innovation in advocacy November 27, 2007
Posted by Bradley in : Uncategorized , comments closedAnd a new initiative from the US Chamber of Commerce. This coming Friday a new series of talks begins, described as follows:
The advocacy world is constantly expanding, to stay ahead join us for the launch of the Innovative Advocacy Series. Hill staffers talk frankly about the advocacy campaigns that grab their attention, and which efforts they often disregard. Hear directly from the people you are trying to reach and find out what really influences a Congressional office from the people who work there.
It’s a snip at $225 for Friday’s event alone and $495 for the series. The series includes 4 events, one of which is on “Amassing a Grassroots Army to Engage in Election 2008”.
us financial regulation: competitiveness, principles… November 27, 2007
Posted by Bradley in : Uncategorized , comments closedThe deadline for comments on the Treasury’s Capital Markets Competitiveness Initiative was last Wednesday. A joint comment letter (links to additional separate comments follow) from the US Chamber of Commerce, SIFMA, Investment Company Institute, Business Roundtable, Financial Services Roundtable, and Financial Services Forum begins:
The undersigned represent the voices of the millions of small and large businesses and their investors across the country and around the world that rely on the U.S. capital markets to fuel their investment and growth activities. Together, we commend the U.S. Department of the Treasury (“Treasury”) on its request for comment on the regulatory structure associated with the financial services industry.
I’m not sure what basis these organizations have for claiming to represent the interests of investors, except the claim, made explicitly later in the letter, that:
Investor protection and prudential safety and soundness must remain essential mandates. At the same time, these must be appropriately balanced with the goals of promoting capital formation and remaining competitive in an increasingly global environment. Indeed, these two priorities are mutually supportive and, appropriately pursued, will serve one another to the benefit of all market participants.
The letter advocates streamlining of the regulatory structure, principles-based regulation, and “addressing the adverse effects of the litigation environment in the U.S.”.
law, finance and translation November 26, 2007
Posted by Bradley in : Uncategorized , comments closedIn the US, whatever an LLP is, it is not incorporated. So it is always striking to note, for example in reading the UK Department for Business, Enterprise and regulatory Reform (BERR) Consultation Document on the application of the Companies Act 2006 to LLPs, that British LLPs are incorporated.
northern rock looks to become virgin November 26, 2007
Posted by Bradley in : Uncategorized , comments closedToday’s Press Release from Northern Rock:
Following receipt of indicative expressions of interest covering a range of options in respect of its business, the Company and its advisors have engaged in discussions with a limited number of selected interested parties to clarify their proposals. As a result, and following discussions with the Tripartite Authorities (the Bank of England, HM Treasury and the Financial Services Authority), the Board has concluded that it wishes to take forward discussions on an accelerated basis with a consortium comprising Virgin Group, WL Ross & Co, Toscafund Asset Management LLP and First Eastern Investment Group (the “Virgin Consortium”).
Richard Branson’s letter to the customers of Northern Rock says:
At the heart of the Virgin proposal is a commitment to:
* Protect the savings of existing Northern Rock customers. The Government’s guarantee arrangements will continue until they are no longer needed
* Put the business on a solid financial footing with a multi-billion pound new equity and funding arrangement
* Stop the business being broken up and disbanded – saving thousands of jobs
* Put in place top quality management with world-class experience of banking
* Continue to support the Northern Rock charitable foundation – which does so much good work.
northern rock support as state aid November 19, 2007
Posted by Bradley in : Uncategorized , comments closedThe UK Treasury announced a set of Principles for Assessing Proposals for the future of Northern Rock. The notes to the press release recognise that existing arrangements fior supporting Northern Rock constitute State Aid (which is regulated by the EU Commission) and that any proposals about the future would need to take account of State Aid rules:
State Aid rules would limit any ongoing public sector involvement even if it otherwise met the Tripartite Authorities’ objectives. Any ongoing State Aid measures beyond those currently in the course of notification to the European Commission would represent a potential risk to value and execution, because the European Commission may impose adverse conditions and may take additional time to approve such State Aid.
Proposals will be assessed against this backdrop, and should demonstrate how they have taken account of the State Aid rules in their development. All other things being equal, any proposal will be viewed favourably in so far as it is not conditional upon European Commission approval of further aid measures.
Meanwhile the Commission has an ongoing consultation on Rescue and Restructuring Aid Guidelines with a deadline for comments of 30 November. The Commission’s recent notice, Towards an effective implementation of Commission decisions ordering Member States to recover unlawful and incompatible State aid notes that the Commission has in recent years taken a stronger stance on State Aid, and that it is concerned to ensure the repayment of unlawful State Aid.
securities disclosure and state sponsors of terrorism November 19, 2007
Posted by Bradley in : Uncategorized , comments closedOf all the disclosure related issues securities regulators might have at the top of their lists, enhancing access to disclosures of issuers’ activities in or links with state sponsors of terrorism doesn’t seem like the most urgent. But on Friday the SEC issued a Concept Release on the subject. The first question says it all for me:
The Commission does not provide enhanced access to disclosures concerning other specific subject areas. Should we do so in this case? Why or why not?
The other questions aren’t bad either. Here’s the second:
Would providing easier access to companies’ disclosures of business in or with State Sponsors of Terrorism place appropriate emphasis on that issue or would it place undue emphasis? Would providing for easier access to such disclosures be consistent with the Commission’s mission of protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation?
planned parenthood event announcement November 15, 2007
Posted by Bradley in : Uncategorized , comments closedPlanned Parenthood of Greater Miami, Palm Beach, and the Treasure Coast is pleased to announce the Sex, Power and Politics a Conversation with Jackie Payne: Director of Government Relations for Planned Parenthood Federation of America in Washington, D.C. The event will take place Thursday, November 29th at 7:30pm at Florida International University – Miami East Ballroom, Graham Center (University Park Campus).
consumers and trust November 14, 2007
Posted by Bradley in : Uncategorized , comments closedIncreasing numbers of voices are raising questions about how trusting consumers should be. Toy recalls have raised issues of trust for consumers: how can consumers be sure that products they buy are safe? Publicity about unscrupulous lending practices also harms consumer confidence (via creditslips). From a policy perspective both toy recalls and predatory lending involve information asymmetries. Consumers have not understood well the risks of buying certain products, whether they are buying toys or loans. And sellers of toys and loans haven’t always had the clearest incentives, in the market or from regulation, to make clear to consumers the risks involved in their purchases.
In the EU today, Commissioner Meglena Kuneva announced that the EU Commission had taken action on misleading advertising and unfair practices on airline ticket selling websites. And in the financial markets there is uncertainty about how much of corporate pr can be trusted (via Information Arbitrage):
Now if investors had the confidence that what was coming out of corporate PR departments was the truth, the whole truth and nothing but the truth (and not until the next time they release a new version of the truth), I believe the amplitude of the ups and downs we’ve witnessed would be muted. Why? Because trading would be based on fundamentals, not on persistent uncertainty. And if one adjusts cash flow discount rates to take into account these extreme uncertainties, models become very, very sensitive to changes in perception. And these perceptions, given the lack of investor confidence in the information they’re receiving, are changing literally by the minute. This is no way to run an organized, orderly market. Things have got to change, and corporate managements and their Boards hold the keys.
Even the EU Commission, in a publication called Wise Choices, which contains a lot of paternalistic advice across a wide range of issues and is sent to many many schools around the EU, raises some questions about business practices:
We all like to get a bargain and save money on clothes, food and electrical appliances. But in Europe we don’t believe in trade at any price. Would you be happy to buy a pair of cheap trainers if you knew that they were made by a child who should have been at school? Would you be pleased to find a TV at a bargain price if you knew that the factory worker who packed it had been injured because he was working in an unsafe environment?
The problems are evident, but the solution(s) less so.
investing for baby boomers November 13, 2007
Posted by Bradley in : Uncategorized , comments closedYesterday FINRA announced:
the launch of its first, broad-based advertising campaign aimed directly at baby boomers, a demographic that its research shows lacks confidence in their investing knowledge and is eager to better understand their investment options.
With 10,000 baby boomers retiring every day over the next quarter century, FINRA believes it is crucial to reach out to baby boomers now, as they approach retirement. Recent FINRA Investor Education Foundation-sponsored research showed that seniors are targeted more frequently by investment fraudsters than younger investors.
The campaign was developed by Doremus and includes this TV ad with a cute dog rolling over, and this rather weird ad featuring a group of male people pretending to look like brokers, and all wearing the same bad yellow and black checked ties (in the print version of this ad the ties are blue). The ad invites viewers to “Check to see if a broker makes sense for you” through FINRA’s brokercheck system. I’m not sure what about the various ads is supposed to appeal particularly to baby boomers.
But if people who see the ads decide to visit FINRA’s website they will find some potentially useful information, such as a page with the title “Fraud Fighting 101: Smart Tips for Older Investors”, a page describing common investor problems and how to avoid them, and a page addressing the “senior specialist” problem.
fsa, contracts for differences, and transparency (empty voting) November 12, 2007
Posted by Bradley in : Uncategorized , comments closedToday the FSA published a long consultative document on the question whether to extend existing disclosure arrangements with respect to interests in shares to contracts which do not transfer voting rights. According to the press release, Sally Dewar of the FSA said:
This is not a clampdown on CfDs but a means, following extensive research, of addressing the concerns about their use on an undisclosed basis. While the behaviour that concerns us is not widespread, it is important enough to require a tightening of the existing regime to ensure fair and orderly markets.
I’m always a bit suspicious of this “fair and orderly” language in financial regulation.
This is an issue on which regulators around the world are focusing. ISDA recently wrote to IOSCO stating its opposition to such moves:
It is entirely appropriate that anyone who has entered into an agreement to acquire shares should disclose that fact to the market at the appropriate time. To treat cash-settled derivatives, however, as though they entail such an agreement is an unhelpful in two ways: it ‘second-guesses’ the contractual terms (which do not provide for delivery of shares or voting rights) and risks providing misleading information to the market as to the true state of affairs (since the possession of a cash-settled derivative cannot be said to be a shareholding). Furthermore, as a consequence of the economic purpose and nature of cash-settled derivatives being fundamentally different from that of equity, blunt requirements to disclose cash-settled derivative positions indiscriminately are fraught with technical difficulties. Ultimately, such measures have the potential to be damaging to the market in equity derivatives and consequently to firms wishing to manage risk efficiently.