Terms of business
If you are a broker-dealer, your basic terms for handling orders and stuff. The theory is that are mostly harmless, and brokers bang them out at the inception of the relationship, if the client even notices them they get stuck in a draw and no-one ever thinks about them again. A client’s reaction to a broker’s terms of business is a good gauge in how overstaffed that client’s legal department is. In these austere times it is quite a comfort to see that cost cutting hasn’t hit all of the mediocre lawyer’s favourite habitats.
In the US, the brokers tend not to have TOBs because they rely on the Uniform Commercial Code. In EMEA, banks and brokers tend to have written terms of business, if for no other reason because MiFID 2 imposes quite a lot of basic requirements. Each time ESMA updates MiFID dear old Simmons & Simmons kicks off a really hilarious[1] game where they gee their institutional asset manager clients up into a frenzy about how outrageous their broker]]s’ terms of business are, and present them with a nineteen page generic letter of rebuttal. This causes a 9 month paper war which is redolent of — and about as much of a waste of time, effort and young lives as — the trench warfare in Belgium in World War I.
In fairness, the brokers don't help themselves with their TOTALLY ABSURD terms of buisness. Nomura and Morgan Stanley check in at something like 80 pages.
and that's before we even get into arguments about whether we need a sovereign immunity waiver clause or to appoint a process agent.
Hold these truths as self-evident:
- No-one has ever sued, or been sued, on the basis of terms of business.
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- ↑ Like really hilarious. I can’t tell you how fun it is.