Thursday 27th November 2014
NEWS TICKER, THURSDAY NOVEMBER 27TH 2014: According to local press reports, the chief of the UAE stock market regulator wants more industrial companies to list their shares on exchanges dominated by property and investment firms. Abdulla Al Turifi, chief executive of the UAE Securities and Commodities Authority (SCA), says the regulator is reviewing applications for initial public offerings of up to four companies to list on the UAE bourses and another three applications for a new secondary market for companies that currently trade only OTC. The UAE is seeking to broaden its industrial base and reduce its reliance on hydrocarbons, but the country’s two main stock exchanges are dominated by property and financial listings. Recent IPOs have come from retail, a sector also previously unrepresented on the exchanges. In February this year, the SCA and the Ministry of Economy issued a law requiring private joint stock companies to list their shares on a second market, in the hope that it would encourage firms to eventually move onto the main board- Moody's has placed the B3 corporate family rating, B3-PD probability of default rating and B1 rating on the senior secured facilities of Reynolds Group Holdings Limited under review for downgrade. The review follows RGHL's announcement that it had entered into a definitive agreement to sell its SIG Combibloc business to Onex Corporation for up to €3.75bn. The transaction is expected to close in the first quarter of 2015, pending final regulatory approvals and the satisfaction of other customary closing conditions - Morocco’s House of Representatives yesterday approved a new law authorising the establishment of Islamic banks and private companies to issue Islamic bonds. Since the Islamist-led government took office in 2011, it has been attempting to develop Islamic finance in the country. The bill was passed unanimously - According to Iran’s Fars News Agency (FNA) Iran’s non-oil exports have grown by 28% since the end of March. Iran’s non-oil exports have surged by 28% since the Persian new year (March 21), Fars News Non-oil export revenues, minus gas condensates, were approximately $18bn this year. Roughly $5bn from the non-oil exports revenues were from tourism (up 32%), though the bulk comes from engineering, workforce and transit services. Some 93% of the country’s non-oil export revenue comes from Asian countries. Imports since the end of March have risen 32% to $21.695bn -IXICO the brain health company, today announces that the contracts for two separate clinical trials in Huntington’s disease with two pharmaceutical companies have been extended. As a consequence, IXICO anticipates the revenue from these two contracts to be significantly enhanced to a potential £2.5m over approximately three years – Any announcement around the sale of Japan Post Holding’s projected IPO now looks to be postponed until January, according to the company’s president Taizo Nishimuro, at a news conference earlier today. In October, the government selected Nomura Securities and ten other underwriters for the initial public offering. The IPO is the first leg of the government's plan to sell up to two-thirds of Japan Post's shares. The government is hoping to raise more than $20bn from the sale - The US Commodity Futures Trading Commission (CFTC) filed notice to revoke the registrations of Altamont Global Partners LLC (Altamont), a commodity pool operator of Longwood, Florida, and John G. Wilkins a principal, managing member and approximate one-third owner of Altamont. The notice alleges that Altamont and Wilkins are subject to statutory disqualification from CFTC registration based on an order for entry of default judgment and an amended Order of permanent injunction. The orders include findings that Altamont and Wilkins misappropriated commodity pool funds and issued false quarterly statements to pool participants. The notice alleges that Wilkins is subject to statutory disqualification from CFTC registration based on his conviction for conspiracy to commit mail fraud and wire fraud. A US District Court has sentenced Wilkins to 108 months in federal prison - The Straits Times Index (STI) ended +0.94 points higher or +0.03% to 3345.93, taking the year-to-date performance to +5.72%. The FTSE ST Mid Cap Index gained +0.08% while the FTSE ST Small Cap Index gained +0.08%. The top active stocks were SingTel (+0.26%), Global Logistic (+1.52%), DBS (-0.40%), OCBC Bank (+1.26%) and UOB (-0.42%).The outperforming sectors today were represented by the FTSE ST Consumer Services Index (+0.40%). The two biggest stocks of the FTSE ST Consumer Services Index are Jardine Cycle & Carriage (+0.29%) and Genting Singapore (+0.44%). The underperforming sector was the FTSE ST Utilities Index, which declined -0.97% with United Envirotech’s share price declining -0.61% and Hyflux’s share price gaining +1.09%. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (+0.78%), SPDR Gold Shares (-0.22%), United SSE 50 China ETF (+2.33%). The three most active Real Estate Investment Trusts (REITs) by value were Suntec REIT (+0.26%), Ascendas REIT (+0.87%), CapitaMall Trust (+0.51%). The most active index warrants by value were HSI23800MBeCW141230 (+20.35%), HSI24400MBeCW141230 (+18.67%), HSI23600MBePW141230 (-20.00%) and the most active stock warrants by value today were OCBC Bk MBeCW150413 (+6.38%), KepCorp MBePW150330 (-5.88%), UOB MB eCW150415 (unchanged) - Sentiment in the Italian consumer sector has taken another step backwards according to the latest figures this month. The Italian Consumer Confidence indicator has now fallen for a seventh straight month to produce a November reading of just 100.8, from a peak above 106.0 this sentiment metric reached 101.3 last month, market expectations for today’s reading were for a slight rise to 101.6. The Organisation for Economic Co-operation and Development (OECD) yesterday published a less than optimistic report for the near term growth prospects of the Italian economy. The previous OECD report projected growth for Italy of 0.5% over the full 2014 year but this has now been revised downwards by almost a full point to forecast a 2014 contraction of -0.4%.

Protect Your Firm... And Your Personal Assets!

Monday, 30 July 2012 Written by 
Protect Your Firm... And Your Personal Assets! Hoping for a respite from regulatory change?  Think again.  Gathering forces may create a regulatory storm that is even more difficult than the one faced in the 2007-2009 financial crisis.  In this tempest, both the regulated and the regulators will have bull’s-eyes on their backs.  Regulators are likely to become more conservative in their analysis and more active.  It is therefore imperative to assess your firm now and prepare yourself to withstand regulatory inquiries.  You can also expect more scrutiny from investors who will seek to allocate funds only to those firms that they believe are fully complying with applicable laws and regulations. http://www.ftseglobalmarkets.com/

Hoping for a respite from regulatory change?  Think again.  Gathering forces may create a regulatory storm that is even more difficult than the one faced in the 2007-2009 financial crisis.  In this tempest, both the regulated and the regulators will have bull’s-eyes on their backs.  Regulators are likely to become more conservative in their analysis and more active.  It is therefore imperative to assess your firm now and prepare yourself to withstand regulatory inquiries.  You can also expect more scrutiny from investors who will seek to allocate funds only to those firms that they believe are fully complying with applicable laws and regulations.

What fuels this gathering storm?  Outright major misappropriations by the likes of Madoff and Peregrine's Wasendorf are part of the equation.  In addition, events such as the LIBOR-fixing scandal at Barclays, J.P. Morgan’s “London Whale” trading losses, and MF Global’s failure to segregate customer funds serve as cautionary examples.

These stories highlight that a firm’s assets, reputation, and in some cases, even the firm’s fundamental viability are at stake when things go awry.  As if that weren’t bad enough, senior executives face additional consequences.  In these and other similar incidents, personal assets can be at stake even when others are the primary wrongdoers.  



Think you are immune from these risks?  Think again.  Labaton Sucharow LLP, a plaintiff's law firm, recently published a unsettling study indicating that one in four financial industry professionals in the U.S. and U.K. believe wrongdoing is necessary for success.  If this study is credible, the message it sends to the general public is highly negative.  It speaks to senior management of alternative investment firms loud and clear: sometimes the best-intentioned executive may have an employee who hears an "unintended message" and veers off course.  Intended or not, the executive may ultimately bear responsibility. 

The first line of defense for an investment advisory firm and its executives is to build a culture in which the firm’s standards clearly and consistently meet all applicable regulatory and ethical expectations.  It is particularly important for firm leaders to reaffirm these standards and expectations during times of economic and operational stress, when legal and internal requirements may appear to conflict with business drivers (such as maximizing short-term results).  Employees must internalize that senior management will take the ethical route in order to maximize the long-term value of the firm—and expects them to do the same.

The second line of defense, at least in the U.S., is to develop a governance structure that satisfies the requirements specified in the U.S. Attorneys’ Manual.  This manual offers incentives to companies that adopt a comprehensive compliance and ethics program (and take certain actions upon the occurrence of alleged missteps).  A program that satisfies these requirements will contain elements in addition to those required by the SEC and CFTC.  Complying with the U.S. Attorneys’ Manual can be an invaluable safeguard that reduces the likelihood of an executive or his firm being charged with criminal violations.

The third line of defense is to undertake an honest self-assessment, and to consider the types of pressures that senior management and employees will encounter should the weakened state of the global economy continue.  Topics in the regulatory spotlight should be included in this assessment.  The intent here is to prepare for the possible pressures employees and senior management might face, thereby reducing the chance that hasty decisions are made in the heat of the moment. Ill-considered actions can carry serious penalties and act as a lightning rod for litigation by regulators, investors, and other third parties (such as credit providers).  Advance preparation will help your staff make faster and better decisions if the need should arise. 

You can't always remove that bull’s-eye on your back, but you can at least make the target less bright.

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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