bluuebunny/crossref_metadata_2025 huggingface dataset:
An Innovation in Thermoplastic, Reworkable Adhesive Pastes
Authors: Dietz R. , Peck D.
Published: June 2007

Today’s emerging markets in the electronic packaging industry require some unique properties in
adhesives, especially in die attach applications. In multichip module (MCM) applications,
for example, the low temperature reworkability of die bonds is of primary importance, particularly if
known good die (KGD) are not employed. If KGD are used in the MCM, a temporary,
reworkable die adhesive is also desirable for a KGD testing programme. Large area die on organic
substrates, which are key to the more portable, high power computers, require a very compliant
adhesive to absorb the high mismatch in expansions. An overview of the
present adhesive technologies reveals some serious limitations in their application and performance.
Traditional Ag epoxies, primarily because of their irreversible ‘thermosetting’ during
cure, do not fulfill all the material requirements. Thermoplastic chemistries are ideal candidates for
MCMs because of their reversible melting and resolidification properties. This paper details the
development of a novel silver loaded thermoplastic paste that overcomes most of the
deficiencies seen in present day adhesives. One of the main obstacles that
has hindered the use of thermoplastic pastes as an adhesive has been the slow solvent
extraction during the curing step. With current technology, this inherently slow solvent extraction
typically requires a complex process of first depositing a flat profile, then removing the solvent with a
pre‐drying step, and finally attaching the die by a heat/pressure step. A blend of components, hereafter referred to as DM4030, has been tested and compared
against conventional materials in the industry. Functional properties of adhesion, resistivity, wire bonding
and others are summarised for various temperature profiles. Long‐term reliability test results
are shown for temperature cycling, temperature/humidity (85° C, 85%
RH), and high temperature storage. For reworkability applications, die removal force as a
function of temperature is also presented.
Thick Film Microchannels: Design and Fabrication
Authors: Filippini D. , Fraigi L. , Gwirc S.
Published: June 2007

The study of relevant geometrical parameters for the design and
fabrication of thick film microchannels has been considered in this work. An analysis of geometrical
behaviour was performed applying linear regression techniques. This procedure allows the design of
structural elements (lateral walls) necessary for channels, predicting the final dimensions for
original screen pattern design. A 100 μm wide and 15 μm high microchannel was constructed
on the basis of the characteristics defined in the study.
Minimal Size Packaging Solutions: A Comparison
Authors: Greathouse S.
Published: June 2007

Known good die, flip chip and chip scale packages are technologies that offer various
advantages to the board manufacturer. A discussion of the different types of package options, their
methods of assembly, test and performance comparisons can help to resolve the general direction a
manufacturer might pursue for next generation systems. This paper attempts to give a perspective as
well as highlighting the areas of concern with the different options.
Fine‐line Passive Components for Hybrid Microelectronics
Authors: Kripesh V. , Bhatnagar S.K. , Osterwinter H. , Gust W.
Published: June 2007

A laser ablation technique has been used to fabricate conductor patterns on a 96%
alumina substrate to evolve passive fine‐line components and structures. This paper reports the method
of fabricating better fine‐line passive components for hybrid microelectronics application. The effect of
a laser beam on the conductor and 96% alumina (Al2O3) substrate was
studied in detail. Three predominant structures — namely debris, ablation border and irradiated
bottom layer — were seen on the patterns. A detailed study of the dendritic growth caused by
electrochemical migration on conductor lines fabricated by conventional screen printing and by laser
ablation techniques is also reported.
Application of Taguchi Methods to the Production of Integrated Circuits
Authors: Klein I.E.
Published: June 2007

Taguchi methods were applied to the production of thin RF integrated circuits on alumina. The substrates had 20 via holes of 1 mm in diameter, which led to a perturbation to the homogeneous spread of photoresist (by spinning) adjacent to the holes. Consequently, the overall process yield was 30%. Implementation of Taguchi methods resulted in a substantial increase in production yield — to a value of 90%, which was obtained repeatedly. Thus, a robust cost‐effective process was achieved.
Packaging Reliability for High Temperature Electronics: A Materials Focus
Authors: McCluskey F.P. , Condra L. , Torri T. , Fink J.
Published: June 2007

An overview of the concerns involved in the operation of electronic hardware at elevated temperatures
is presented. Materials selection and package design issues are addressed for a wide range of
packaging elements from the semiconductor chip to the box. It is found that most elements of common
high density device and packaging architecture can be used up to 200°C. However, gold‐aluminium
wirebonds, eutectic tin‐lead solder joints and die attaches, and FR‐4 boards will seriously degrade at
temperatures below 200°C. For these elements, alternative materials of construction are
recommended. Comparisons are made between package design for high power dissipation and that for
high temperature operation.
Advances in Packaging and Assembly Polymers
Authors: Gilleo K.
Published: June 2007

The Packaging Revolution of the ’90s, powered by the perpetual drive for smaller‐faster‐cheaper products, is placing increasing demands on the electronic materials sector. Down‐sizing, without a cost penalty, requires new materials and processes. Electronic
polymers are playing an increasingly vital rôle as area array, chip size components and packageless
designs become mainstream technologies. Micro‐Ball Grid Arrays (micro‐BGA), Chip Scale
Packages (CSP) and Chip‐on‐Board(COB) require new adhesives and encapsulants that enable the
use of low‐cost, high density organic‐based wiring and interconnect structures. Concurrently, new,
simplified processes are being developed in order to streamline high volume manufacturing. This paper discusses quick bonding film die attach adhesives, fast‐flow flip‐chip underfills,
and a variety of liquid encapsulants as well as new conductive adhesives designed for flip‐chip and
micro‐Package assembly. Process innovations include the new Printed Package concept and the
appealing simple Polymer Dip Chip method of flip‐chip assembly without paste deposition. The
intrinsic versatility and synergy afforded by new and emerging electronic polymers are helping the
industry meet the seemingly paradoxical challenge of smaller‐faster‐cheaper.
Popcorning in PBGA Packages During IR Reflow Soldering
Authors: McCluskey P. , Munamarty R. , Pecht M.
Published: June 2007

Plastic ball grid arrays (PBGAs) have been gaining increasing industry acceptance
as potentially the lowest cost packages for high pin count applications. The main factors for their
success include the inherent low cost of plastic packages, the high yields achievable with existing
assembly equipment, the density advantages of an area array and, in many cases, superior electrical
performance. The reliability of these packages with respect to solder joint fatigue has been extensively
studied; however, little has been published on their reliability with respect to
moisture‐related failure mechanisms during assembly, such as popcorning. In this
study, two types of plastic ball grid array packages, a 225‐lead full matrix array and a
256‐lead perimeter array, which were preconditioned by baking at 125°C for 24 hours
followed by exposure to 85°C and 30% relative humidity for 168 hours, were then
subjected to three passes of simulated infra‐red reflow at 1°C/s and
0.67°C/s. Subsequent examination using scanning acoustic microscopy and environmental
scanning electron microscopy revealed considerable delamination and cracking in both package types
reflowed at the higher ramp rate. This damage originated in the die attach and propagated along the
weakest interfaces in the package. At the lower ramp rate, a much smaller amount of delamination was
observed. This suggests that there is a critical ramp rate below which popcorn cracking can be
inhibited.
Planarisation of NiFe2O4 Thick Film Ferrite Inductors
Authors: Aleksić O.S. , Nikolić P.M. , Vasiljević‐Radović D. , Luković  , Durić S.
Published: June 2007

A variety of thick film planar inductors, designed for
applications in the HF range, were printed from conductive PdAg and NiFe2O4 ferrite paste on alumina substrate. Pure ferrite powder with a
nanometric particle size was used in the NiFe2O4 paste
preparation. The ferrite thick film layer characterisation was performed on small
spirals, after which the following inductor planar geometries were tested together with
ferrite layers: meanders, spirals, bispirals and solenoid in plane. Their impedance was
analysed with an impedance analyser in the MHz‐GHz range. The results
obtained were compared with the properties of the smallest cubic inductors and with
the literature data for planar inductors (theoretical and practical). A
comparison was made of the L geometries printed. It was observed that better
utilisation of the thick ferrite layers was achieved on L geometries with equally
distributed windings over the thick ferrite layers.
Plastic Ball Grid Array Attachment: Assembly and Reliability
Performance
Authors: Anderson L. , Primavera A.A.
Published: June 2007

As plastic ball grid array
(PBGA) components proliferate, card assembly questions arise about the robustness of the
module to card attachment process. A designed experiment was performed to measure the sensitivity of
card assembly yields to normal assembly process variation. Experimental variables include card
thickness, ball pad size on the card ball grid array (BGA) site, module moisture exposure
and ball planarity of a 225 I/O PBGA. Another set of PBGA test cards, assembled under optimum
process conditions, was subjected to accelerated thermal cycle (ATO) testing. ATC testing
also included a rework cell. Overall, the PBGA module attachment process demonstrated robustness.
The initial attach and reworked modules proved to be reliable. This paper focuses on the details of the
test conditions and the results.
Benefits of Thermoplastic Conductive Adhesive in Advanced Electronics Packaging Applications
Authors: Firmstone M.G. , Bartholomew P.M. , Paterson G. , Dietz R. , Robinson P.
Published: June 2007

Conductive adhesive alternatives to tin/lead soldering have mainly concentrated on
isotropic silver‐filled epoxy resins. These thermosetting polymers do not offer a universally
successful solution and this may be fundamental to the use of epoxy itself. Another route being developed in a joint programme between Multicore Solders Ltd and Diemat, Inc.,
is based on thermoplastic polymers and offers benefits in the areas of reworkability, low modulus, low
joint stress and possibly environmental stability. The novel process for compounding with silver can
produce an order of magnitude improvement in electrical and thermal conductivity compared with
typical epoxy/silver formulations, and initial environmental reliability data demonstrate compatibility
with tin/lead coated components and board finish. A current application
is outlined where a Hi‐Rel silicon on silicon hybrid (MCM) is realised using the
silver/thermoplastic adhesive for both semiconductor die and passive chip components.
High‐quality RF Inductors in LTCC
Authors: Müller J.
Published: June 2007

Low temperature cofired ceramics
(LTCCs) combine the advantages of both multilayer substrates with excellent high‐frequency properties and a high‐conductivity metallisation. The possibility to realise passive components embedded in the glass ceramics increases the scale of integration. Inductors are designed as single‐layer (planar spiral) or multilayer (3D) arrangements of narrow conductive traces with useful values up to a few hundred nanohenry. This range makes them useful for high‐frequency applications. Although the conductor pastes used have a low resistance, the maximum quality factor of these coils seldom exceeds 60. The decisive parameter in this regard is the line thickness which is normally 10–15 μm. A novel technique based on laser scribed canals permits conductor patterns with an almost square cross‐section, thus reducing the line resistance by a factor up to 10. Coils manufactured by this method have a considerably improved quality and are able to withstand high currents. This property widens the range of applications for LTCCs into the field of high‐power electronics.
Financial globalisation: Is it a threat to key central bank functions? The case of Mauritius
Authors: Adams John
Published: June 2007

There has been much discussion over recent years of the likely impact of ‘financial globalisation’ on the financial services sector specifically and on the stability of national economies. This paper examines how and to what extent the ‘threats’ from financial globalisation manifest themselves in relation to the functions of regulation and supervision carried out by central banks. A theoretical perspective on these issues is put forward followed by an analysis of the specific case of a small island economy which is embracing financial liberalisation and competition, Mauritius.
Regulation of statutory audit in the European Union: New developments
Authors: Dewing Ian P. , Russell Peter
Published: June 2007

This paper examines latest thinking and new developments in the regulatory framework for statutory audit at European Union (EU) level. It follows an earlier paper, published in this journal. Since 1999 when the paper was drafted, even more developments have occurred both at an EU level and in the USA, which are likely to have a significant impact on statutory audit in the EU in years to come. Latest developments are reviewed in three areas: profession related issues; company law issues; and, accounting and auditing standards. The paper concludes that significant advances have been made towards completion of the regulatory framework of statutory audit in the EU. What remains of concern is a lack of progress towards adoption of international auditing standards. Unless financial statements are both prepared and audited in the same way, it is difficult to see how financial information in the EU can ever be truly harmonised.
Incentive compatibility and the optimal design of deposit protection schemes: An assessment of UK arrangements
Authors: Hall Maximilian J.B.
Published: June 2007

Late in 2001, the Financial Services Authority (FSA) introduced a new set of arrangements for
deposit protection in the UK. While the changes involve a welcome improvement on previous arrangements, much more could be done to enhance their overall cost‐effectiveness. This paper explains the flaws in previous and current
arrangements and, using a relatively crude but nevertheless objective measure of the extent of their compliance with International Monetary Fund (IMF) best practice ‘rules’, compares their degree of ‘incentive‐compatibility’ (or economic efficiency ‐ ie the extent to which they minimise the problems created by adverse selection, moral hazard and principal/agency conflict) with the counterpart schemes operating elsewhere in the European Union and beyond. In this way, areas for future improvements are identified, which will ideally require accommodating changes in the guiding Deposit Guarantee Schemes Directive.
To polarise or not to polarise
Authors: Smee Paul
Published: June 2007

Polarisation has been an integral part of how the retail financial services market operates in the UK, since its implementation in 1988. The term ‘polarisation’ refers to the practice whereby financial advisers must belong to one of two groups: either independent advisers able to advise the consumer on a range of financial services products, or tied agents who can only advise on the products of one company. In this paper, the author first sets out how the process of polarisation was implemented, before going on to consider the impact of the current two‐stage review by the Financial Services Authority (FSA) of competition in financial service provision. He argues that while some change in the retail financial services market would be helpful there are considerable dangers in the FSA’s clear recommendation that polarisation should be abolished.
UK energy trading regulation: The EMP regime
Authors: Swan Edward J. , Fox Darren
Published: June 2007

The UK Financial Services and Markets Act (FSMA) 2000 has introduced a new ‘lighthanded’ regulatory regime for energy market participants. The following paper shows how it changes the playing field for energy traders, producers and distributors.
Information exchange and the offshore financial centres
Authors: Hay Richard J.
Published: June 2007

This paper considers supranational initiatives ‐ particularly those emanating from the Organisation for Economic Co‐operation and Development, the Financial Action Task Force and the Financial Stability Forum ‐ proposing changes in the regulation of offshore financial centres. The implications of the withdrawal of US support for elements of the initiative are reviewed. The underlying rationales for change are considered, as are the probable and appropriate response for the stakeholders in the offshore centres, including governments, financial institutions and clients.
FSA Consultation Paper 121 and the move to depolarisation ‐ A critical analysis
Authors: Ring Patrick
Published: June 2007

The Financial Services Authority’s (FSA) Consultation Paper 121 suggesting depolarisation in the retail financial services sector has generated a great deal of debate. The motivation for the reforms, primarily to improve the position of the consumer, cannot be disputed. Nevertheless, in attempting such a wide‐sweeping change, it is clear that the reforms could bring difficulties as well as improvements. This paper argues that, to the extent that the current polarisation regime is detrimental for the consumer, this can be addressed without dismantling the basic framework of the current advice system. It acknowledges that there is a need for greater consumer education in this area, and that more needs to be done to address the needs of lower‐income consumers. Nevertheless, it is argued that the advantages anticipated as a result of the more radical reforms in the Consultation Paper are likely to be accompanied by problems that could negate the overall benefit accruing to consumers.
Financial regulation of public limited companies in the UK: A way forward post‐Enron
Authors: Fearnley SteIIa , Brandt Richard , Beattie Vivien
Published: June 2007

On 16th April, 2002, the authors gave oral evidence to the House of Commons Treasury Committee Inquiry into Financial Regulation of Public Limited Companies which was set up following the collapse of Enron. This paper is adapted from the written submission to the Committee on which their oral evidence was based. The authors argue that the Enron collapse provides an opportunity for regulators to stand back and consider fundamental issues associated with the regulatory framework for financial reporting, auditing and corporate governance in the UK. They challenge the financial reporting framework as being muddled between the concepts of stewardship and decision usefulness. Company balance sheets are an amalgam of figures based on historical cost and accounting estimates. The increasing use of financial instruments and the inclusion of intangibles makes valuations complex and judgmental and therefore much more dfficult to audit. Incentives in the capital markets which drive the behaviour of all participants should be considered to ensure that the current system does not encourage dysfunctional outcomes and excessive rewards. The personal incentives for partners in audit firms are of particular interest as a potential key influence on auditor independence. It is suggested that non‐executive directors should be mandated to protect the interests of investors. The authors counsel against kneejerk reactions to the Enron collapse as a number of changes such as the transfer of regulation of securities listing to the Financial Services Authority (FSA) and the establishment of the Accountancy Foundation need time to settle down. They believe that auditor rotation will introduce costs without clearly identifiable benefits and are opposed to wholesale banning of auditors providing non‐audit services to their clients.
A fraud detection model: A must for auditors
Authors: Krambia‐Kapardis Maria
Published: June 2007

This paper addresses a fundamental issue in financial regulation ‐ that of the auditor’s ability to detect material irregularities. If an auditor is to detect irregularities he/she must also be cognisant of fraud aetiology by drawing on such other disciplines as psychology, criminology and sociology. The paper first provides a critique of existing fraud aetiology models and then describes the ROP Fraud Risk‐Assessment Model constructed by the author in a study of convicted serious fraud offenders in Australia. The main concern of the paper is with the eclectic fraud detection model (EFD), of which the ROP model is a component. The EFD model is aimed at enhancing the auditor’s fraud detection ability, it has been constructed by the author and its utility successfully tested in Australia in a survey of auditors. Finally, the policy implications for auditors of the findings obtained are also considered.
Mindsets and consequences in corporate governance and control: Part 1
Authors: Edrich Carole
Published: June 2007

This paper sets out to examine some of the current challenges in corporate governance and control. It comprises two parts. Part 1 examines formal requirements and how they have been interpreted and implemented, deriving some pointers
for the way forward. Part 2 examines the more practical implementation issues of corporate governance and risk management frameworks, and will be published in Volume 10, Number 4 of the Journal.
Senior managers and discipline
Authors: Ryley Philip , Virgo John
Published: June 2007

The Financial Services and Markets Act 2000 (the Act) establishes extensive investigative powers and disciplinary powers that may be exercised by the Financial Services Authority (FSA) in certain circumstances. The Act further empowers the FSA to take disciplinary action against approved persons, as well as authorised firms. This paper examines the circumstances in which senior managers may find themselves personally culpable for regulatory breaches and become the subject of disciplinary proceedings.
Keeping dirty money and terrorist funds away: The proposed Money Laundering Regulation of the Swiss Federal
Banking Commission
Authors: Hüpkes Eva H.G.
Published: June 2007

On 9th July 2002, the Swiss Federal Banking Commission (SFBC) published for consultation a proposal for a new SFBC Money Laundering Regulation. The draft regulation proposes stricter rules for banks and securities dealers to prevent money laundering and financing of terrorism and details specific due diligence requirements with respect to business relationships with politically exposed persons. The draft incorporates the lessons drawn from money laundering cases in Switzerland as well as international developments.
Risk‐based regulation in the Financial Services Authority
Authors: Sergeant Carol
Published: June 2007

Regulation imposes both direct and indirect costs. Regulators have to be conscious of these costs and the finite resources available to them. The paper outlines the way in which the Financial Services Authority (FSA) has developed a system of financial supervision under which resources are directed to those issues, firms and consumers which pose the greatest risks or opportunities when judged against its statutory objectives. The application of a risk‐based approach to supervision is effectively required by a number of principles of good regulation enshrined in legislation along with a requirement to undertake cost‐benefit analysis when devising new rules. As well as informing high‐level aims, the paper shows how the risk‐based approach, through the FSA’s planning and budget process and firm specific risk assessments, affects decisions on supervisory issues and resource allocation. It also outlines how the FSA will account to government for its performance.
Section 20 versus investment house underwriting of small equity initial public offerings in the USA
Authors: Beneda Nancy L.
Published: June 2007

This study examines corporate equity initial public offerings (IPOs) underwritten by Section 20 subsidiaries of commercial banks relative to those underwritten by non‐Section 20 underwriters (investment houses). Consistent with a ‘net certification effect’ for banks, corporate equity IPOs underwritten by Section 20 subsidiaries have lower underpricing than those underwritten by investment houses. Secondly, commercial banks brought a relatively larger proportion of small equity IPO issues to market, during the period of this study. Contrary to the contention that universal banking restricts the availability of financing to small firms, bank underwriting appears to benefit small firms. Further, Section 20s do not increase underwriting fees to offset the effect on potential profits from lower underpricing. This study also finds that the focus of Section 20 on small IPOs results in higher quality for the IPOs they underwrite, as indicated by a lower standard deviation of underpricing.
Compliance competent life assurance companies: A partnership approach
Authors: Edwards Jonathan
Published: June 2007

This paper, set in the context of a rationale for financial regulation, considers how the Financial Services Authority’s (the regulator) approach to establishing compliance competent organisations in the life assurance sector (the regulated) has evolved from a prescriptive approach to one of cooperation with those regulated, in order to establish a working partnership. It focuses on investment business and the resulting importance of conduct of business regulation. It reviews the regulator’s approach, linking academic theory to existing practice and the progress made in the developing and evolving relationship between the regulator and the regulated. It establishes what steps/phases have already taken place within life assurance companies seeking to incorporate and change their compliance culture. It creates a template for the review of progress in seeking to achieve the regulator’s goal of compliant competent organisations, while identifying the essential elements of the new partnership approach. This approach will not only meet the regulator’s stated aim of improving consumer protection but also benefit life assurance companies themselves.
Lending decision making and the Competition Commission report on the provision of banking services to small firms
Authors: Ashton John K. , Keasey Kevin
Published: June 2007

This paper examines the Competition Commission report on the provision of small and medium‐sized enterprise (SME) banking services in the UK. The examination will centre on the perceived clash between the ‘remedies’ proposed by the Competition Commission and the present forms of lending decision making, a key function in business banking. It is concluded that the Competition Commission assessment of the provision of banking services by clearing banks to small firms, directs scant attention as to how banking services are ‘manufactured’ or banks actually make decisions and operate in practice.
Revision of the Investment Services Directive
Authors: Herbst Jonathan
Published: June 2007

The revision of the Investment Services Directive is one of the most significant proposals under the Financial Services Action Plan. Although not likely to be implemented until the end of 2006, it is hoped that many of the consequent changes to legislation and the FSA Rules will be in place before then, and it is, therefore, crucial to keep track of its progress through the Lamfalussy legislative process. This paper discusses the shape of the Commission’s final proposals, which were published in November, 2002, and how they will change the existing investment services regime in the UK.
The Investment Services Directive ‐ Routemap or obstacle course?
Authors: Knight Angela
Published: June 2007

The EU’s Financial Services Action Plan (FSAP) which seeks to harmonise financial services
across Europe has the potential to bring great benefits to the investment community ‐ particularly the UK which already has a wealth of expertise. But in order for it to succeed the rule makers need to recognise some basic principles ‐ principally that they should focus on what is necessary to achieve their goal, rather than what is merely desirable. This paper outlines these principles of successful regulation and looks specifically at some of the problems in the most controversial of the current proposals ‐ the Investment Services Directive (ISD).
All in the name of competition: European securities exchanges
Authors: Arlman Paul
Published: June 2007

European securities exchanges including futures and options markets as well as cash equity exchanges are liquid, efficient and competitive, while making the most of technology’s vast possibilities. On the road to the integrated European securities market, they face different legislative and non‐legislative barriers. The EU legislative framework must be designed in such a way as to be able to catch up with competitive and technological developments. Strong and modernised EU financial legislation should be beneficial not only for the securities markets but more importantly for the EU economy as a whole. An efficient and integrated securities market is vital in the process of raising the level of competitiveness, the efficient allocation of capital, mobilising savings and disciplining management. Many European countries need to overhaul their pensions systems, since ageing populations become a rising burden on state finances. Thus, most EU member states are likely to stimulate the creation of partially equity‐based private pension provision. This paper tries to position the current role of the securities exchanges. It also touches upon the legislative environment and technological developments they employ that help them continue to remain competitive on the global scene. In conclusion the author states that the EU legislators as well as the securities exchanges themselves have to make great efforts in order to achieve the best possible level of service for their clients.
European Court of Justice opens the way for pan‐European occupational pensions
Authors: Bexhed Jan‐Mikael
Published: June 2007

This paper is largely based on the European Court of Justice’s (ECJ’s) judgment of 26th
June, 2003 in Case C‐422/01 Skandia and Ramtedt v Riksskatteverket (the judgment). The author was counsel for Skandia and Ramstedt in the ECJ. In the judgment the ECJ has maintained that national tax legislation regarding employer‐paid occupational pension insurance contravenes EC law by discriminating against insurance taken out with an insurance company in another member state. This legislation is, therefore, illegal and may not be applied by national courts and authorities. In its judgment the ECJ rejects the argument that fiscal discrimination is necessary in order to ensure fiscal cohesion, the effectiveness of fiscal controls, the need to preserve the tax base or competitive neutrality. The judgment concerned Swedish tax legislation but the ruling is applicable in all member states.
Post‐Enron developments in UK audit and corporate governance regulation
Authors: Dewing Ian P.
Published: June 2007

This paper examines post‐Enron developments in UK audit and corporate governance regulation. It considers the latest government‐initiated reviews into audit regulation, specifically those conducted by the Co‐ordinating Group on Audit and Accounting Issues and the DTI Review Team, and into corporate governance, specifically those undertaken by Derek Higgs and Sir Robert Smith. The paper notes that the reviews were undertaken in the context of developments initiated both before and after the collapse of Enron, including, respectively, the new system for the regulation of the UK accountancy profession as established by the Accountancy Foundation, and the US Sarbanes‐Oxley Act. The reviews have been welcomed by government and thus should play a large part in setting the agenda for the future regulation of UK audit and corporate governance. The proposals for auditing share a number of characteristics with the recommendations of a pre‐Enron empirical study which investigated the regulation of UK listed company audit, although significant distinctions remain. The proposals for corporate governance continue the ‘comply or explain’ approach and do not recommend passing its regulation from the Financial Reporting Council to another independent body of ‘stature’ such as the Financial Services Authority (FSA). It is concluded that key to successful implementation of recent proposals will be the need, for audit, to demonstrate that there is no cosy relationship between regulators and the auditing profession, especially the ‘Big Four’ firms, and, for corporate governance, a willingness to look outside the ‘one‐size‐fits‐all’ approach.
Case study: Where is the risk in transaction monitoring?
Authors: Veyder Frank
Published: June 2007

How to fight money laundering and comply with anti‐money laundering legislation in a way that is both cost effective and precise? Many banks are struggling with this question. This paper presents a case study discussing the pros and cons of implementing a transaction monitoring system. Dexia Banque Internationale Luxembourg (Dexia BIL) chose ERASE (Efficient Risk Analysis System Enhancement), a monitoring solution provided by NetEconomy of the Netherlands. The paper examines why such a system is needed, what kind of objectives a system should meet, how to identify unusual and suspicious activity, and the potential problems that may be encountered.
Not another damned exam!?!
Authors: Bland David
Published: June 2007

This piece critically reviews the potential impact of the FSA’s application of its ‘Operational
Risk’ approach to regulation. It uses the Treasury proposals for ‘Sandler’ products as an
example of the disastrous results that can arise from the combination of political direction of product design with inept regulation.
Integration of EU financial markets supervision: Harmonisation or unification?
Authors: Grünbichler Andreas , Darlap Patrick
Published: June 2007

The paper highlights what are currently the most relevant aspects in the debate surrounding the possible reform in the institutional setup of financial markets regulation and supervision, not least about the future role of Central Banks. As a preliminary question, the definition of financial stability is addressed. Then, the importance of stability for the economy and the specific role of regulators and supervisors and possible regulatory failure are discussed. On this basis, a possible evolving design for regulation and supervision on a national and a European level has to be checked against optimality, taking into account the different objectives of state intervention into the market. Finally the state of play in the institutional reform of European financial market legislation is described.
Taxation and corporate strategy in the single market
Authors: Barker Travis
Published: June 2007

In order to realise economies of scale in the European single market for investment funds, asset managers have typically sought to distribute a single range of investment funds into as many European markets as possible. They have therefore developed an ‘offshore’ business model: of establishing a single fund range in, say, Luxembourg or Dublin, and distributing that range throughout the EU. European legislation has evolved in support of that business model ‐ in particular, the UCITS Directive. However, persistent tax discrimination continues to undermine cross‐border sales. Tax discrimination is illegal, and the European Court of Justice has regularly ruled against countries with discriminatory fiscal regimes. The vagaries of the judicial process, though, and recent jurisprudence, may unwittingly lend strength to discrimination. Should asset managers therefore revisit their offshore business model, or should European institutions revisit the way they address issues of taxation in the Union?
Has the Security and Exchange Commission’s Rule 421 made mutual fund prospectuses more accessible?
Authors: Johnson Don T.
Published: June 2007

A mutual fund must provide prospectuses to each potential investor before the fund may accept monies from that individual. The prospectuses are a major source of information about the fund and yet they have historically
been largely unreadable by the public. While the poor readability has been a problem in the past, it is becoming a greater problem as the number of individuals responsible for their own investment decision making increases. Recognising this problem, the Securities and Exchange Commission (SEC) adopted Rule 421 in 1998, requiring that prospectuses be made more readable as measured by a subjective reading of the document. This study applies four objective tests to mutual fund prospectuses from both preand post‐Rule 421 periods and finds substantial evidence that mutual fund companies have complied with Rule 421 and are producing prospectuses that are much more readable and accessible by the general public.
Mutual fund market timing: A tale of systemic abuse and executive malfeasance
Authors: McCallum James B.
Published: June 2007

The mutual fund market timing scandal and continuing investigative probes read like a Greek tragedy. It is beyond comprehension how senior investment management executives would become willing accomplices in fleecing their clients’ assets, impairing their portfolio managers’ investment returns and destroying the reputations of some of the industry’s greatest fiduciary brands. This paper looks at the systemic roots of the scandal and how Canary Capital Partners enlisted the help of Bank of America Securities Executives to market time the bank’s inhouse mutual funds in violation of SEC forward pricing regulations.
Does regulation make it worse?
Authors: Jackman David
Published: June 2007

What is the purpose of regulation? What are we really trying to achieve? What should the world look like after it has been regulated? Many “stakeholders” assent to the concept of regulation as a tool to fix a problem, but is there any clear idea about what the outcomes should be? It is very easy to become enmeshed in the mechanisms and processes of compliance without developing a grasp of the principles underlying regulation. This paper argues that regulation is based on ethical drivers that, if we understand them better, will help direct us towards a more effective and efficient system. Incoherent and excessive regulation can diminish individuals’ and firms’ ability to comprehend these principles and apply them in everyday judgments. A culture of dependency can result. Increased regulation of an undirected kind could indeed make matters worse.
Collective action with respect to bonds issued under German law
Authors: Haag Hendrik , Weiβ Daniel
Published: June 2007

Bonds governed under German law would normally not contain collective action clauses, ie provisions dealing with majority decisions by bondholders by which certain bond terms may be altered or waived. This is because it is uncertain whether, in the absence of a statutory basis, a decision taken by a majority of bondholders would be binding upon a dissenting minority. For certain circumstances, however, a statutory basis exists in the form of a law enacted in 1899 which, during the last decades, has been very rarely used. This paper discusses in what cases the law may be invoked, what decisions can be made by bondholders and what procedural requirements must be observed for getting to a binding and unchallengeable decision.
The FSA: The first six years
Authors: Foot Michael
Published: June 2007

Michael Foot, one of the initial managing directors of the Financial Services Authority when it was founded in 1998, looks back over his six year period in office. He identifies the main external and internal challenges that the new body faced and explains how management sought to articulate and then deliver a new regulatory culture and language. He notes the continuing consumer unhappiness with many aspects of the financial services they buy. If we are to get away from this cycle of dissatisfaction, we must greatly improve the currently woeful level of financial understanding in the UK. The FSA itself faces a major extension of its powers in the near future and, at the same time, has to complete the transformation programme it began in 1998.
Europe’s securities regulators working together under the new EU regulatory framework
Authors: Docters van Leeuwen Arthur , Demarigny Fabrice
Published: June 2007

The Committee of European Securities Regulators (CESR) has an important role in the fourlevel Lamfalussy process for regulatory reform. At present, CESR produces at level 3 administrative guidelines, interpretative recommendations, common standards, peer reviews and comparisons of regulatory practice to improve consistent application and enforcement of EU legislation. These activities can be divided into three categories: (i) coordinated implementation of EU law, (ii) regulatory convergence and (iii) supervisory convergence. Within each of these categories additional activities of CESR should be developed further while also recognising the role of other key players such as the member states and the European Commission. With regard to the coordinated implementation, it is considered useful to keep alive the network of CESR experts who prepared CESR’s level 2 advice to the European Commission to fulfil a permanent advisory role. Furthermore, harmonised rulemaking powers for national securities regulators would facilitate further coordinated work at level 3 with respect to regulatory convergence. In this respect, it may be worthwhile for the Commission to take the initiative, where and when appropriate, to endorse common approaches of CESR members as a proper manner for applying EU law. Supervisory convergence could be enhanced by undertaking joint investigations by CESR members and setting up information databases on enforcement activities. In addition, the Monitoring Group encouraged CESR to set up an internal system of mediation for solving conflicts between national securities regulators.
The compliance function in banks
Authors: Edwards Jonathan , Wolfe Simon
Published: June 2007

The Basel Committee on Banking Supervision under the auspices of the Bank for International Settlements (BIS) published a consultation paper in late 2003 on the compliance function in banks. The aim of the consultation paper is to set out the views of banking supervisors and provide basic guidance for banks. Whereas there is no attempt to prescribe a uniform approach, a clear set of general principles is laid down for the role of the compliance function within banking organisations. Furthermore, recognition is given to the fact that diversity exists between banks with respect to their internal organisation of the compliance function and also to diversity in the legal and regulatory environment affecting the compliance function across jurisdictions. The core objectives of this paper are to examine the BIS approach to the compliance function and look at how this is likely to evolve. The authors draw on experience from the UK life assurance industry where substantial inroads have been made to embed a compliance competent culture within such types of financial institutions. A partnership approach is highlighted as essential to achieving a viable and meaningful compliance function. Finally, an ethical approach is explored as the possible future direction for banks. The first section reviews the new principles for the compliance function; the second section describes issues that arise; the third section analyses a partnership approach and explores an ethical approach; and the final section provides a summary and conclusion.
Implementing Basel II in the Norwich and Peterborough Building Society
Authors: Pritchard Jeffrey
Published: June 2007

This paper describes the approach taken by the Norwich and Peterborough Building Society (the Society) in implementing models, policies and practices to meet the expected requirements of the third Capital Adequacy Directive as described in consultation papers issued by the Basel Committee, the EU and the Financial Services Authority. The Society is a medium‐sized mutual retail banking operation in the UK providing savings, current accounts and mortgage lending services to approximately half a million customers and operates predominantly in the East Anglia area of England.
The new market abuse regime in Greece: A step towards increased market transparency or a new source of confusion?
Authors: Staikouras Panagiotis K.
Published: June 2007

The Greek insider trading and market manipulation (market abuse) regime is in the process of transformation by the new Code on Capital Market, which internalises the provisions of the 2003 Market Abuse Directive. The new market abuse prohibition follows an effect‐oriented approach, which, in conjunction with the application of strict administrative law sanctions, is likely to expand the scope of liability. Though, however, the new market abuse regime will facilitate the prosecution of insiders and manipulators, a number of issues are left open to discussion. Consequently, supervisory authorities and courts are required to display particular care in the interpretation and application of the new regime in order to ensure effective enforcement.
Personalities of risk/reward: Human factors of risk/reward and culture
Authors: Mainelli Michael
Published: June 2007

There is a gap linking organisational risk profiles to real people. Yet people are core to all risk/reward decisions, both at an organisational and a personal level. If an organisation is the aggregate of the decisions made by its people, how can aggregation be carried out sensibly; how can concordance between the organisational risk/reward profile and its people’s be ensured; what tools might help? The paper concludes with suggestions for areas of potentially fruitful research into how personal risk/reward profiles can be assessed and analysed to inform organisational risk/reward decisions.
Economic capital in the limelight
Authors: Mueller Hubert , Siberón José
Published: June 2007

“Economic capital (EC) is in – Value at Risk (VaR) is out!” This statement by James Lam, well known to be the first Chief Risk Officer (CRO) worldwide, at the April 2004 Enterprise Risk Management (ERM) Symposium in Chicago, caused quite a reaction by the attendees. What is EC? Why are banks and insurance companies focused on calculating EC? What are the differences between EC and regulatory or rating agency capital? What are rating agencies’ views towards EC? This paper, summarising a panel on this topic, which was held at the ERM Symposium in Chicago in April of this year, attempts to answer these questions, focusing on the application of EC to life insurance companies.