In the news this week

Author: Karry Lai, Olly Jackson | Published: 30 Nov 2018
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Americas: cracking the whip

The Securities and Exchange Commission (SEC) will be looking into possible changes to the quarterly earnings reports for public companies’ framework and will be seeking feedback on the issue. The move follows a request from President Trump earlier this year to publish reports less frequently to ensure companies have 'greater flexibility and save money’.

The regulator is also flexing its muscles in the crypto field, ordering US boxer Floyd Mayweather to repay more than $600,000 for failing to disclose payments received for promoting investments in various initial coin offerings, including that of Centra Tech. The SEC also settled with US music producer DJ Khaled on similar issues.

Federal Deposit Insurance Corporation chair Jelena McWilliams announced that deposit-taking lenders won’t be required to submit resolution plans (so-called living wills) until changes to the rule governing the process are finalised. She said legislative efforts to create more flexible and transparent bankruptcy resolution rules would be looked into, as part of a wider push to strengthen and streamline" the large bank resolution planning process.

Randal Quarles, the Federal Reserve's head of financial regulation, has pledged continued support to the central bank's plans to continue with a rollback of Dodd-Frank. His words come amid bipartisan criticism from the House Financial Services Committee, and a few weeks before Democrats take control of the House in January.

Brazilian construction giant Odebrecht is in the process of renegotiating the terms of some of its bank debt, after missing a deadline to pay $11.5 million in interest. The decision would concern some $3 billion in bonds issued by its Odebrecht Finance unit.

Asia Pacific: action, reaction

Allianz has received approval to operate as a wholly-owned foreign insurance holding company in China. The insurance company will be the first foreign insurance company to obtain the green light to set up in the PRC, four years earlier than anticipated as China continues its path towards opening up its banking and insurance sectors. 

The Hong Kong Securities and Futures Commission (SFC) has started a thematic review of selected licensed corporations (LCs) to assess their risk governance and oversight framework as well as their risk management practices. The review comprises three work streams focusing on the underlying risks of LCs’ remote booking models, operational risk and data risk, with the aim of providing further guidance for LCs to cope with these evolving risks. The thematic review will involve questionnaires, analysis of questionnaire responses to identify any red flags, as well as meetings and on-site inspections.

The EU has reached an agreement on a new regime that will put more scrutiny over foreign investment for national security reasons. The move will put more pressure on Chinese outbound investment into the EU, especially in sensitive sectors such as technology and infrastructure. With the new regulation, baseline standards will be set on security screening and a more formal information-sharing mechanism is expected to be put in place.

EMEA: changes, changes, changes

New regulation for the cryptocurrency sector is necessary to meet the demands of the market and ensure that investors are sufficiently protected from industry risks, according to sources speaking to IFLR. The UK Cryptoassets Task Force is currently consulting on new regulation that will introduce a framework for the first time, with this expected to be introduced early next year. Coinbase UK chief executive Zeeshan Feroz said while existing regulation can help mitigate some market concerns, new regulation specific to the sector is required.

Non-EU companies are ahead of EU companies in their GDPR compliance journey, with many said to benefit from stricter national regimes. It is believed that the transition period for companies is now over and regulators will begin enforcement next year, with a considerable number of EU-based entities behind in their preparation. "The consensus is that, six months on, the transition period is over and the focus for companies now is to embed their GDPR-compliant policies and procedures within their organisation, put them into practice and look into how to make them more efficient," said Skadden counsel Eve-Christie Vermynck.

German police has raided the Deutsche Bank’s headquarters in Frankfurt and other offices after allegations of money laundering  linked to the Panama Papers. According to Reuters, citing the prosecutor's office, investigators are paying close attention to the activities of two unnamed Deutsche Bank employees alleged to have helped clients set up offshore firms to launder money.

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