Financial Regulatory Forum

Equality provisions fail to add up in UK boardrooms (Westlaw Business)

 Burberry CEO Angela Ahrendts leads a discussion at the IHT Heritage Luxury conference in London 09/11/2010By 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)

Chinese 100 yuan banknote is seen in this picture illustration taken in Shanghai January 19, 2011. REUTERS/Aly SongBy 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

The headquarters of the U.S. Securities and Exchange Commission (SEC) are seen in Washington, July 6, 2009. REUTERS/Jim Bourg (UNITED STATES BUSINESS POLITICS)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)

People walk in front of a shop of French luxury fashion brand Louis Vuitton decorated for the Christmas holiday season in Bordeaux, south-western France, December 23, 2009. REUTERS/Regis DuvignauBy 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)

Hong Kong 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…)

Who will run the European Supervisory Authorities day-to-day? (Complinet)

By Peter Elstob, Complinet

Sometimes the crudest calculations can be the most helpful. Despite official protestations, it is a fairly safe assumption that the permanent positions that have been announced so far at the three European Supervisory Authorities have effectively been shared out among member states, with some weighting for their importance as financial centres. If a slightly shakier assumption is entertained, namely that the three executive directors, whose job it will be to run the ESAs’ day-to-day operations, will be chosen on a similar basis (although perhaps with individual qualities and qualifications playing a more important part), it is possible to make some educated guesses about the nationalities, and maybe the identities, of those who will fill these important roles. (more…)

Links to CDS measures growing common in bank credit deals (Westlaw Business)

The American International Group (AIG) building is seen in New York, March 24, 2009. REUTERS/Shannon StapletonBy Erik Krusch

Jan. 10 (Westlaw Business) –  Credit terms are loosening, but lenders are still after their proverbial pound of flesh. Consider AIG and AT&T’s recent credit agreements, which link each loan’s interest rate to the corporations’ credit default swaps (CDS). Lenders are also insulating themselves from risk with London Interbank Offered Rate (LIBOR) floors, such as the one undergirding healthcare technology company MedAssets’ recent term loan. In a similar vein, bankers installed an original issue discount (OID) in construction materials maker Armstrong World Industries’ recent term loan. Lenders are doing their due diligence and weighing risks in order to concoct the right mix of interest rate terms in hopes of protecting their capital going forward. (more…)

FDIC SunFirst action a reminder of third-party processor risk to banks (Complinet)

By Brett Wolf, Complinet

An enforcement action brought by the Federal Deposit Insurance Corporation against SunFirst Bank, of Utah, has provided a stark reminder of the legal and regulatory obligations that firms face when dealing with third-party payment processors. Third-party payment processors, sometimes known as TPPPs, are bank customers who use their accounts to process payments for merchant clients. They are a growing concern for banks, in no small part because they have of late attracted the attention of regulators and the U.S. Department of Justice. (more…)

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