Global regulation 2011: a review of policies that shaped the business world
Jan. 10 (Business Law Currents) — Global regulators have been anything but idle in 2011. Predictably, the U.S. regulatory landscape was dominated by the 800-lb. statutory gorilla, the Dodd-Frank Act. Canada busied itself trying to accommodate Basel III’s coming capital requirements. Anti-bribery regulation managed to elbow its way into UK headlines in spite of a phone hacking scandal and a royal wedding. China cracked down on loopholes for variable interest entities, while Australia’s new tax regime found few friends in the mining sector down under. (more…)
Ten things UK/EU compliance officers must do in 2012
By Susannah Hammond
LONDON, Jan. 9 (Thomson Reuters Accelus) – This year will be a year of clarifying, evaluating and beginning to implement the practical detail that underpins the sweep of regulatory change due in 2012 and beyond. The changes are not limited to the rulebooks but encompass the regulatory bodies, required structural changes (to banks in particular), the identification of systemic financial services firms and, last but not least, changes to the regulatory perimeter.
Last year saw compliance officers undertake fundamental regulatory reviews and maintenance, as well as ensure the map of their businesses and employees was accurate and that there were effective mechanisms in place to keep it up to date.
The strategic success for a firm faced with the changes due in 2012 will depend on the strength of the foundations on which it is built. As all experienced compliance officers know, one cannot implement change if one does not have an accurate map to build on. Here are 10 things that compliance officers must consider in 2012.
1. Know who is going to regulate you
For some firms the answer may well appear to be both self-evident and unchanged, but there are numerous changes ahead both for individual jurisdictions and on an extra-territorial basis.
In the UK for instance there is the well-publicised split up of the Financial Services Authority (FSA). Firms should have already begun to assess whether they are to be regulated by the Prudential Regulatory Authority (PRA) as well as the Financial Conduct Authority (FCA).
Global disclosure 2011 review: trends and new mandates in public filings
By John Mackie
NEW YORK, Dec. 22 (Business Law Currents) – The global push for increased transparency by public issuers continued in 2011, with developments on a number of fronts. U.S disclosure trends included Dodd-Frank related mandates and event-driven disclosures. Canada continued to refine its disclosure regime, seeing voices weigh in from the Canadian Securities Administrators and the Supreme Court. Regulators in the UK, meanwhile, pressed issuers to emphasize clarity over quantity in their disclosures. Business Law Currents takes a closer look at the global disclosure picture in 2011, highlighting this year’s trends, developments, concerns and challenges.
Among the hot disclosure topics for 2011 were Chinese issuers, the natural disasters in Japan, and the regulation of credit rating agencies. On a regional basis, the Supreme Courts in both the U.S. and Canada provided their thoughts regarding materiality assessments in a disclosure context. (more…)
Killing dead flies with a sledgehammer: SEC proceedings against already defunct companies
By Morris Simkin, Thomson Reuters Accelus contributing author
NEW YORK, Dec. 22 (Thomson Reuters Accelus) – I was recently involved in a case brought by the Securities and Exchange Commission to revoke the registration of a company’s common stock. But the company’s publicly held common stock had been revoked by a bankruptcy court order issued some seven years before the SEC proceeding began.
This piqued my curiosity. Why was the SEC bringing this proceeding, and how many other similar cases had they brought? How much was this costing the public — both in terms of SEC staff time and other enforcement opportunities lost because the staff was pursuing these companies? And were there better ways to get the same result? (more…)
Fed’s capital proposal not as tough as feared, may give U.S. banks advantage
By Rachel Wolcott
NEW YORK/LONDON, Dec. 22 (Thomson Reuters Accelus) - Considering the cost of the financial crisis to the American taxpayer — anywhere between $700 billion and $12.8 trillion depending on who you talk to — the proposed capital rules the Federal Reserve published yesterday seem pretty lenient, compare to those mooted by some European countries.
However, it is a certainty that the same U.S. bank CEOs who have been so vociferous in their criticism of any increase in capital requirements, will continue their efforts to pare down the amount of capital they are required to hold. (more…)
Basel I, II and III all presuppose that ex-ante risk perceptions are correct and therefore, by means of low risk-weights, allow for very little bank capital when lending to what is perceive as “not-risky”… like triple-A rated securities and infallible sovereigns!
That is loony because there has never ever been a bank crisis resulting from excessive exposure to what ex-ante is perceived as risky… they all have resulted from excessive exposures to what ex-ante was perceived as absolutely not risky.
When will the regulators understand that their duty is to regulate for the possibility that the ex-ante perceptions about risk-turn out to be wrong?
If the moderator allows it here is a video that explains how the regulators rewarded the banks for not taking risks and thereby caused the safe-havens to be dangerously overcrowded http://bit.ly/dFRiMs
MF Global trustee reviewing firm’s practice of repledging collateral
By Emmanuel Olaoye and Christopher Elias
NEW YORK/LONDON, Dec. 21 (Thomson Reuters Accelus) - The bankruptcy trustee for collapsed U.S. brokerage firm MF Global Inc. is looking into how the firm re-pledged customer collateral as part of its search for $1.2 billion of missing customer funds.
The practice, called re-hypothecation, has drawn renewed scrutiny after the failure of MF Global and experts said U.S. regulators may face new restrictions as part of efforts to increase protection on customer accounts. (more…)
U.S. financial services can expect more Dodd-Frank in 2012, not less
By Rachel Wolcott
NEW YORK, Dec.16 (Thomson Reuters Accelus) – When congressman Barney Frank announced he would not seek another term, enemies were quick to predict the demise of the wide-ranging financial reform act that the Massachusetts Democrat penned with former Connecticut Senator Chris Dodd. These pronouncements are not just premature, but according to regulatory experts, probably wrong. Unless there is a real seismic political shift to the right after the 2012 elections, they say, the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 will survive, perhaps with a little tinkering, and firms had better be prepared to deal with it.
Dodd-Frank will only face a real threat if the Republicans take the White House and a majority in the U.S. Senate, while hanging on to the House of Representatives. Right now, with former House Speaker Newt Gingrich the latest to surge to the top of the Republican pack of presidential candidates, the likely outcome of November presidential elections is far from clear. If President Barack Obama, who signed Dodd Frank into law, stays in office, he can use his veto power to try to protect Dodd-Frank. (more…)
Regulatory round-up — U.S. rules to know in 2012
By Nick Paraskeva
NEW YORK, Dec. 16 (Thomson Reuters Accelus) – Several recently adopted rules in the U.S. are going into effect for specific types of firms in 2012. These rules include ones released by the Securities and Exchange Commission, Commodity Futures Trading Commission and Federal Reserve, issued to implement the Dodd-Frank Act and as a response to market developments.
The SEC-adopted rules requiring reporting by advisers to hedge funds and by large traders of securities are explained below. We also cover the CFTC final rules on derivative clearing firms in the swaps market and provide a summary of the Fed’s final rules on living wills for large banks, and non-bank systemically important financial institutions (SIFIs), under the Dodd-Frank Act. (more…)
FATCA tax law has bigger impact on foreign than U.S. firms
NEW YORK, (Thomson Reuters Accelus) - The soon-to-be-implemented U.S. Foreign Account Tax Compliance Act, or FATCA, will have a bigger impact on foreign financial institutions than on U.S. ones, financial industry participants were told at a panel discussion on the law, which is placing new duties on compliance officers.
The event was hosted by the Securities Industry and Financial Markets Association (SIFMA) and conducted by the group’s Operations & Technology Society’s–Securities Operations Section, reflecting the role that staff in the operations units of firms were expected to have in meeting FATCA provisions. (more…)
Cost-benefit lawsuits snarl Dodd-Frank implementation
By Nick Paraskeva
NEW YORK/WASHINGTON, (Thomson Reuters Accelus) – A financial industry lawsuit seeking to block new U.S. rules on commodity position limits on the grounds that they lack an adequate cost-benefit analysis could cause regulators to slow their implementation of the Dodd-Frank financial regulatory overhaul and be an indicator of more such challenges. Meanwhile, the Obama administration is saying it will resist efforts to block the law. (more…)
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