Under the microscope standardisation Amelia Slocombe Managing Director

Under the microscope: standardisation Amelia Slocombe, Managing Director and Head of Legal – Loan Market Association

LMA activities Documentation Efficiency Events & Education LMA Market Practice Liquidity Regulation Loan Operations Transparency 2

Agenda – Standards (Part 1) - What do we mean by “standards” - How standards differ from regulation - Documentation standards and the role of the LMA - How standard documentation can assist growth

Agenda - Standards - What do we mean by “standards”? - Standard wording, guidelines, market practice and recommendations - Example: LMA documentation - How standards differ from regulation (binding vs nonbinding) - Example: CRR requirements

How standard documentation can assist growth - Transparency: e. g. LMA suite of documents: - Widely recognised and accepted - Provides a commonly agreed starting point for counterparties to a transaction - Basis from which negotiation can begin - Risk reduction: - Standardised (and “tested”) legal structure, which can be adapted for specific needs - Efficiency: - Focus is on the key negotiating points - Avoids excessive discussion on boilerplate - Enables discussions to be streamlined and focused

How standard documentation can assist growth - Cost saving: - Greater efficiency leads to reduced cost - Negotiation of documentation is potentially reduced, thus lowering legal fees - Nevertheless, lawyers and professional advisers will still be required to negotiate and tailor the document to reflect the commercial needs of the parties - Syndication: - Easier for lenders to syndicate portions of the debt to other banks or financial institutions if the loan facilities follow an agreed standardised form - Regulatory incentives: - Regulators get comfort from the fact that standardisation exists - LMA becomes a point of contact for regulatory discussion and education - Can lead to other types of regulatory incentive over time 6

For further information, please contact Amelia. slocombe@lma. eu. com +44 20 7006 4114