Irreconcilable differences? Bank directors, shareholders and regulators

Those tasked with governing UK banks have always faced difficulties in balancing competing interests.  This stems in part from the fact that banks must be operated in accordance with both company law and applicable financial services regulation.  The two regimes do not always operate in a clearly integrated and consistent manner.  Banks are also among the largest and most complex organisations, which adds to the practical challenge of governing them effectively, particularly when they are run on a cross-border basis. Continue reading

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Filed under Banking, FCA, Investment banking, PRA, Retail Banks, UK, UK Legislation

AIF and UCITS marketing in France: the AMF clarifies its regulations

The AMF has issued a position and an instruction dated 30 June 2014 clarifying the rules for marketing AIFs (alternative investment funds) and UCITS (undertakings for the collective investment of transferable securities) that derive from Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 (the AIFM Directive), as transposed into French law in Order 2013-676 of 25 July 2013 and decree 2013-687 of 25 July 2013.  Continue reading

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Filed under Europe, France, Funds

Hong Kong: China intensifies anti-corruption drive

Proposed amendments to the Criminal Law will give President Xi Jinping further powers in his fight against corruption in China.  Once they are passed by the National People’s Congress, the new laws will provide further evidence of an ongoing policy shift in China towards an equal focus on both bribe recipients and those who make corrupt payments.

The draft Ninth Amendment to the Criminal Law of the People’s Republic of China (“Draft”), which was recently published for comment, contains a number of proposed amendments with respect to bribery offences. Key proposals include:  Continue reading 

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Filed under Asia, Bribery and Corruption, China, Hong Kong

UK: High earners reporting for limited licence/limited activity IFPRU firms – action required by 10 November

Limited licence/limited activity firms subject to the requirements of the Capital Requirements Directive (CRD IV) will have received email correspondence from the FCA requesting information in relation to their high earners in 2013.  This information has not previously been collected by the FCA from such firms and we have received a number of queries as to why this is now being requested, and whether firms are required to comply by the 10 November deadline.   Continue reading

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Filed under FCA, UK

European Bank Stress Tests and Asset Quality Reviews

The European Central Bank (ECB) and the European Banking Authority (EBA) have published the results of the latest stress tests and asset quality reviews (AQR).  As foreshadowed from the outset, a number of institutions did not pass the ‘unique and rigorous’ tests, which were designed to be more severe than in previous EU exercises.

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Filed under Banking, EU, Europe, France, Germany, Italy, PRA, Spain, UK

EU sanctions update: EU extends sanctions against Syria, amends sanctions against Libya and Somalia; further developments relating to Ukraine/Russia

Our latest ebulletin summarises recent developments in various international sanctions regimes.  At EU level these are relatively limited:

  • The EU has announced additional sanctions in respect of the situation in Syria, extending the designated persons list and announcing an imminent restriction on the export of jet fuel to Syria;
  • Minor amendments have also been made to the EU sanctions against Libya and Somalia; and
  • The EU has published two new sets of conclusions on the situation in Ukraine, but these do not discuss possible changes to the sanctions regime.

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Filed under British Virgin Islands, Cayman, EU, Europe, Russia, Ukraine

USA: Delaware Chancery Court finds bank’s “unclean hands” bar contribution from co-defendants, orders payment of $76 million damages

On October 10, Vice Chancellor J. Travis Laster of the Delaware Chancery Court issued an opinion ordering RBC Capital Markets LLC (“the Bank”) to pay USD $75.8 million of a $91.3 million damages award to a class of former Rural/Metro Corp. shareholders.  The damages opinion was preceded by the court’s finding in March that the Bank, along with Rural/Metro’s directors, and their other financial advisor Moelis & Co. LLC, were liable for breaches of their respective duties in connection with the sale of the company to Warburg Pincus LLC.  The Bank was found to have deliberately undervalued the company, advising the board to accept Warburg’s offer, without disclosing that it was simultaneously seeking to finance Warburg’s takeover.  Continue reading

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Filed under Americas, US

Hong Kong Market Misconduct Tribunal imposes a 4 year ban on Tiger Asia and Mr Hwang

On 7 October 2014, the Hong Kong Market Misconduct Tribunal (MMT)  made “cold shoulder orders” and “cease and desist orders” against New York-based asset management company, Tiger Asia Management LLC (Tiger Asia) and Bill Hwang Sung Kook (Mr Hwang), pursuant to s.257(1)(b) and (c) of the Securities and Futures Ordinance (SFO).  The effect of the orders is that both Tiger Asia and Mr Hwang have been banned from the date of the order from dealing in any securities in Hong Kong for 4 years (5 years being the maximum period that the MMT may order) and are bound not to engage in any form of market misconduct in the future.

The MMT’s report considers, inter alia, the nature and purpose of “wall crossing” which the MMT considers to be an important tool in ensuring the efficient operation of financial markets and one built on trust. Continue reading

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Filed under Banking, Hong Kong, Investment banking, Investment Funds

UK: The EBA clamp-down on role-based allowances: behind the headlines

As has been widely reported, the European Banking Authority has stated that many role-based allowances should now be treated as variable remuneration, which will result in many banks being in breach of the “bankers’ bonus cap”.  Continue reading

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Filed under EU, Europe, France, Germany, Italy, Spain

Hong Kong regulators issue guidance for the protection of customer data in the financial services industry

The Office of the Privacy Commissioner for Personal Data (the PCPD) and the Hong Kong Monetary Authority (the HKMA) have recently published guidance notes regarding the obligations of financial institutions and, in the case of the HKMA, Authorised Institutions, to protect their customers’ data.

The HKMA has indicated that it expects Authorised Institutions to complete a critical review of the adequacy of their existing controls for protection of customer data by the end of the first quarter of 2015. Continue reading

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Filed under Asia, Hong Kong