In the news this week

Author: John Crabb, Karry Lai, Olly Jackson | Published: 6 Jul 2018
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Asia Pacific: not in our backyard

Non-EU financial regulators, including Hong Kong’s Securities and Futures Commission (SFC), Japan’s Financial Services Agency (JFSA) and the US’ Securities and Exchange Commission (SEC) are looking to get an exemption from the General Data Protection Regulation (GDPR) to ease cross-border investigations. The regulators are seeking an administrative arrangement to provide formal exemption to be applied to cross-border information sharing.

China Mobile has been blocked from entering the US on national security grounds. The incident is happening against the backdrop of the growing tensions between US and China. The US Commerce Department is reviewing export controls to strengthen national security reviews of foreign acquisitions of US companies. The proposed legislation will give the Committee on Foreign Investment in the US (Cfius) to review transactions for national security risks as well as the creation of a list of new technologies that will be controlled which are likely to include artificial intelligence and robotics technologies that are part of the Made in China 2025 initiative.

Americas: independence days  

It’s been a typically hot and slow summer news week in the US. Punctuated by Independence Day, not much happened bar the celebration of the country’s 242nd birthday. The most significant news story to hit the Americas was in Mexico, where Andrés Manuel López Obrador won the presidential election. AMLO, the acronym he is widely known as, is a leftist populist leader who has previously voiced his dislike for his US counterpart. The world will watch to see how the North American Free Trade Agreement (Nafta) negotiations develop once he officially takes office in December.

Electronic payment company Square quietly withdrew its application to be a depository bank from the Federal Deposit Insurance Corporation (FDIC). The fintech intends to resubmit its application once it has strengthened certain aspects of its case as directed by the regulator. A separate application in Utah remains in place.

Bitcoin took a tumble following the Square announcement, which itself followed the news that the Securities and Exchange Commission requested comment on a further bitcoin-based exchange-traded fund.

The FDIC was also awarded $625.3 million by a federal judge, after PwC failed to uncover a fraud scheme between Colonial Bank and the mortgage lender Taylor Bean & Whitaker.

EMEA: clarification or confusion?

European bank consolidation has been a topic for discussion for a number of months. Following a poll on IFLR.com, 71% of respondents believe that bank consolidation is necessary for the banking sector. Yet for the time being, big bank mergers are unlikely. According to Patrick Sarch, partner at White & Case, the tipping point would be in the next two to three years. Before then however, it is likely that bank consolidation will be driven by challenger banks.

New rules in the UK are intended to provide greater clarity to investors about initial public offerings (IPOs). But there are fears that the new rules will deter smaller companies from listing. "We’ve ended up with a regime that will produce some extra cost for companies, and this could cause some issues," warned a lawyer. The changes come after criticism that connected analysts received access to a prospectus well before unconnected analysts, who may see a prospectus only shortly after a sale.

The Financial Conduct Authority (FCA) has sort to provide clarification on the Senior Managers and Certification Regime following a consultation last year and published its 'near final’ rules this week. The FCA is also considering whether to create a public register of senior managers’ employment history, which could make it easier to assess whether a senior manager is 'fit and proper’.  

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