciation and to encourage them to support future events, MFG believes it would be very helpful if Sidley Austin could derive some recognisable benefits from the conference. For example, asking them to quote for upcoming legal work and/or trying out their services. Some bullet points summarising their services to the UK residential mortgage sector are set out below.
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Sidley Austin and the UK residential mortgage sector
The UK residential mortgage sector is, and has been for many years, one of the main focal points of Sidley's London office (www.sidley.com), which has approximately 120 lawyers. They have earned an enviable track record and reputation in this field. They provide a wide range of English law services to many participants (including lenders, funders, arrangers and servicers), for example:
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Wholesale funding
advising on the full range of debt financing transactions including vanilla bond issues, convertibles, regulatory/hybrid capital instruments, MTN programmes, commercial paper programmes (especially ABCP), certificates of deposit, repackagings, structured debt finance, warehouse finance and secured lending.
As one of the world's largest law firms, Sidley has a wide international reach which is essential in many debt financing transactions. Click on the following links for a free PDF copy of the September 2009 edition of Sidley's very popular books
- Accessing the U.S. Capital Markets - Non-U.S. Issuers, and
- Accessing the U.S. Capital Markets - Securities Products.
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RMBS, covered bonds and structured finance
being one of the 3 leading law firms advising on UK RMBS and covered bonds throughout the past 8 years and having played a major role in every significant legal structure development in the UK residential mortgage funding market during that time, including:
- first UK covered bond programme - Halifax,
- first RMBS master trust delinked, single issuer structure - Granite Master Issuer,
- first segregated standalone multi-issuance RMBS structure - Bluestone Securities,
- master trust programmes - eg Northern Rock's Granite programme and Halifax's Permanent Financing programme,
- first US covered bond programmes - Washington Mutual and Bank of America,
- first RMBS residual refinancing programmes - Northern Rock's Whinstone and Britannia's Dovedale.
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Regulatory capital efficiency
advising on prudential requirements (especially under the Basel II, the EU Capital Requirements Directive, Solvency II and the UK rules) including review of classification of existing positions (particularly in structured finance transactions) and potential efficiencies, especially in the context of financing transactions.
Click on the following link for a free PDF copy of the March 2010 edition of Sidley's very popular book Hybrid Capital Product Development, Focusing on Tier 1 and Other Hybrid Capital Products which is highly practical, analysing loads of deal structures (with structure diagrams) in many countries and explaining what reg cap benefits they achieve and why.
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Establishing, buying and selling mortgage lenders
including bespoke equity and debt structures, origination (or "wet") funding, obtaining FSA authorisations and other licences and drafting operational contractual arrangements.
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Mortgage product/retail product documentation
including drafting pro forma mortgage origination documentation (including provisions allowing the mortgage to be used in wholesale financings) and other retail product documentation (including prepaid cards and credit cards) and advising on requirements of MCOB, CCA and unfair terms law.
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Distribution/intermediary arrangements
advising on distribution structures, including via networks and clubs and drafting contractual documentation for intermediary arrangements.
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Outsourcing and servicing arrangements
including drafting outsourcing contracts, advising on requirements MCOB and (particularly in the light of the FSA thematic reviews and new tougher approach) review and changes to existing arrangements.
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Due diligence
on legal aspects of mortgage origination and mortgage lenders (including as part of wholesale financing transactions but also in the context of responding to enquiries from the FSA regarding risk analysis).
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Buying and selling mortgage portfolios
including innovative portfolio trading facility arrangements and forward flow sale / purchase facility structures (and associated hedging).
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Derivatives and hedging
advising on the full range, from day to day trading documentation to complex structured derivatives and synthetic CDO and credit derivative transactions, all kinds of ISDA documentation, derivative products and repos/securities lending documentation.
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Financial services regulation and compliance
covering the financial regulatory system and requirements in the UK and EU including obtaining authorisations, dealing with investigations and enforcement by regulators (including FSA, OFT and ICO), data protection and privacy, anti-money laundering laws and MCOB.
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Electronic banking and commerce
including advising on e-money, prepaid cards, delivery of financial services using the internet, commercial agreements with payment systems operators and implementation of the EU Payment Services Directive.
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Investor positions and restructurings
particularly where clients have investments in structured finance transactions, including advising on strategies for exercising and enforcing rights or restructuring with a view to maximising recoveries or exiting.
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Dispute resolution
covering all forms of resolution (including arbitrations, mediations and court actions) and seeking remedies such as injunctions and freezing orders, both in a UK and internationally. They have represented clients in some of the high profile reported cases arising in the context of the credit crunch.
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UK tax
advising on UK tax aspects of both domestic and international transactions, often working closely with clients and colleagues in the context of the matters referred to above.
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Approach - Sidley aims to provide a high level of service, listening carefully to clients, understanding clients' businesses and objectives and carrying out legal work in a committed, focussed, efficient and common sense manner. They use their significant experience and technical knowledge to try to make complex issues clear and to create solutions which match the client's needs. They like clients to enjoy working with them even where work needs to be done under a lot of pressure.
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Value for money - Sidley is used to working within client budgets and can agree fee structures for particular matters or volumes of work in advance. It is normally simply a matter of agreeing fair and reasonable terms for the scope and basis of the work. They will use their experience to seek to carry out work as efficiently as possible, including using technology and support staff where appropriate.
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Contact - Matthew Duncan, mduncan@sidley.com, direct tel 020 7360 3781.
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Conference presentations - slides
To download the composite PDF file containing all the slides of all the presentations, you should right click on the following link and then choose "Save Target As.." (or equivalent) to save it to your computer.
The file is in PDF format and is password protected. The password has been circulated by email to those who registered to attend the conference.
Composite PDF File.
Please note that these slides are provided only as an aide memoire for attendees. The content must not be reproduced or used except with the prior consent of the speaker or other copyright holder.
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Introduction and objectives of this event
Tony Ward, Vice Chairman / CEO
IMLA / Home Funding
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Keynote address: State of the nation/economy
David Smith, Economics Editor
The Sunday Times
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Funding sources: Capital markets
Robert Plehn, Head of Securitisation
Lloyds Banking Group
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Funding sources: Banks & retail deposits
Mike Slevin, Head of UK Securitisation
RBS Global Banking & Markets
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Funding users: Building societies
Dean Carter, Treasurer
Nottingham Building Society
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Funding: A bigger picture?
Rob Thomas, Senior Policy Adviser
Council of Mortgage Lenders
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Housing market context
John Wriglesworth, Managing Director
The Wriglesworth Consultancy
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The FSA's reforms to the mortgage market
Lynda Blackwell, Mortgage Policy
Financial Services Authority
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Some alternative perspectives
Matthew Duncan, Partner, Funding team
Sidley Austin LLP
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What the government and regulators ought to be doing
Phil Jenks, Managing Director
Phil Jenks Consultancy Ltd
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Mortgage products and distribution models - Lender perspective
David Finlay, Intermediary Business Director
The Woolwich/ Barclays Bank
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Mortgage products and distribution models - Distributor perspective
Stephen Smith, Director of Housing
Legal & General
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