Financial Regulatory Forum

INTERVIEW: Volcker Rule, derivatives in U.S. business lobby’s sights for new year

By Emmanuel Olaoye, Compliance Complete

WASHINGTON, Dec. 24 (Thomson Reuters Accelus) - The U.S. Chamber of Commerce has been a leader in contesting U.S. regulators’ implementation of the Dodd-Frank Act. Lawsuits challenging the Securities and Exchange Commission and Commodity Futures Trading Commission over the justification for the rules have stopped some rules in their tracks and forced the regulators to hire more economic analysts.

With a new Congress due to start on January 3, Compliance Complete sat down with three senior officials at the Chamber to discuss their priority issues for 2013. These include the Volcker rule banning risky trading by banks, exemptions for non-financial users of derivatives, the role of the Financial Stability Oversight Council in money-market fund reform. (more…)

UBS felony plea in Libor deal ushers in tougher enforcement era

By Nick Paraskeva, Compliance Complete contributor

NEW YORK, Dec. 21 (Thomson Reuters Accelus) - The UBS felony fraud plea for manipulating reporting of the Libor interbank lending rate marks a regulatory turning point towards tougher enforcement. After the U.S. election confirmed Dodd-Frank is here to stay, and with most Group of 20 reforms mapped out, rulemaking will proceed at a slower pace. The shift will impact the financial-industry, both in the U.S. and globally, which will face a greater supervisory willingness to impose high penalties, and a focus on ethical compliance.

“Today’s announcement – and $1.5 billion global resolution – underscores the Justice Department’s firm commitment to investigating and prosecuting such conduct, and to holding perpetrators of these crimes accountable for their actions,” said U.S. Attorney General Eric Holder in announcing the deal this week. His involvement in the enforcement was notable, as previous announcements have been made by Assistant Attorney General Lanny Breuer. (more…)

Dos and don’ts on handling a regulatory investigation

By Stuart Gittleman, Compliance Complete

NEW YORK, Dec. 21 (Thomson Reuters Accelus) - A “highly polarized (and) politicized environment” had made the job of defending against a regulatory investigation particularly challenging, Lawrence Zweifach, a Gibson Dunn law partner, told attendees at a New York City Bar Association program last week. But there are steps a firm can to take to face the challenges.

The high-pressured atmosphere is affecting judges, regulators and legislators, and leading to cases “that will not stand up in the long run” to be brought, said Andrew Levander, a Dechert law partner. (more…)

Shorter securities settlements cycles to be introduced in Europe

By Marianne Brown, Thomson Reuters Accelus contributor

LONDON, Dec. 19 (Thomson Reuters Accelus) – Earlier this year, the European Commission published its proposals for the regulation of central securities depositories (CSDs), the entities that operate settlement systems. The proposals, known as the Central Securities Depositories Regulation (CSDR), seek to improve settlement efficiency across European markets, and are currently working their way through the European Parliament and Council. (more…)

CFTC adopts final rule requiring firms to save their oral communications

By Emmanuel Olaoye, Compliance Complete

WASHINGTON/NEW YORK, Dec. 19 (Thomson Reuters Accelus) – The Commodity Futures Trading Commission on Monday approved a final rule that would require firms registered with the agency to record the oral communications of their brokers for up to a year.

Firms would have to start recording conversations on telephones, voicemail, cell-phones and other media if they trade in a “commodity interest”.  (more…)

Global firms facing challenges of shifting regulations, their top lawyers say

By Stuart Gittleman, Compliance Complete

NEW YORK, Dec. 13 (Thomson Reuters Accelus) - The “shifting sands” of regulation, especially since the onset of the financial crisis, are making it more challenging for U.S. public companies to conduct global operations, the top lawyers for three such companies said Friday.

The general counsels – Andrew Bonzani of Interpublic Group, Peter J. Ganz of Ashland Inc. and Elizabeth M. Sacksteder of Citigroup – spoke at the Institute for Corporate Counsel, which was cosponsored by Thomson Reuters and the New York City Bar Association. (more…)

Less drug-money traffic at HSBC may mean more risk for other banks in U.S.

By Brett Wolf, Compliance Complete

NEW YORK, Dec. 13 (Thomson Reuters Accelus) – HSBC was a hotspot for Mexican drug traffickers trying to launder the proceeds of their illicit U.S. sales during the 2000s, as suggested by a Senate report released in July and verified by a deferred prosecution agreement announced by the Justice Department on Tuesday. But now that the British banking giant has been forced to take steps to clean up its anti-money laundering act, Mexican cartels are making moves that may mean more risk for other banks, sources said.

Eager to move cash through the teller windows of HSBC’s Mexico unit in the largest amounts possible — sometimes as much as hundreds of thousands of dollars per day — drug traffickers designed specially shaped boxes, a document released by the Justice Department on Tuesday states. Once the cash was in HSBC accounts, brokers wired it to exporters in New York City and elsewhere in the United States as payment for goods destined for Colombian businesses, according to a”statement of facts” that was filed in federal court in Brooklyn along with a deferred prosecution agreement (DPA). (more…)

Internal compliance reporting programs must consider motivations for acting, experts say

By Stuart Gittleman, Compliance Complete

NEW YORK, Dec. 10 (Thomson Reuters Accelus) – Preventing fraud, not just reacting once it occurs, should be the goal of every corporate compliance program, but business has a mixed record in encouraging employees to report suspected misconduct internally, speakers at a Thomson Reuters forum said Tuesday.

Preventing fraud and encouraging internal reporting has also been mandatory for public companies since 2002. Among other things, Section 301 of the Sarbanes-Oxley Act requires issuers’ audit committees to establish procedures for employees to confidentially and anonymously submit concerns over questionable accounting or auditing matters. And Section 806 of Sarbanes-Oxley generally prohibits issuers from retaliating against employees for raising these concerns. (more…)

Europe’s naked short selling ban leaves investors with skin in the game

By Christopher Elias

LONDON/NEW YORK, Dec. 4 (Business Law Currents) – New European short selling regulations are dressing naked short sellers in a regulatory straightjacket, but ill-fitting provisions may leave investors with skin in the game.

In force since 1 November 2012, the regulations were supposed to curb naked short selling and to provide transparency on those trading against European sovereign debt. However, with gaps between short selling methods and alternatives popping up in exchange traded futures and synthetic forms, the holes are already becoming apparent. (more…)

Consumer groups see momentum building against more White House authority over regulators

By Emmanuel Olaoye, Compliance Complete

WASHINGTON, Nov. 20 (Thomson Reuters Accelus) - A coalition of public-interest groups is urging Congress to reject a bill that would allow the White House to review major rules proposed by the Securities and Exchange Commission and the Commodities Futures Trading Commission.

The “Independent Agency Regulatory Analysis Act” which was introduced by Republican Senator Rob Portman of Ohio, would give the White House’s Office of Information and Regulatory Affairs the power to ask independent agencies such as the SEC to submit a cost-benefit analysis on “significant rules” or rules that have an economic impact of $100 million.  (more…)

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