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ARTICLE · 30 OCTOBER 2008

Market Slump: Some Practical Hints

Withers LLP
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The recent tumultuous economic developments have led to volatile and unpredictable market conditions. While we cannot forecast what will come next, a number of protective steps can be taken, and these are summarised below.

United KingdomFinance and Banking
John Langan
John Langan
Sophie Dworetszky
Sophie Dworetszky
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The recent tumultuous economic developments have led to volatile and unpredictable market conditions. While we cannot forecast what will come next, a number of protective steps can be taken, and these are summarised below.

Overview

Current market conditions dictate that very close scrutiny will need to be paid to counterparty risk. Custody agreements can be an overlooked risk area: it may be surprising to know that in some instances title to the custodied assets can pass to the custodian leaving the client very exposed in the event of insolvency. The note below addresses this and other pressure points in more detail, and highlights potential ways of managing this risk.

Custody agreements can also give rise to problems in light of the Finance Act 2008, leading in some circumstances to offshore assets being accidentally remitted to the UK leading to potential UK tax charges of up to 40%.

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