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Ratings agency Moody's says the Financial Accounting Standards Board (FASB)'s recent guidance for special purpose vehicles won't affect ratings for US banks.

The German government has said it will exempt banks from a law that has made true sale securitizations impossible for the past two years.

Secondary legislation to amend insolvency reforms in the UK Enterprise Act will extend administrative receivership rights to complex structured finance deals.

The Lamfalussy process will fail and the creation of a centralized European Securities and Exchange Commission (SEC) is inevitable, according to a new paper on the future of European securities regulation.

Ben Maiden reports from New York on moves to tackle investor concerns over mutual and hedge funds

To cope with commercial crimes in Hong Kong, the Securities and Futures Commission (SFC) recently published proposed revisions to the existing Guidance Note on Money Laundering for public consultation.

As part of the reforms of the securities settlement system, a securities clearing institution (Shoken Torihiki Seisan Kikan) has been created under an amendment to the Securities and Exchange Law, which took effect on January 6 2003. A securities clearing institution means a central counterparty with respect to securities transactions, which enables securities transactions between the buyer(s) and seller(s) to be cleared in one block. A primary purpose of the securities clearing institution is to lessen the settlement risk with respect to securities transactions.

In a strongly worded January 2003 report, the US Senate Permanent Subcommittee on Investigations stated that, by the end of this year, the SEC and US bank regulators should take action to preclude abusive structured finance transactions. The report applauds the use of structured finance to lower funding costs and diversify risk (true asset securitizations) but virtually demands the termination of false liability securitizations. False securitizations attenuate risk and hide assets and liabilities from investor and regulatory scrutiny.

The Cayman Islands has always been responsive to the needs of the international financial community in introducing expedient legislation. Last year saw the creation of the segregated portfolio company (SPC) by way of amendment to the Companies Law of the Cayman Islands, and now revisions in 2003 will make it a more attractive corporate vehicle for mutual funds and multi-issuer structured finance vehicles. Provisions that have caused difficulties in obtaining a rating for structured finance deals will be removed and a mechanism introduced to enable any existing Cayman Islands company to convert into an SPC. The key points are described below.

An increasing number of Canadian issuers have steered away from fixed price bids recently and opted for an auction tender process, or so-called Dutch auction, when completing substantial issuer bids. The Dutch auction issuer bid model has been further modified by issuers and investment dealers as a technique to distribute public offerings of securities and, most recently, has also been used by investors seeking to acquire shares in public issuers.