Double full stop
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Towards more picturesque speech™
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A sure sign a document has had a tortured gestation, during which it was feasted on by legal eagles from all quarters but — critically — before all was said and done deal fatigue set in, most of them lost interest, and someone said, “O.K., hang it, let’s just sign the damn thing.”
What is left is a tract with all the usual tedious legal tropes but unusually strewn with unextinguished blobs, square brackets and miscellaneous harmless typos, the most feckless of which is the double full stop[[..]]
The double full stop is a mis-punctuation unusually acute in its bathos. It says, “this mattered to me once, but I am past caring. Just deliver me from this godforsaken project. Let me go.”
A celebrated example comes from the Cayman Islands Monetary Authority’s recent, bished, attempt to update its rules on asset segregation for investment funds. I know what you are thinking: Be still, my beating heart.
Now you can imagine, as no doubt CIMA did, that such a project was hardly calculated to attract world-wide attention. Perhaps they assigned it to their newest member, by way of initiation ritual, or as a practical joke, or an earnest means of learning the ropes. We speculate.
In any weather, the new rules start off brightly enough:
- “5.2. The Portfolio must be segregated and accounted for separately from any assets of any Service Provider.”
It does not take long for things to take a darker turn. Just a few paragraphs down the rules remark almost by way of marginal note:
- 5.5. The overriding requirement of Rule 5.2 is that a Fund must ensure that none of its Service Providers use the Portfolio to finance their own or any other operations in any way.
We do not need even to pause to observe that, on its face, this is nothing like the overriding goal of Rule 5.2, which says nothing of the kind. Rule 5.2 asks custodians not to commingle client and house assets; an entirely workaday affordance that, to any half-way competent trust and agency professional would hardly need be said. Instead Rule 5.5 seems seems to prohibit any service provider from rehypothecating assets. In a business as heavily dependent on margin lending as the Cayman Hedge Fund industry, this is quite the bolt from the blue.
Of course this was not what CIMA meant at all, and there followed a hasty “reverse ferret” wherein websites were updated, guidance reissued, correspondence clarified,