Financial Regulatory Forum
U.S. corporate shareholders gain more (frequent) say-on-pay (Westlaw Business)
By Erik Krusch
Feb. 2 (Westlaw Business) – Dodd-Frank and SEC-bolstered shareholders officially have a say on company pay. The SEC recently adopted rules requiring companies to hold say-on-pay, say-on-pay frequency, and golden parachute approval votes. Companies from Deere & Co. and Apple to Johnson Controls and Monsanto’s proxies are drafted, filed and poised to comply with the new rules. Companies and shareholders, however, still have plenty to hash out around the mechanics of executive compensation votes this proxy season. (more…)
US Fed cash-flow data called underused weapon in war on drugs (Complinet Special Report)
By Brett Wolf, Complinet
ST. LOUIS, Jan. 31 – The consumption of illegal drugs generates tens of billions of dollars for Mexico’s drug cartels each year, and the fight against it creates significant challenges for those who oversee and participate in the US financial system. The river of money flows into Mexico mostly in the form of cash, often hidden in secret vehicle compartments. The money feeds cartel operations and stokes conflicts with the government and with rivals that have killed an estimated 35,000 people during the past four years. US authorities have bolstered their efforts to halt the cross-border cash shipments, but their progress has been limited. Policymakers are desperately searching for better ways to fight the flow.
An investigation by Complinet has revealed details of how the money flows, and a potentially underused tool: the closely held “country flow” data maintained by the New York Federal Reserve Bank. The records, only recently made public, document the international flow of US cash and could help to illuminate the shadowy paths taken by drug money. They are so closely guarded, however, that experts say the ground-level investigators who could make the best use of it never see it, and the issue is so sensitive most government officials are unwilling to talk about it for attribution.
We all have our victories and defeats as regards fear, but most of us strive not to let fear rule our hearts or our choices. Being free means being free to live and love as if death had no power over us. It is our ethical and moral duty to expose blind hate and ignorance by shining eternal light and love, sending fear and hatred fleeing back to the shadows from whence it came.
We explore outer space with various forms of space craft, but many choose to explore inner space via nature’s abundant chemistry – an infinite journey into the heart of God. Whatever, we are here to explore this glorious universe. The Prohibitionist’s brand of hateful, choking pseudo-Conservatism is the antithesis of all that. Like a lion who cannot grasp that he can do more than walk in a circle the size of the cage he’s been freed from, the prohibitionist is incapable of exploration beyond the boundaries of his own fear, prejudice and loathing. We are all free to choose how we walk our own path, but when we choose to go beyond this by supporting drug-war demagoguery, to the point of even threatening others with imprisonment and physical violence, we loose the right to expect any form of respect from the once free and prosperous society that we are helping to totally destroy.
We’re about to lose all semblance of that once ordered, prosperous and safe society. Myself, along with many others, have been debating prohibitionists on this for many years. We have shown what destruction prohibition has wrought on all the civil institutions of this once great nation, -we’ve always provided facts and statistics – they, the prohibitionists, have countered with either lies, personal abuse or even serious threats of violence.
Ending the insanity of drug prohibition by legalized regulation, respecting the rights of the responsible users and focusing on addiction as a sickness, like we do with alcohol and tobacco, will save the U.S. economy along with countless lives and livelihoods. Prohibition continues unabated for shameful political reasons. It cannot, and never will, reduce drug use or addiction.
Reputation risk may outweigh fines in UK financial regulator enforcements (Complinet)
By Joanne Wallen (Complinet)
Jan. 25 – British firms continue to be referred to enforcement despite the best intentions of the Financial Services Authority’s thematic reviews and credible deterrence strategies. On the one hand it looks as though the risks are considered to be worth taking. On the other, reputational damage and loss of trust for the whole industry are at stake.
Last week was overshadowed by the large fine that Barclays received for giving unsuitable investment advice to retail clients about two funds in particular. The fine was 7 million pounds, and the firm is also likely to have to pay up to 60 million pounds in redress, as well as carrying out a past business review and employing a firm of accountants to review customer files. The total cost of the enforcement action will, therefore, be significant.
Compared with the amount of investment a large firm would have to make to consolidate all its legacy systems into one, to revamp all its systems and controls throughout the entire group, to beef up its compliance team and to ensure that every member of staff was properly trained, the costs may not be so high after all.
Equality provisions fail to add up in UK boardrooms (Westlaw Business)
By Christopher Elias
Jan. 27 (Westlaw Business) With annual meeting season just around the corner in the UK, attention is once again turning to corporate governance issues and in particular, board composition, as a recent report from Cranfield University reveals that only 12.5% of FTSE 100 directorships are held by women.
With an overhaul of discrimination law provided by the Equality Act 2010, the importance of gender diversity in boardrooms has never been more profound and the new act strives to achieve better gender equality in companies among other things.
Recent developments seem to suggest, however, that the UK government has stepped back from imposing the full force of the act and will not be imposing mandatory gender quotas or compulsory gender pay reporting – bad news for Cranfield University who produced a damning report on gender diversity in FTSE 100 companies recently. (more…)
ANALYSIS-Companies could get caught in Asia as corruption rules tighten
By Rachel Armstrong
SINGAPORE, Jan 20 (Reuters) – Multinational firms trying to get a bigger piece of the Asia growth story face a rising risk of becoming embroiled in corruption scandals unless they enforce stricter compliance norms and new regulations.
The region may have moved centre stage in many companies’ growth strategies as developed economies struggle but firms are also scrutinising investment projects even more and stepping up due diligence before jumping into new joint ventures and M&A. (more…)
China-U.S. IPOs: China’s forex crackdown locks up currency (Westlaw Business)
By Helen H. Chan
HONG KONG, Jan. 21 (Westlaw Business) – Excessive liquidity is becoming a hot potato for the State Administration of Foreign Exchange (SAFE), China’s forex regulator. Recently, SAFE announced that it would continue to crack down on “hot money” inflows through vigilant monitoring of cross-border transactions. In particular, China’s currency watchdog will examine whether foreign exchange destined for the PRC are being used in compliance with Chinese laws.
In its ongoing battle against inflation, the Chinese government has been scrutinizing compliance with existing forex regulations, many of which apply to the daily operations of overseas listed Chinese companies. In response to the clampdown, Sino-U.S. companies have highlighted a number of foreign exchange transfer risks in recent disclosure filings. (more…)
ANALYSIS-U.S. trading probe reveals the temptations for ‘experts’
By Emily Chasan and Liana Baker
NEW YORK, Jan 21 (Reuters) – Expert network firms, currently the focus of a major U.S. insider trading investigation, have never had to work too hard to find midlevel corporate executives willing to moonlight as paid consultants.
With consultants earning anywhere from $200 to $1,000 an hour for a meeting with hedge fund traders, working for an expert network firm — an intermediary company that matches industry consultants with hedge funds — is an easy way for executives to pad their bank accounts. (more…)
ANALYSIS-New U.S. funds regulator at SEC must shed Goldman skin
By Ross Kerber and Sarah N. Lynch
BOSTON/WASHINGTON, Jan 19 (Reuters) – For U.S. Securities and Exchange Commission Chairman Mary Schapiro, the choice of a Goldman Sachs Group insider as her new top funds regulator could be a double-edged sword.
Eileen Rominger will have to prove she can be a neutral regulator of the industry from which she came. She spent the past 11 years at Goldman Sachs, most recently as chief investment officer of Goldman’s asset management unit before announcing her retirement in September. (more…)
Get Shorty: Europe’s Crackdown on Short Selling (Westlaw Business)
By Christopher Elias, (Westlaw Business)
Radical changes to Europe’s system of financial regulation are under way and with them a harmonisation of securities rules as Europe turns a corner on the drive to create a single European Securities and Markets Authority with more stringent disclosure requirements. But with not all European regulators striking the same note, the move for greater scrutiny and heightened disclosure expectations over short selling and shareholdings is making sluggish progress forward. (more…)
Hong Kong exchange sketches proposal for corporate governance facelift (Westlaw Business)
By Helen H. Chan, Westlaw Business
Regulators of the Hong Kong’s bourse have embarked on a mission to make over the city’s policies on corporate governance. Citing the still-felt effects of the global financial crisis, the Hong Kong Exchange and Clearing Limited (HKEx) previously acknowledged the need to further clarify and refine Hong Kong’s corporate governance framework for listed issuers in the jurisdiction. Putting its observations into action, the regulator recently commenced a public consultation, soliciting market opinion on proposed amendments to Hong Kong’s Code on Corporate Governance Practices and the Rules Governing the Listings of Securities. (more…)