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29 November 2012

This week in "Brussels"
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Banking Securities Insurance
Asset Management Corporate Governance/Accounting Financial Services Policy
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Articles from 22 November 2012 - 29 November 2012

Banking

EP: Banking union - Why it pays to get banks to play by the rules
Although MEPs support the idea of a banking union in the EU, they insist it has to be transparent and enjoy democratic legitimacy. Parliament is currently considering two legislative proposals by the European Commission on what the banking union should look like.  View Article
ALDE: An EU Single Supervisor needed without delay
The ECON committee has now adopted the legislative package establishing an SSM. For the ALDE Group, the transfer of supervisory powers to the European level has long been overdue, as the European single market for financial services cannot be effectively supervised from the national level.  View Article
Eijffinger/Nijskens: Banking union and ambiguity - Dare to go further
This column argues that the ECB should exert 'constructive ambiguity' in its supervision. This strategy would lead banks to behave more safely on their own by holding more liquid reserves and having a higher capital ratio.  View Article
Commons Hansard: Mark Carney announced as new Bank of England Governor
The UK Chancellor of the Exchequer, George Osborne, made a statement to the House of Commons announcing the identity of the next Governor of the Bank of England as Mark Carney, the current Governor of the Central Bank of Canada.  View Article
UK Government publishes consultation on regulation of Libor
The consultation seeks the views of industry and the public on legislation to implement the key recommendations of the Wheatley Review of Libor, which the Government accepted in full last month. Deadline for comments is 24 December, 2012.  View Article
Bundesbank/Dombret: Statement on Libor
Statement by Dr Andreas Dombret on the occasion of the public expert consultation of the German Bundestag's Finance Committee on 28 November 2012 on "Libor manipulation and other unhealthy developments in the financial industry".  View Article
ISDA: EC compromise draft on capital requirements for bank exposures to CCPs in the CRR
ISDA/AFME letter to the European Commission regarding the compromise draft on capital requirements for bank exposures to central counterparties (CCPs) in the Capital Requirements Regulation (Draft CRR Text).  View Article
TheCityUK calls for moderated approach to imposition of bank capital requirements
According to a new report for TheCityUK, the speed and extent of UK and European banking regulation threatens to constrain economic growth by limiting banks' ability to lend to SMEs.   View Article
WSBI calls for delay in application of Basel III rules
Heinrich Haasis, President of the World Savings Banks Institute has called for a delay of the Basel III package.  View Article
BIS: Payment, clearing and settlement systems in the CPSS countries - Volume 2
The CPSS published - under the aegis of the Bank for International Settlements (BIS) - reference works on payment systems and the other financial market infrastructures in various countries, both CPSS member and non-member countries. These publications are widely known as Red Books.  View Article
EBA publishes Guidelines on the assessment of the suitability of members of the management body and key function-holders
These Guidelines set out the process, criteria and minimum requirements for assessing the suitability of those persons, and are ultimately aimed at ensuring robust governance arrangements and appropriate oversight.  View Article
Bundesbank/Weidmann: The concurrence of crisis management and regulatory policy
Speaking at the Euro Finance Week, Weidmann focused on the banking union, and the problem posed by the connection between sovereign debt crisis and private debt crisis.  View Article
FT: Banks face more regulation over risk
Several high-profile scandals for banks have sparked a new regulatory drive to force lenders to spend more time and probably hold more capital guarding against such operational risks. The FSB and the BCBS have recently announced plans to tackle the issue next year.  View Article
AGB/Schmitz: Splitting banks is bad for the economy
"Sensible, internationally-consistent regulation is not something we see as a nuisance – it is in our very own interest", stressed Andreas Schmitz, President of the Association of German Banks.  View Article

Securities

ECON Committee: Deal on stricter EU rules for sovereign debt ratings
Credit rating agencies will have to obey additional rules on sovereign debt ratings, including three set dates per year for issuing them, under a deal agreed by Parliament, the Council and the Commission on Tuesday. (Includes link to Cyprus Presidency statement.)  View Article
Statement by Commissioner Michel Barnier following the agreement in trilogue of new European rules to regulate credit rating agencies
The new rules aim to reduce reliance on external ratings, requiring financial institutions to strengthen their own credit risk assessment and not to rely solely on external credit ratings.  View Article
Reuters: EU agrees new controls for credit rating agencies
European Union countries and the EP agreed to introduce limited controls on credit ratings agencies after their judgement was called into question in the debt crisis.  View Article
ICMA submits comments to European Commission consultation document on "The Regulation of Indices"
In its submission, the ICMA focused predominately on the points of most direct relevance to the international capital market, where it seemed most likely that the ICMA would have distinctive points to contribute.  View Article
BIS, ECB and IMF publish third part of Handbook on Securities Statistics
The aim of the Handbook is to assist national and international agencies in the production of relevant, coherent and internationally-comparable securities statistics, for use in monetary policy formulation and financial stability analysis.  View Article
General Regulation of the AMF - Book IV - Collective investment products
The provisions of the Chapter apply to all collective investment schemes governed by of Book II, Title I, Chapter IV, Section 1, Sub-section 1 of the Monetary and Financial Code, as well as to their management companies and depositaries.  View Article
FESE/Hardt: Speech at the Börse Stuttgart MiFID Kongress - Regulatorisches Symposium
Judith Hardt, Secretary General of the Federation of European Securities Exchanges, gave a speech at the MiFID congress organised by the Stuttgart Exchange. She spoke about the interconnectedness and implications of the MiFID.  View Article
ECMI: Prospects and Challenges of a Pan-European Post-Trade Infrastructure
This paper analyses three components on the new post-trade infrastructure measures: 1) the regulatory framework for and supervision of central counterparties under the new EMIR legislation; 2) the authorisation requirements of trade repositories; and 3) the draft CSD Regulation.  View Article
BaFin: New rules for high-frequency trading
Electronic trading has become significantly more important in recent years. High-frequency traders who are currently not supervised by BaFin either as a credit institution or as a financial services institution will in future need authorisation from BaFin.  View Article

Insurance

Insurance Europe president calls for vital Solvency II solutions
The European insurance industry supports the goals of the forthcoming Solvency II regulatory regime but vital issues still need to be resolved, Insurance Europe's president, Sergio Balbinot, told the EIOPA conference in Frankfurt.  View Article
Insurance Europe repeats urge for Japan to abide by GATS
Trade body Insurance Europe has criticised the approval of a new Japan Post Insurance education product as disregarding the competition concerns expressed by international organisations.  View Article
Airmic unveils clause to control use of Reservation of Rights
After months of discussion, Airmic has unveiled a clause for use in commercial insurance contracts to reduce the use of Reservation of Rights (RoR) by insurers – a practice that is said by many risk managers to delay claims settlements and inflate legal costs.  View Article
Insurance Insight: Indirect tax changes to hit European insurers in 2013
Insurers should brace themselves for an unprecedented level of indirect tax changes in Europe in 2013, intensifying the challenge of maintaining tax compliance.  View Article
Insurance Insight: Spanish provinces introduce direct premium tax collection
Four Spanish provinces have exercised their autonomous right to collect taxes directly from insurers.  View Article
CRE: Underused captives likely to rise in Poland
Captives are still playing a minor role in Polish corporate insurance, but this may change soon, according to Radoslaw Ziomko, Risk Management Director at Aon Global Risk Consulting Polska.  View Article
Insurance Insight: Chinese insurers turn to equity as they approach debt ceiling
Chinese insurers are increasingly likely to favour equity issuance over incurring debt to support growth as they get close to the debt ceiling imposed by the domestic regulator, according to Fitch.  View Article

Asset Management

ECB policy actions drive increased sales on long-term UCITS during third quarter of 2012
The European Fund and Asset Management Association (EFAMA) has published its latest Quarterly Statistical Release which describes the trends in the European investment fund industry during the third quarter of 2012.  View Article
ALFI UCITS IV implementation project – KID Q&A Document
ALFI's Key Investor Information Document (KID) working group has analysed the UCITS IV implementing measures on the KID adopted by the European Commission by Regulation (EU) n° 583/2010 of 1 July 2010, as well as related regulatory guidelines and the use of KID in distribution networks.   View Article
UCITS funds to be prevented from investing with unregulated hedge funds
This article claims that it looks as if European regulators are continuing to seek to limit the instruments that UCITS funds may invest in, with unregulated hedge funds the next out-of-bounds category.  View Article
AIMA and Deutsche Bank publish new Roadmap to Hedge Funds for institutional investors
The Alternative Investment Management Association (AIMA), the global hedge fund association, and Deutsche Bank today announced the launch of a new edition of the educational guide for institutional investors in hedge funds - the Roadmap to Hedge Funds.  View Article
IPE: EC paper on long-term investing fails to address transparency concerns
The European Commission's Green Paper on Long-Term Investing will not help improve market transparency and efficiency, and instead only aims at creating new markets for pension funds and the private sector, one European group has claimed.  View Article
DWP: Reinvigorating workplace pensions
This document sets out the UK Department for Work and Pensions' strategy for putting in place arrangements that result in the provision of pensions.  View Article
IPE: Webb praised for throwing down gauntlet in defined ambition paper
The UK pension industry has welcomed the Department for Work and Pensions' (DWP) proposals for "reinvigorating" occupational pension schemes, but called for the government not to be distracted from ensuring members of defined contribution (DC) schemes are offered the best value for money.  View Article
FT: Worrying noises coming from EU
Quoting figures drawn up for the UK government by The Pensions Regulator, minister for pensions Steve Webb has concluded that the impact of EC proposals to extend a Solvency II-type regime from insurers to defined benefit occupational pension schemes would be "devastating".  View Article
FSA consultation: A new capital regime for Self-Invested Personal Pension (SIPP) operators
Operators are required to hold an amount of capital, which is the higher of £5,000, six weeks of expenditure or 13 weeks of expenditure if they hold client money. Deadline for comments is 22 February, 2013.  View Article
IPE: NEST restrictions should remain until scheme is self-financing
Restrictions that limit transfers into and out of the National Employment Savings Trust (NEST) should remain in place until the DC fund – launched as part of the UK government's introduction of auto-enrolment – becomes self-sustainable, the Work and Pensions select committee has been told.  View Article
Vince Cable: Speech at the NAPF Corporate Governance Conference
Cable argued for an end to the focus on short-term returns among investors, and set out what the government is doing to foster a system of capitalism based on long-term value creation.  View Article
IPE: Pension funds must not be faceless investors
Pension funds must strive to become more than simple "faceless investors", a corporate governance specialist at Dutch asset management giant APG has insisted.  View Article
IPE: Lithuanian parliament approves long-awaited pension reforms
The Lithuanian Parliament (Seimas) has passed a package of laws intended to reform the pensions system, with some reforms being first signalled by the government more than a year ago.  View Article

Corporate Governance/Accounting

FEE policy statement on the EC proposals for the recast of the 4th and 7th Accounting Directives
In relation to the EC Proposals on the Accounting Directive of 25 October 2011, the final report of the JURI of 25 September 2012, and the Presidency compromise text of the Council of 19 June 2012, FEE's intent is to close the gap between the differences of views in the EP and the Council.  View Article
IFAC supports key positions in IMF's paper on fiscal transparency, accountability and risk
IFAC welcomed the recent release of the IMF's paper, 'Fiscal Transparency, Accountability and Risk'. The paper highlights the seriousness and extent of the current inadequacies in governments' fiscal reporting and accountability, and underscores the immense risks associated with the shortcomings.  View Article
FRC: FRS 100 and FRS 101 - New accounting standards for the UK and Republic of Ireland
The FRC issued FRS 100 'Application of Financial Reporting Requirements' and FRS 101 'Reduced Disclosure Framework'. They will be effective from 1 January 2015, but may be adopted early.  View Article
IASB: Proposals for amendments to IAS 28
The IASB published for public comment an Exposure Draft of proposed amendments to IAS 28 Investments in Associates and Joint Ventures considering equity method: share of other net asset changes. The IASB requests comments to these proposals by 22 March, 2013.  View Article
IASB: Proposal for limited changes to IFRS 9 Financial Instruments
The IASB published for public comment proposals for limited changes to the classification and measurement requirements for financial instruments under IFRS 9: Financial Instruments. The exposure draft is open for comment until 28 March, 2013.  View Article
FASB: Proposal to clarify scope of disclosures that apply to balance sheet offsetting of assets and liabilities
The FASB issued for public comment a proposed ASU — Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities — that would clarify the scope of transactions that are subject to the disclosures about offsetting. Comments are requested by December 21, 2012.  View Article
ACCA/PwC UK Chairman calls for accountancy profession to be brave in helping to rebuild trust in markets
Ian Powell, Chairman of PwC UK, also called for the scope of audit, which is crucial to restoring and maintaining confidence, to be extended, and for a debate on the future of auditing.   View Article
FEE commented on CICA–CPAB Discussion Paper, "Enhancing Audit Quality: Canadian Perspectives – Auditor Independence"
FEE welcomed the initiative focusing on three key areas in enhancing audit quality - the independence of auditors, the role of audit committees, and auditor reporting.  View Article
CRE: Insurance accounting rules finally underway, prepare for a bumpy ride
Swiss Re, the Zurich-based international reinsurance group, believes that 'significant' progress has been made on new insurance accounting standards, but warns that key details still need to be settled.  View Article
ACCA and KPMG call for cooperation of standard-setters and Islamic banks to harmonise financial reporting
According to the ACCA and KPMG report, the rapid global growth in Islamic finance means that action must be taken to ensure the way in which it is reported financially is harmonised and made more consistent, e.g. by the application of IFRS.   View Article
Bruegel/Véron: Obama should think globally in appointing a new SEC chair
The appointment is likely to have momentous consequences, not only for US securities markets but also, and perhaps mainly, for the global architecture of financial standard-setting after the recent systemic financial crisis.  View Article

Financial Services Policy

EFR publishes report: "How regulation can preserve the contribution of financial firms to economic growth in Europe"
The European Financial Services Round Table (EFR) published together with Oliver Wyman a report to help address the challenges currently faced by the European economy.  View Article
FT: Engagement without payment, FSA says
A second CSFI report published this month analysing the value created by independent research found that fund managers were concerned that if the FSA took too draconian a view on corporate access, valuable information would be lost.  View Article
Deloitte: Third of consumers to opt for DIY financial planning to avoid paying fees for advice
Research from Deloitte, the business advisory firm, highlights how the implementation of the Retail Distribution Review will lead to an increase in DIY financial planning among consumers.  View Article

Graham Bishop’s Articles and Speeches

BoE Governor Carney: Questions that will need to be answered in the years to come
An extraordinary choice by Chancellor Osborne. Despite any reservations, everyone will offer the new Governor of the Bank of England every possible success in his new role.   View Article





© Graham Bishop

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