Investment bonds meaning

In this issue: UK, EU and international regulators and bodies Authorisation, approval and supervision Prudential requirements Financial crime and sanctions Consumer protection Complaints, compensation and claims management Investigations, enforcement and discipline Regulation of capital markets Dispute resolution for financial services lawyers Regulation of derivatives Sustainable finance and ESG Banks and mutuals UK MiFID II EU MiFID II Consumer credit Regulation of insurance Payment services and systems Fintech and cryptoassets LexTalk®Financial Services: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary UK, EU and international regulators and bodies FCA publishes Handbook Notice No 135 The Financial Conduct Authority (FCA) has issued Handbook Notice No 134, outlining amendments to the FCA Handbook and related materials approved by the FCA board on 27 November 2025. See: LNB News 28/11/2025 48. ESMA sets out planned consultations for...

There has traditionally been a misconception that gilt stewardship is not possible On 27 August 2024, the consultancy noted that LDI managers, as significant investors in UK government debt (often via bonds known as gilts), ought to actively engage with policymakers to address environmental breakdown. These managers deploy hedging techniques designed to protect pension schemes from swings in interest rates and rising or falling inflation. LCP also said that gilts now play an expanding role in defined benefit pension portfolios, and that trustees should press their LDI managers to set out and develop a stronger, more robust approach to engaging with government climate policy...

In this issue: Authorisation, approval and supervision Prudential requirements Operational resilience Financial crime and sanctions Consumer protection Complaints, compensation and claims management Investigations, enforcement and discipline Regulation of capital markets Regulation of derivatives Sustainable finance and ESG Banks and mutuals EU MiFID II Consumer credit, mortgage and home finance Regulation of insurance Payment services and systems Fintech and cryptoassets Dates for your diary New and updated content Financial Services Enforcement Database Daily and weekly news alerts LexTalk®Financial Services: a Lexis®Nexis community Authorisation, approval and supervision The Financial Conduct Authority has unveiled streamlined annual Regulatory Priorities reports, replacing over forty portfolio letters. The slimmer format cuts publications to nine sector‑specific reports, each delivering a one‑page summary of priorities with direct links to fuller guidance. Updated every year, the reports are intended to clarify what the regulator expects from firms while lightening the compliance load....

What does this Practice Note cover? This Practice Note sets out an overview of liability management techniques for bonds—covering bond buybacks, tender offers, exchange offers and consent solicitation—placing particular emphasis on the process, the documentation to be prepared, and the principal legal and regulatory considerations that arise in delivering such transactions. The Note is directed mainly at investment‑grade bonds issued in the UK and European markets. For further information on liability management exercises, including liability management transactions involving loans/credit agreements, see Practice Note: FAQs on Liability Management Exercises. What is liability management in relation to bonds? Liability management describes a range of techniques used by issuers to actively manage or restructure their outstanding bond liabilities. Typical liability management transactions comprise: bond buyback tender offer exchange offer consent solicitation A liability management transaction can also be structured as a combination of these techniques...

What are investment-grade, high yield and crossover bonds? Investment grade (IG) bonds are debt instruments that hold an IG credit rating: BBB and above on the S&P and Fitch scales, and Baa3 and above on the Moody’s scale (for further detail on credit ratings, see Practice Note: Credit ratings). IG issuers are usually sizeable blue‑chip corporates—well‑known, well‑established and well‑capitalised—and are often companies with shares listed on a major stock exchange. Aside from sovereign bonds of developed markets, IG securities are widely regarded as among the safest income‑generating investments. As a consequence of this perceived safety, IG bonds tend to offer lower yields than high yield (HY) bonds. Many institutional investors and pension schemes operate policies and mandates that constrain their bond holdings to assets with, on average, lower default risk, such as IG instruments or government obligations. In broad terms, HY bonds encompass all bonds from issuers rated below IG. HY issuers may include public companies that lack (or previously had but later lost) an IG rating, private companies...

Interest Interest is a key concept within UK tax law. In particular, a duty to withhold UK income tax can arise on payments of specified categories of interest; for further detail, see Practice Note: UK withholding tax on yearly interest. Be aware that, from 6 April 2016, the tax deduction scheme for interest (TDSI) no longer applies. Broadly, before 6 April 2016, the TDSI obliged a deposit-taker (ie a bank) to deduct UK income tax from interest paid or credited before 6 April 2016 on a deposit held by a UK resident individual, an individual’s personal representatives or trustees. For interest paid or credited on or after 6 April 2016, alongside the abolition of the TDSI (given effect by removing section 851 of the Income Tax Act 2007 (ITA 2007)), an express exemption confirms there is no requirement to withhold UK income tax under ITA 2007, s 874—ie the rule to deduct UK income tax from yearly interest—where the payment is made by a deposit-taker and the investment is...