Jurisdiction(s):
United Kingdom

Key definition

Loans definition

What does Loans mean? Loans are agreements to advance money on terms of repayment, usually with interest. In pensions practice, this covers any arrangement where occupational pension scheme assets are lent. In Great Britain, legislation defines “employer-related investments” and strictly restricts them: section 40 of the Pensions Act 1995 (mirrored in Northern Ireland legislation) and the Occupational Pension Schemes (Investment) Regulations 2005 prohibit loans to the sponsoring employer or to persons connected with, or associated with, the employer, and ban giving guarantees or security for the employer’s obligations. Other employer-related investments (such as employer shares or securities) are subject to a...

Information asymmetry and confidentiality in secondary loan trading: regulation, information barriers, 'Big Boy' provisions, LSTA/AIMA guidance, FCA Principles and EU NPL disclosure regime

Published by a LexisNexis Banking & Finance expert

Practice notes

STOP PRESS:

The Loan Market Association (LMA) has issued refreshed editions of the standard terms and conditions for Par and Distressed Trade Transactions, the full and complete sets of Funded Participation and Risk Participation Agreements, and the Secondary Debt Trading Documentation User Guide; all of which take effect from 17 March 2026. The changes include the deletion of LIBOR references, updates to IBOR rate definitions and the Target2 definition, and revised ERISA representations that incorporate further exemptions from the prohibited transaction Rules under ERISA and the US Internal Revenue Code. The revised documentation is accessible to LMA members only via the LMA’s Documentation Hub.

Is loan trading on the secondary market a regulated activity? The UK position

The use of information within the UK loan secondary debt market remains somewhat unclear. The UK regulatory framework oversees firms that deliver services to clients connected to ‘financial instruments’ and the markets where those instruments are traded. Loans are not treated as ‘financial instruments’ (commonly taken to include shares, bonds, units in collective investment schemes and derivatives) nor as ‘transferable securities’ (generally viewed as securities that are negotiable on the capital markets or admitted to trading on a regulated market). However, loan-related structured...

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Diane Roberts

Reed Smith LLP

Diane Roberts is a partner in partner in Reed Smith's Commercial Restructuring and Bankruptcy group and a member of the structured finance practice. She advises stakeholders (including bondholders, claims holders and traders, commercial banks, creditor committees, distressed investors, hedge funds, insolvency practitioners, lenders, management, private equity houses and trustees) involved in financial restructurings and insolvencies. She has extensive experience advising agents and trustees in connection with defaults, restructurings and insolvencies and exercises of their powers and discretions. Her practice includes advising trustees, agents, servicers and other participants in securitisations, project finance transactions, loans and high-yield bonds. She also regularly advises on UK and cross-border asset portfolio transactions, debt financing and the trading of bank debt, trade claims, unregistered securities and other illiquid instruments, under both the Loan Syndication and Trading Association (LSTA) and Loan Market Association (LMA) debt trading regimes....

Jacqui Allen

Mandel, Katz & Brosnan LLP

Jacqui Allen heads the London office of Mandel Katz & Brosnan. Jacqui's practice focuses on the secondary loan trading markets and providing advice on the legal issues relating to the purchase and sale of distressed assets. Jacqui has been actively involved in the loan trading market since 1997 and has had extensive experience in various types of high-yield transactions throughout the world, including the purchase and sale of distressed and par loans, trade claims and loan restructurings. In addition, Jacqui concentrates on representing banks, hedge funds and other financial institutions that purchase and sell distressed assets in emerging and established markets in Europe, Asia and Australia....

Web page updated on 21/05/2026

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