UK: Banking And Capital Markets Insight

Last Updated: 7 July 2011
Article by Deloitte LLP

Most Read Contributor in UK, August 2017

Welcome to the June 2011 edition of Banking and Capital Markets Insight, which focuses on technical issues currently coming out of the banking, capital markets, securities and fund management arenas.

Our articles this month cover the following diverse areas:

  • Helen Shaw and Mateusz Lasik on the International Accounting Standards Board's (IASB) and the Financial Accounting Standards Board's (FASB) jointly developed Supplement on 'Financial Instruments: Impairment' and the concept of a "good book" and "bad book", with the impairment allowance on the former being the higher of the lifetime expected credit losses apportioned over the remaining life of the portfolio, and the credit losses expected to occur on assets in the portfolio in the foreseeable future;
  • Paul Leech on the challenges of completing the Client Money and Assets Return, which is being introduced by the Financial Services Authority (FSA) for "large" and "medium" sized firms from October 2011, with greater ongoing disclosure requirements for levels of customer and client assets held, the latter on a daily mark to market basis, to arrive at highest and lowest numbers for the month. This is likely to provide a challenging new requirement for a number of firms;
  • Gary Campbell and Andrew Buchanan on international efforts to put in place a Financial Transaction Tax based on the value of individual transactions traded, and a Financial Activities Tax, based on financial sector firms' wages and profit, which is more likely to be implemented at an EU rather than international level. The implications are significant for firms in terms of systems development costs, just as much as the direct costs of the proposals; and
  • Zoe Smith and Stephen Woodhouse on the potential for employee benefit schemes to provide employee remuneration benefits, despite challenges from the FSA's disguised remuneration rules and the tax challenges which continue to arise on contributions made into Employee Benefit Trusts (EBT).

We look forward to your comments on the current edition and your suggestions for future articles.

Mike Williams

Impairment of financial assets: a converged approach?

Following the recent financial crisis, the accounting rules on recognising and measuring impairment on financial assets have come under close scrutiny by standard setters, regulators and politicians. Both the IASB and the FASB issued in the first instance, separate exposure drafts (EDs) proposing changes in this area. Both advocated a move to an expected loss approach, albeit in different ways. Although this broad direction was welcomed, many commentators emphasised the importance of convergence between IFRS and US GAAP in this key area and the need for a model that is capable of being applied to "open portfolios" (where assets are both added to and removed from the portfolio over its life) as many financial institutions manage assets in this way. In response to this, the IASB and the FASB issued in January 2011 a jointly developed Supplementary document 'Financial Instruments: Impairment' (the "Supplement") to the IASB's 'ED/2009/12 Financial Instruments Amortised Cost and Impairment' with a comment deadline of 1 April 2011.

Convergence and practicality

Both the IASB and FASB have tried to address the criticism that under the current accounting rules the provision for loan losses was too little too late. Prior to the Boards coming together to discuss a joint model, they each developed their own models. It is worth considering these older models as they are helpful in understanding how the converged solution arose.

The IASB's main focus of its original proposals was to ensure that the provision for credit losses builds up over the life of loans, rather than in lumps as with IAS 39. Building up provisions over time is consistent with the economics of lending in that a premium for the risk of non-payment is embedded in the interest that the lender charges the borrower and this is earned over time. This concept introduced what is now referred to as a time apportionment approach. Some constituents have observed that the IASB's approach centres on the income statement, not on the recoverability of the asset in the balance sheet.

Some raised concerns that it would not result in an adequate level of provisioning, especially in the case of assets with an early loss pattern, as the actual amount of non-payment by the borrower at a given date might be more than the amount that has been provided for at that date. For some this was counterintuitive as in certain circumstances, it could result in lower provisions than under the incurred loss approach in IAS 39.

The FASB's main focus in its original proposals was that the impairment allowance should reflect all credit losses expected over the life of the instrument based on information that is available at the measurement date. This approach ensures that the allowance balance is sufficient to cover all estimated credit losses, regardless of the timing of those losses. However, it also meant that all expected credit losses on day one of an asset's life would be provided for, thereby creating an immediate loss. Some constituents observed that the FASB's approach centres on the balance sheet, rather than the income statement, as the primary concern is whether the asset is recoverable. For some, the proposal was inconsistent with the economics of lending as it front loads all the losses at the date of lending even though economically, when the loan is made the lender has not yet suffered a credit loss.

Concerns in relation to operational difficulties featured heavily in the comment letters received by the IASB in response to its proposals. This is reflected in the fact that the model in the Supplement is an attempt to create an approach that is operational and relatively simple to implement by a range of entities. It is also reflected in the fact that a large number of the questions in the invitation to comment that forms part of the Supplement relate to how operational various elements of the approach might be.

As a result of feedback on the previous EDs and the appetite for a converged outcome, the Supplement proposes a model that combines certain elements of both the IASB only and FASB only approach and also attempts to provide an operational solution.

A tale of two books

The model proposed in the Supplement attempts to 'square the circle' by introducing a time apportionment approach to build up losses over the life of assets, yet also tries to ensure that when losses have actually been incurred, the provision is sufficient to cover these losses. It does this by differentiating assets into two books: the "good book" and the "bad book" (alternatively, this can be thought of as performing and non-performing loans). For assets in the "good book", the Supplement proposes that amounts of the impairment allowance would be the higher of:

  1. Lifetime expected credit losses time apportioned over the remaining life of the portfolio; and
  2. The credit losses expected to occur within the foreseeable future on assets in the portfolio ("floor").

When an asset is transferred from a "good book" to a "bad book" all remaining expected credit losses are recognised immediately.

The inclusion of the floor as the minimum allowance for the "good book" (equal to the credit losses expected to occur in the foreseeable future) addresses concerns over insufficient provisioning raised in relation to the IASB's initial proposals. It also introduces an element of the FASB approach (of immediate recognition of expected credit losses) albeit limited to a time horizon of the foreseeable future. The presence of the floor also means that the increase in allowances for asset transfers from the "good book" to the "bad book" will not be as extreme as would otherwise be the case. This will be particularly true when the foreseeable future equates to all or substantially all of the remaining life of the assets.

Which assets go in the "good" and "bad" book will depend on management's expectations about the collectability of the cash flows of the financial asset. An asset would be transferred to the "bad book" when the credit risk management objective of the entity changes from receiving contractual payments from the debtor to recovery of all or a portion of the financial asset. The proposed application guidance provides a number of indicators based on credit risk management activity that would suggest when this is the case.

Decoupling and flexibility

The IASB's original proposals were very prescriptive in setting out how entities should spread expected credit losses over the life of the assets, through the effective interest rate calculation. The Supplement deals with establishing the level of the allowance account separately from the determination of the effective interest rate, thereby endorsing calls for the IASB to pursue a "decoupled" approach. The Supplement allows instead the calculation of the time proportional expected credit losses in three ways; spreading either the discounted or undiscounted estimated credit losses on a straight line basis over the expected life of the portfolio, or spreading the estimated losses using an annuity approach – converting the credit losses into annuities based on the portfolio's expected life and accumulating these annuities for the portfolio's age. The Supplement also allows the use of any reasonable discount rate between the risk free rate and the effective interest rate. This flexibility is another result of the IASB's attempts to address the operational concerns raised in response to its initial proposals.

Further questions

The proposed text of the requirements certainly has the merit of being brief. For what is arguably a complex area of accounting, the proposals are contained in only three proposed paragraphs in the main body of the standard with 16 paragraphs of application guidance and some illustrative examples. Whilst this is in keeping with the IASB's aim to create principle based standards, the current guidance does appear to leave some important questions unanswered.

For example, it is unclear whether "expected credit losses in the foreseeable future" means cash flows contractually due in the foreseeable future that the entity does not expect to receive, or losses that are expected to be incurred in the foreseeable future (i.e. losses that are incurred in the foreseeable future but where the related cash flows may contractually be due beyond the foreseeable future).

One area that has raised concerns is how "foreseeable future" should be interpreted. The Supplement does not provide a specific time period, rather defining it as "a future time period for which specific projections of events and conditions are possible and the amount of credit losses can be reasonably estimated". Knowing which expected losses arise in the foreseeable future and those that arise beyond the foreseeable future will be especially important given that expected credit losses will need to be estimated for both periods. With shortterm borrowing these time periods might be the same, for other loans they may not.

The differentiation between the "good book" and "bad book" is likely to find favour in some quarters if it aligns itself with current credit risk management practices. Whilst clearly applicable to originated loans, the concept may not be as easily understandable when applied to securities and purchased portfolios of distressed debt.

Presentation and disclosure requirements

The FASB has yet to consider the presentation and disclosure aspects of impairment, but the IASB has proposed presentation and disclosure requirements related to the proposals in the Supplement in an appendix.

In keeping with a "decoupled" approach to establishing allowances within the impairment model, the IASB proposes that interest revenue and impairment losses be presented as separate line items in the statement of comprehensive income.

The proposed disclosures intend to provide financial statement users with information about the allowance account, expected credit loss estimates (including inputs, assumptions, back testing) and internal credit risk management processes. Some of the requirements (about the length of the foreseeable future period) are an attempt to address some of the concerns about the potential for a lack of comparability across entities. Given this and the fact that the efforts in gathering the necessary data may be significant, the proposals are likely to attract substantial comments from both investors (as users of the accounts) and preparers.

Still to come

The scope of the Supplement is limited to open portfolios as these are operationally most challenging, and so the Boards felt that concluding on this first would be fundamental in finalising a Standard. However, the Boards have requested feedback on whether the model would be operational if applied to individual financial assets, closed portfolios, loan commitments and financial guarantee contracts. Were this to be pursued, more guidance would need to be developed on how the model would be applied to those instruments. Significantly, the Supplement is intended to deal only with the timing of recognition of expected losses, not how they are measured. This is still to come.

The work of the Boards is far from done. However, to date they should be credited with taking on the most difficult aspects first and trying to develop a model that is capable of being applied in practice. As of May 2011 the Boards had decided to develop a variation of the previous proposals rather than opting explicitly for any one of them taking into account the feedback from the original EDs and the Supplement. The revised target for the resulting final standard on impairment is now the third quarter of 2011. Meeting this goal is not impossible but will certainly be challenging.

Client money and custody assets – the return

Quite a lot has been written and said recently about the continuing attention to client assets by the FSA and in particular, the protection of client money. While not wishing to repeat what has gone before, it seems appropriate to consider some of the challenges arising from the rules, regulations and requirements coming into force over the next few months.

Unless there is a significant change of heart, a client money and assets return (CMAR) will be required of certain firms from October 2011, courtesy of Consultation Paper (CP) 11/04 and its recently issued Policy Statement (PS) 11/06. Some of us may remember earlier versions of this document from previous regulators. This new CMAR is expected to require firms which qualify as Client Asset Sourcebook (CASS) large firms (more than £1bn in money or more than £100bn in assets) and CASS medium firms (between £1m and £1bn in money or between £10m and £100bn in assets) to submit information relevant to the period from 1 January to 30 June 2011 by 21 July.

If your firm has not been involved in the 'pilot' scheme, perhaps the key question is "do you have systems and procedures to gather the information required to complete this return?" In some cases this question may become "does your third party provider have the systems to provide you with the information to do so?" The FSA estimates there are 400 large and medium CASS firms and 1,200 CASS small firms, so if you fall in the 400 bracket you need to consider the requirements now. Some firms are going to find the information gathering easier than others but no one should leave it until the end of June to see if the information is available. In many cases it will make sense to have a 'dry run' including agreeing internal review procedures and who is responsible for 'sign-off'; for example, will it be the CF10a?

While the return is not applicable at present to CASS small firms (less than £1m in money and less than £10m in assets), such firms do not avoid the obligations altogether and are required to submit details of highest amounts held during the six months to 30 June 2011.

For firms which have permission to hold client money and/or custody assets but do not use the permission, this may be a good time to review their business needs and apply for a variation in permission if client money and/or custody assets are not held.

However if you do hold custody assets, the need to restrict liens on new custody agreements from 1 March 2011 and to have reviewed and if appropriate, re-papered existing agreements by 1 October 2011 needs to be considered. Particular care is needed with agreements for pooled accounts.

Indeed, it is understood that the FSA has had a number of questions raised with it in this area. No answers are forthcoming yet but no doubt your custodian will have already discussed this matter with you if you use pooled account!

A further complication for some firms is the FSA's restriction of 20% on holding client money within the group, which came into force on 1 June 2011. While the principle behind the requirement of avoiding contagion can be seen as sensible, the additional costs have perhaps not been considered fully. The process has been complicated further by reports of some firms being encouraged by the regulator to apply the 20% restriction to all banks where client money is held. A process that some do not see as particularly palatable.

One subject not touched upon as yet is the PS 11/05 on the client assets reports required from a firm's auditors. The policy statement highlights the expectation gap which has developed between the FSA's expectation and the reporting accountant, in respect of such reports. For indeed, the client assets report is a reporting accountant's report which is prepared by a firm that qualifies as a statutory auditor under the Companies Act 2006. It is not, as some have inferred, an audit report on client assets. At least the FSA, the Auditing Practices Board and the profession are getting together to develop appropriate guidance to address this matter.

New taxes on the financial services sector?

The European Commission (EC), G-20, and the International Monetary Fund (IMF) continue to debate the implementation of new taxes or levies on financial services. Indeed, EC policymakers have already gone so far as to state that they are seeking to implement new measures on the sector for several reasons including:

  • increasing public revenues;
  • discouraging certain behaviours within the financial services sector such as excessive speculation which is perceived to have led to the recent financial crisis;
  • raising revenue to be used should another financial crisis occur; and
  • as repayment to the public for the assistance the sector received from Governments during the recent financial crisis.

While no formal decisions have been made and although there are many uncertainties around the exact nature of any tax that may be implemented, it is worthwhile considering the thought processes and discussions to date, and the potentially significant impact of any new tax on the sector.

Background to the taxes

There are two new taxes being discussed. They are:

  • A Financial Transactions Tax (FTT), which is a descendant of the Tobin Tax; and
  • A Financial Activities Tax (FAT).

Both taxes could affect a wide range of businesses including a number outside the financial services sector.

Debate continues across the globe on the political, economic and tax-specific aspects of the proposed taxes. In February the EC issued a Consultation Paper (CP), inviting interested parties to provide their comments on the FTT, FAT and on bank levies. The CP generated 213 responses, from parties ranging from financial services institutions and other businesses, governments, trade unions, NGOs and citizens in general. The EC described this level of response as "considerable," which underscores the importance of this topic to a wide range of stakeholders. Furthermore, the FTT and FAT were the headline topics of discussion at the annual Brussels Tax Forum in late March.

FTT

The proposed FTT would be charged on transactions in certain financial instruments, including stocks, bonds and potentially, currencies and derivatives. This tax would be charged on the value of the transaction, and be applied every time the instrument is traded. Because the tax is on transactions involving financial instruments rather than on businesses in the financial sector, it has the potential to impact those beyond the financial sector, capturing any business that undertakes transactions which are subject to the FTT. The FTT is seen as most effective if it is implemented on a global basis. However, should there be a failure to reach consensus on implementing this tax, it remains possible that it may be rolled out on a country-by-country or pan-EU basis.

FAT

A FAT has been proposed in several forms with each form seeking to tax a business's wages and profit. The FAT is currently considered as having a greater potential to be implemented at an EU rather than global level, and is seen by some as a way to compensate for the VAT exemption on financial services.

The financial sector businesses that could be affected include:

  • banks and similar credit and savings institutions;
  • credit card companies;
  • insurance companies;
  • consumer finance companies;
  • stock brokerages;
  • alternative investment funds;
  • investment/pension funds; and
  • some government sponsored enterprises.

Some EU Member States such as France and Denmark, currently operate taxes similar to the forms of FAT that are being discussed. However, no such tax currently exists on a pan-EU basis.

Bank levies

The introduction of an international bank levy on a global or EU wide basis is also currently in discussion. Again, several options are being examined, including one based on assets and one based on liabilities. No decision has been made on whether to implement a levy, but significant questions remain such as how any new levies would interact with those currently in place in countries such as France, Germany and the UK.

Potential impact on financial services businesses Increased costs

The reality of any new tax or levy is that it could increase a business's costs. Each business would have to decide how to handle this increased cost. It is possible that many businesses could decide to build the tax into its cost base which eventually may translate into higher costs for consumers of financial services, including small-to-medium sized businesses and individuals.

Increased tax and accounting complexity

Introducing new taxes will require many businesses to re-configure their IT systems and introduce procedures to correctly account for new taxes or levies.This will entail the need for additional resources to consider the services and activities in scope and to manage new pricing models, all of which means greater complexity, which could be compounded if the new taxes are not introduced uniformly across jurisdictions. Indeed, if not implemented carefully, issues such as double taxation or determining when and where tax is due that are common to existing taxes like VAT and corporate income tax, could also become a feature of these new taxes.

Business relocation

Even if a new tax is adopted on a pan-EU or G-20 basis, it may be that not all global financial centres will levy the tax. If this were to occur, businesses could be compelled to review their operations in jurisdictions where the tax applies and consider relocating parts or all of their business to countries which are tax-free in order to remain competitive.

What next?

While information is currently limited, businesses in the financial services sector (and potentially businesses outside the sector engaged in financial transactions) should now be having internal discussions on how new taxes or levies could impact them. There is some momentum behind this drive to raise tax revenues from financial services. In March this year, the EU Commissioner for Taxation and Customs Union stated that the financial services sector is a "good candidate" as an innovative source of revenue and that "there is a political and economic case for taxing the financial sector." Furthermore, France is actively advocating the FTT on a global level and earlier this year, the European Parliament voted overwhelmingly in favour of the FTT.

The EC reported that the submissions it received to its CP had a couple of common points. Firstly, the EC stated that there was general agreement amongst the submissions that patchwork measures across the EU posed a problem for the functioning of the internal market, namely in respect of businesses relocating and the risk of double taxation. Another common point was that "improper risk management, improper incentive schemes and extensive deregulation and lax supervision" were reasons for the financial crisis. These common points could form the building blocks of the EC's response to the CP and the measures it eventually proposes.

However, significant political, economic and legislative hurdles still remain on key issues surrounding the proposed measures: which tax to implement; the effectiveness of any tax to achieve the policy goals outlined above; the effect of a new tax on the wider economy (such as employment); and the number of countries which will participate in introducing any new tax. Indeed, the EC characterised the responses it received to its CP as "polarised" depending on the group to which the respondent belonged.

As a result, there is still great uncertainty about whether a consensus on the issue will emerge and there are many steps which need to be taken before any taxes can be implemented.

Nevertheless, what is certain is that discussions are currently taking place, and that there will be developments as a result of the EC CP, potentially in mid July 2011. Commentators also expect this matter to be raised at the G-20 summit in Cannes in November, so watch this space.

Disguised Remuneration

The Employee Benefit Trust – Life in the old dog yet?

The saying goes that you can't teach an old dog new tricks but this cliché may turn out to be unjust when it comes to looking at the future of EBT. The EBT has been a reliable tool in the bonus planning strategies of many investment banks, hedge funds and other financial companies seeking tax-efficient remuneration for their high earners for many years. However, the 9 December 2010 and the introduction of the new "Disguised Remuneration" rules (as previously discussed in our March 2011 edition in the context of the FSA deferral) effectively put an end to the EBT as we knew it in its present form.

Whilst it is evident that Part 7A will be a cornerstone piece of legislation in preventing future avoidance, what effect does it really have on arrangements already in place, and does it really have retrospective or retroactive effect? It does not apply to loans made pre 9 December 2010 or funds 'earmarked' pre 6 April 2011 but future 'relevant steps' are caught. There can be no new allocation of funding of an EBT or Employer-Financed Retirement Benefit Schemes (EFRBS) as this will be a taxable 'earmarking' event. Any investment return on existing assets is protected, however, which provides valuable benefit for many beneficiaries with existing assets held in EBTs.

The future of existing EBT – the good news...

Existing trusts still have their uses in that they can provide tax efficiencies for existing assets. The fact that investment returns can roll up tax free if structured appropriately should not be underestimated when using an EBT for a long term savings plan or estate planning for the next generation. Alternatively, gains can be accrued until tax rates are reduced (whether due to changing general rates or changes in personal circumstances) giving the potential for significant savings as compared with an immediate distribution taxable at 50% and the related national insurance contribution liabilities.

An EBT is still protected for Inheritance Tax purposes and falls outside of an individual's estate (although the latest HM Revenue & Customs (HMRC) Brief 18/11 sets out their view on this in relation to certain sub-funds), so there remains advantages in using the EBT for estate planning for the next generation. Distributions to beneficiaries after death will be taxed at the recipient's marginal rate which may be lower than that of the employee. If there is no beneficiary who can receive distributions then payments received by the employee's personal representatives will be subject to the 20% lower rate of tax.

An alternative strategy would be to refine the use of the EBT where it is possible to do so without creating an 'earmarking' event so that it can make pension payments. Pension payments are specifically protected from tax under the new rules when they are charged separately as pension income. This has several benefits where pension is paid from outside the UK:

  • Non domiciled individuals paying UK tax on a remittance basis should only be taxed on amounts remitted to the UK.
  • UK domiciled individuals should benefit from the 10% abatement available for overseas pensions.
  • In appropriate circumstances, treaty relief for pension payments may be available.

In addition, lump sums may have protection from the new rules where they result from a specific right existing before 6 April 2011, although the scope of this protection with the requirement for a specific pre-existing right is not totally clear. As a result, some lump sums may be taxed under general pension rules, arguably even if the recipient is non resident. This would be a problem where the beneficiary is not resident in a reciprocal treaty country and cannot alleviate any double tax charges that could arise.

Distributions from the EBT could be subject to National Insurance Contributions (NIC) even if pension income is paid to beneficiaries. There would be an exemption if benefits provided are in line with the payment profile permitted under a UK registered plan. There would also be protection from NIC on payments if a beneficiary has been outside of the UK for 52 weeks (subject to Reciprocal Agreement or EU rules), the payment is post death, or the employee is aged over 65 (although the latter provides exemption from employee NIC only). Separate regulations will be laid down in order to exclude overseas regulated and tax-relieved schemes from the disguised remuneration but we have yet to see the detail and extent of these exemptions.

...and the bad

Although there may still to be a future for EBTs in the new environment, HMRC are continuing to challenge them on the basis that PAYE should have been paid on contributions to the trust (as set out in their Spotlight 5 article). Whilst our view is that such challenges should not succeed with a properly established and operated trust, some companies may wish to settle liabilities in order to ensure that any ongoing risks are eliminated and to minimise further interest accruing and avoid the management time involved in an enquiry. If this is the case, the new legislation does at least provide that there will be a credit for any amount taxable under the settlement against future amounts taxable under Part 7A, where a formal settlement agreement is entered into with HMRC. This has been reinforced in a recent briefing issued by HMRC designed to encourage settlement of historic EBTs.

As you can see from the above there is no need to wind up any existing EBT just yet as with a little care and attention they could continue to offer value for a few years longer, but performing a different role and with an altered emphasis on long term thinking. If however, HMRC's current enquiries do yield a suitable test case which they can take to the tribunal, they may then use any favourable result to apply further pressure on companies with EBT. In this environment, companies which have set up EBTs (and which might be subject to ongoing PAYE and NIC exposures under the new legislation), beneficiaries and trustees need to have a full understanding of the legislation, the various traps for the unwary and how trusts need to be operated in order to ensure that unexpected liabilities don't materialise.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.