Law specialisms : Financial regulation

Anna Doyle is an associate in Shearman & Sterling's financial institutions advisory and financial regulatory (FIA) group. She advises on a range of regulatory compliance and related matters.

Financial regulation has been in the spotlight over recent years, following the destabilising events of the financial crisis. Some reforms are already in place, including closer oversight by regulators and recovery and resolution plans, or 'living wills', for banks in crisis. Many more are in progress, so regulatory advice is increasingly important for businesses in the financial sector.

What does the work involve?

Any new business initiative by a financial institution may have regulatory implications, so the work spans the advisory, transactional and contentious spheres. Core elements are:

• Setting up and obtaining authorisation for new entities including banks, exchanges and clearing houses
• Establishing compliance programmes and providing ongoing advice 
• Advising on mergers and acquisitions, outsourcings and corporate restructurings involving financial businesses
• Drafting and negotiation across a range of practice areas, such as capital markets offerings, structured finance transactions and funds
• Representing clients in relation to regulatory investigations, prosecutions and enforcement proceedings

The financial sector is highly innovative, so there is scope for ground-breaking work. The award-winning FIA group at Shearman & Sterling takes the lead on matters going beyond regulatory compliance, such as the structuring and development of new products, trading platforms and services and lobbying on new legislative proposals.

The majority of UK financial services legislation has its origins in European law. There is a strong international element, as clients operate in global financial markets and need to understand how their obligations in different jurisdictions fit together.

Who are the clients?

Specialist financial regulatory teams are found mainly in larger City firms, and their clients are primarily major financial institutions including banks, investment firms, hedge funds, exchanges, clearing houses, settlement systems and trading platforms.

Many clients have an in-depth understanding of the regulatory regime and deal with most ongoing compliance obligations in-house. External advice is generally sought in more complex or changing areas or in relation to new business products and developments. 

Clients look for focused, practical solutions and lawyers who understand how their businesses work. Quick answers may be needed on complex issues, which makes the working hours variable, although generally more stable than core transactional groups.

What skills are required?

As this is a technical area of law, key attributes are attention to detail, plus the ability to work logically through problems and apply first principles to new scenarios. An interest in the area is vital, given the challenge of keeping up to date with new developments.

What does the future hold?

More change! Financial services businesses, particularly banks, exchanges, clearing houses and insurers, are facing a raft of new European legislative proposals, as regulation is tightened to deal with perceived failures highlighted by the financial crisis. In the UK, these and other significant changes to the law will be phased in over the coming years, and the main regulatory authority (the Financial Services Authority) will be replaced with new regulators. The area is busier than ever and likely to be in demand for the foreseeable future.

What do trainees do?

Trainees can expect to be challenged and stimulated by the work in this area. They typically carry out legal research and assist with preparing advice to clients. They are also involved in drafting agreements and documentation and help to prepare various regulatory applications and filings.