Saturday 5th September 2015
NEWS TICKER, THURSDAY, September 3rd: The Straits Times Index (STI) ended 28.3 points or 0.98% higher to 2906.43, taking the year-to-date performance to -13.63%. The top active stocks today were SingTel, which gained 0.82%, DBS, which gained 0.80%, UOB, which gained 1.40%, OCBC Bank, which gained1.13% and CapitaLand, with a 0.36%advance. The FTSE ST Mid Cap Index gained 0.55%, while the FTSE ST Small Cap Index rose 0.24% - Madrid City Hall announced it would dedicate €10m out of its 2016 budget to a "welcome plan for refugees" to include housing, integration, psychological support and legal aid, City Hall spokeswoman Rita Maestre (Ahora Madrid) said during a press conference on Thursday. Maestre said a budget had been decided upon but that specific numbers had not: "We want to welcome all those who are fleeing from war", adding that given their situation "a permanent housing solution" would be needed in the city. The Mayor of the Spanish capital, Manuela Carmena, said on Wednesday that a decision would be taken at the city government meeting today: "The city of the hug must, of course, be ready to welcome refugees" - The European Bank for Reconstruction and Development (EBRD) is joining international efforts to clean up Tunisia’s Lake Bizerte with a €20m loan and technical assistance to support the expansion and rehabilitation of the sewerage network of the Bizerte region and the rehabilitation of three wastewater treatment plants located near the lake. The EBRD’s investment is part of an integrated environmental programme aimed at de-polluting Lake Bizerte and reducing sources of pollution through investments in wastewater, solid waste and industrial effluents. This programme is labelled by the Union for the Mediterranean and is part of the Horizon 2020 Initiative, which aims to de-pollute the Mediterranean by the year 2020. The European Investment Bank is providing a €40 million sovereign loan to the programme while the European Union Neighbourhood Investment Facility is contributing a €15m grant for both capital expenditure and technical cooperation - Analysis of illicit financial flows (IFFs) by Global Financial Integrity (GFI) shows that over the period 2003-2012 the global volume of IFFs grew by more than 9% annually (. In 2012 (the most recent year for which data are available), illicit flows were estimated at close to $1trn. In response to this unfettered surge in illicit capital leaving developing nations, the UN has endorsed target 16.4 in the Sustainable Development Goals (SDGs), which commits the global community to “significantly reduce” IFFs by 2030. This UN action “represents an historic moment in development policy given that it is the first time the international community has recognized the illicit flows problem and pledged to address it,” says GFI President Raymond Baker - US Secretary of Commerce Penny Pritzker named Eduardo Leite, Chairman of the Executive Committee of Baker & McKenzie LLP, as the new chair of the US section of the US-Brazil CEO Forum. “Mr. Leite has served on the U.S. section of the CEO Forum for several years, and I am pleased that he has agreed to serve as Chairman,” said Secretary Pritzker. The new US section chair was named after the former chair, Ms. Patricia Woertz, Chairman of the Board of Directors of Archer Daniels Midland Company, submitted her resignation from the role. However, Woertz will remain a member of the U.S.-Brazil CEO Forum, and Leite will complete the current three-year term, which ends on August 13th 2016 - MarketAxess Holdings Inc. (Nasdaq:MKTX), the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced total monthly trading volume for August 2015 of $75.5 billion, consisting of $43.7 billion in U.S. high-grade volume, $26.7bn in other credit volume, and $5.1 billion in liquid products volume. MarketAxess is providing both the reported and adjusted estimated US high-grade TRACE volumes on its website. The Company believes that the adjusted estimated volumes provide a more accurate comparison to prior period reporting.

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Management in the bull’s eye

Tuesday, 23 July 2013 Written by 
Management in the bull’s eye Today, managers are operating in a world of changing expectations. They are expected to do more to ensure that employees act appropriately and that fund and firm governance are firmly grounded. For those who miss the mark, the personal consequences can be serious. http://www.ftseglobalmarkets.com/

Today, managers are operating in a world of changing expectations. They are expected to do more to ensure that employees act appropriately and that fund and firm governance are firmly grounded. For those who miss the mark, the personal consequences can be serious.

The UK, at the forefront recently in defining expectations of management, this week established greater personal responsibility for senior bankers—including criminal liability for "reckless misconduct” and a burden of proof that will hold senior bank officers accountable "unless they can demonstrate that they took all reasonable steps" to prevent misconduct. The possibility of extending these provisions to other sectors of the financial services industry is explicitly discussed in the directive. Over time, the forces moving the banking industry in this direction will likely affect the alternatives space as well.
 
In the US, the SEC has openly stressed that senior management will be held responsible for creating, managing and maintaining an effective control environment. A conference for senior management was held in February 2012 precisely to drive this point home. And, senior staff frequently emphasize the point in speeches. Most recently, Drew Bowden, the Director of the SEC’s Office of Compliance Inspections and Examinations, reiterated the message and told investors that a portfolio manager who dominates his firm “in the old style” is a “warning indicator” to the SEC. (Other “warning indicators” include a lack of an adequate process for the investment and risk management functions.)
 
The CFTC's actions against Jon Corzine, former CEO of MF Global, epitomize the shift. According to the CFTC, Corzine's behavior led employees to dip into segregated customer accounts. Echoing the spirit of the CFTC's actions, there are calls in the press for personal liability for officers when lower-level employees violate segregation laws. And Senator Elizabeth Warren recently questioned the Federal Reserve, the Treasury, the FDIC and the Office of the Comptroller of the Currency about why they were settling so frequently with those who may have broken the law. 
 
In today’s environment, senior management may be well advised to revisit governance issues. Clarity about rules and expectations is necessary—both internally at their firms and at the funds they manage. Based on what investors are saying, managers with first-class infrastructures might even enjoy a marketing boost. A recent survey by the Cayman Islands Monetary Authority notes that a majority of the investors are not satisfied with the status quo in corporate governance. 

Deborah Prutzman

Deborah Prutzman is the founder and CEO of The Regulatory Fundamentals Group (RFG), a New York-based firm that designs and implements business and risk solutions for alternative asset managers and institutional investors. RFG's senior-led team employs a robust suite of tools, including practical alerts on new and potential industry developments and its powerful RFG Pathfinder® knowledge management platform which simplifies the challenges of operating in a regulated environment.  To learn more about The Regulatory Fundamentals Group call (212) 537-4058, email a representative at Information@RegFG.com or visit RegFG.com

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