bluuebunny/crossref_metadata_2025 huggingface dataset:
EUROPEAN INVESTMENT FUNDS: THE UCITS DIRECTIVE OF 1985 AND THE OBJECTIVES OF THE PROPOSAL FOR A UCITS II DIRECTIVE
Authors: CIANI DANIELE
Published: January 2008

The European single market, as laid down in the Treaty of Rome of 1958, aims at the suppression of the concept of national residence as far as economic relationships are concerned. In the field of financial services, the creation of the single market is based on the fundamental principles of mutual recognition and minimum harmonisation. The setting up of such a market allows all financial institutions to operate under the freedom of establishment and to provide services cross‐border, benefiting from the ‘European passport’. The responsibility of the supervision of the institution is attributed to the home country authorities. Directive 611/85/EEC covers the market of professional management of investment funds (UCITS), which collect savings from a multitude of investors and invest in transferable securities. The directive allows the marketing of units of UCITS, as long as a wide set of prudential restrictions is fulfilled. At the end of 1994, UCITS in Europe were 6,818, of which around 32 per cent has been commercialised cross‐border. In 1994, the European Commission presented a new proposal to amend the UCITS directive, widening its scope and introducing several important modifications.
THE CHANGING NATURE OF FINANCIAL REGULATION IN IRELAND
Authors: STEWART JIM
Published: January 2008

This paper examines current issues and recent changes in financial regulation in Ireland. One of the main changes relates to the regulation of Irish financial markets by the central bank. Other bodies will also be, involved in different aspects of regulation. One of the main issues confronting the regulation of markets and financial institutions is cooperation from other jurisdictions. This issue has not been addressed to date. A second issue arises from the fragmentary nature of proposed regulation, with an overreliance on reporting of breaches of rules rather than active investigation.
ADVANCE FEE AND PRIME BANK INSTRUMENT FRAUDS
Authors: Bosworth‐Davies Rowan
Published: January 2008

A few years ago, I was instructed to act in the defence of an ambitious but remarkably naive assistant bank manager who was being investigated for the part he had played in facilitating a prime bank instrument fraud. This poor chap had unwittingly become the victim of a team of highly professional, international bank fraudsters who specialised in the creation of fraudulent bank paper. He had been approached with offers of substantial deposits to be made with his bank, in return for which the fraudsters wanted to be provided with guarantee letters. Naturally, the young manager was delighted to be able to assist and he provided them with every assistance. Just as they were leaving the con men asked him if he could provide them with a brief letter setting out the terms of the potential agreement and indicating the conditions under which such guarantees would be given.
SPECULATIONS ON THE CONFLICT OF DISCOURSES: FINANCE, CRIME AND REGULATION
Authors: STANLEY CHRISTOPHER
Published: January 2008

The paper assumes a conflict between the discourses (domains of language) of finance, criminality and regulation. It suggests that in the recent past transgression of codes has become the norm in financial services practices. Utilising the idea that profit orientated organisations and operatives are crimogenic and that the border between organised economic activity and organised criminality is negotiable, it further suggests that the strategic deployment of nomination in relation to economic activities involving financial services serves to neutralise responses which would ordinarily classify these activities as deviant and subject to orthodox criminalisation. Without recourse to unified definitions and standards of criminality, the effectiveness of rational regulatoiy responses is flawed from the beginning. The paper raises broader questions regarding governmentality, legitimation and anomie. The deregulation, technologisation and internationalisation of the London financial markets has served to remove a central source of regulator authority (the State and its institutional agencies). Regulation through compliance suggests that the responsibility for legitimation and the production of values and ethics resides with the practitioners themselves who operate in a state of anomie (normlessness) in response to risk (financial risk and norm‐breaking risk). The absence of a grounded discourse of criminality operative within the con sciousness of practitioners and regulators enables ethical and moral relativity to flourish. The paper ends with a call for a restatement of criminological ‘labelling’ theory and for this to become an element in the informing theoretical criteria in future studies of fraudulent activity.
THE COLLAPSE OF BARINGS: THE LESSONS TO BE LEARNT
Authors: HALL MAXIMILIAN J.B.
Published: January 2008

On 26th February, 1995 much of the UK merchant banking group Barings was placed in administration following a failed attempt by the Bank of England to find a buyer in the wake of massive losses incurred on unauthorised trades. The group, however, was subsequently bought by the Dutch financial services group ING. While recognising that many parties contributed, directly or indirectly, to the collapse of Barings, this paper focuses on the role played by the Bank of England as the main UK supervisor of the Group. It draws upon the findings of the official enquiries conducted in both the UK (by the Board of Banking Supervision) and Singapore (on behalf of the Singapore Ministry of Finance).
KEY DIFFERENCES IN REGULATORY APPROACHES: WHAT DO THEY MEAN IN PRACTICE?
Authors: TATTERSALL JOHN
Published: January 2008

This paper draws attention to a number of significant differences in the approaches adopted by regulators around the world and, more specifically, in the approach adopted by European regulators in the implementation of the Capital Adequacy Directive. It comments on the tools available for regulators in their oversight of financial markets, and argues for significant changes in the approach presently adopted: regulators should devote far more attention to the quality of internal controls and risk management procedures exercised by financial services institutions, and should encourage the public disclosure of meaningful information about the risks undertaken by financial services institutions and the ways in which they manage such risks. The paper discusses the skills required of regulators if they are to be effective in the changing financial services industry, with particular implications for their training, development and remuneration. Finally, the paper suggests that the exchange of information between regulators on individual financial services institutions and groups must be improved.
US CFTC ISSUES ADVISORY APPLICABLE TO CPOS OF OFFSHORE COMMODITY POOLS
Authors: HOLLAND WEST M. , DICKENSHEID DIANE M.
Published: January 2008

This paper first generally describes the requirements under US federal law to register as a commodity pool operator (CPO), and the disclosure, reporting and record keeping obligations which normally apply to registered CPOs. It then discusses in detail two particular sources of relief from certain of these disclosure, reporting and record keeping obligations — an Advisory issued by the US Commodity Futures Trading Commission (CFTC) on 11th April, 1996, and CFTC Rule 4.7 — and compares the requirements to qualify for, and relief available under, the Advisory and CFTC Rule 4.7.
Proposal for a Directive on systemic risk in payment systems
Authors: Vereecken Marc
Published: January 2008

The past decade, with its unprecedented surge in financial activity and the occurence of financial crises, has been one of increased awareness on the part of both regulatory authorities and market participants of payment system's potential for propagating and amplifying financial shocks, especially in a cross‐border context. This has led the European Commission to propose a Directive aiming at reducing systemic risk in payment systems. Systemic risk is the risk that the illiquidity or failure of one participant in a payment system, and its resulting inability to meet its obligations when due, will lead to the illiquidity or failure of other participants in that system, with, at worst, knock‐on effects in the financial markets at large. This paper draws the background and describes the contents of the Commission's proposal to reduce systemic risk.
Analysing systemic risk in banking and financial markets
Authors: Shah Atul K.
Published: January 2008

The deregulation of international banking and financial markets has raised a number of concerns about their fragility and risk of collapse through systemic contagion. A large amount of research has been conducted to explore policy solutions to this problem. However, there is little work in the literature which attempts to understand the various components and dimensions of systemic risk. This paper develops a comprehensive understanding of systemic risk, by using the theoretical framework provided by Perrow in his seminal book, ‘Normal Accidents’. It elaborates and exposes three of the central components — risk, complexity and coupling, which together make the modern global financial system significantly fragile. It is hoped that this understanding will create a common basis for future discussions of systemic risk and also help towards developing policy reforms.
Redrawing the regulatory map: A proposal for reform
Authors: Taylor Michael
Published: January 2008

In this paper Dr Taylor outlines his proposals for a radical shake‐up of the UK's system for regulating financial services. Market developments over the last decade mean that the existing boundaries between regulators, which are based on the traditional distinctions between banking, securities, and insurance business, are no longer appropriate. Instead, the regulatory system needs to be configured around two government Commissions, pursuing the objectives of financial stability and consumer protection respectively.
Legal update
Authors: Gray Joanna
Published: January 2008

The decision of the House of Lords in the Preddy appeal has led to a string of appeals against conviction to the Court of Appeal from individuals convicted under s.15 Theft Act 1968. On 25th October the Court of Appeal quashed the convictions of seven such appellants as being rendered unsafe in law by the Preddy judgment. In the course of their decision the Court of Appeal outlined alternative charges which may be appropriate in cases of dishonestly obtaining funds now that the use of s.15 has been curtailed by the decision in Preddy. These are: theft; false accounting contrary to s.17 Theft Act 1968; evasion of liability by deception contrary to s.2 Theft Act 1978; procuring the execution of a valuable security contrary to s.20 Theft Act 1968; obtaining services by deception contrary to s.1 Theft Act 1978 (a less attractive option after R v Halai 1983); conspiracy to defraud; attempts.
SIB unsuccessful in challenge to judicial review of its investigation of Interdata (UK) Ltd R v SIB ex parte Interdata (UK) Ltd
Authors: Gray Joanna
Published: January 2008

Interdata (UK) Ltd, and in particular a director, Mr Colin French, devised a computer program to provide information on past price movements of shares to investors. The SIB's concern with the marketing of this programme by Interdata (UK) Ltd was that it might constitute the provision of investment advice and therefore require authorisation under the Financial Services Act 1986 (FSA). For that reason, SIB had been showing concern for some months and Interdata (UK) Ltd had therefore shown SIB the operation of the program. However, without warning on 10th September, 1996 Interdata received a letter (dated 9th September) from SIB pursuant to its power of investigation in s.105 FSA addressed to Mr French requiring him to produce by 4.30 pm on 12th September, 1996 the following categories of documents:
‘Obtaining property by deception’, mortgage fraud and funds transfer
Authors: Gray Joanna
Published: January 2008

The appellants had made mortgage applications to building societies and other lenders which contained false statements. The sums obtained by the appellants by way of mortgage advances were actually paid to them by means of telegraphic or electronic funds transfer or by cheque.
Disciplinary Action
Authors: Gray Joanna
Published: January 2008

i) On 12 July 1996, SFA issued Board Notice 345 containing details of its disciplinary action against John Edmund Odell and Branston & Gothard Ltd. SFA commenced disciplinary proceedings against Mr. Odell and B & G Ltd in February 1995. Mr Odell was working for B & G Ltd. from home on a self‐employed half commission basis. He caused B & G Ltd to be in breach of SFA Conduct of Business rules relating to discretionary management of a client's assets including rules on over‐frequent dealing, suitability, periodic reporting.
Comments on the European Commission Green Paper — ‘Financial services: Meeting consumers' expectations’
Authors: Dassesse Marc
Published: January 2008

This paper is a text of the report which the author presented on 6 November 1996, as Reporter for the Financial Services Industry, on the occasion of the hearing organised by the European Commission in respect of the Green Paper.
R v Institute of Chartered Accountants of England and Wales, ex parte X
Authors: Sedley J , Gray Joanna
Published: January 2008

The Applicant in this case, referred to here as X, was a Chartered Accountant and Fellow of the Institute of Chartered Accountants, a body constituted under Royal Charter.
The social dimensions of financial risk
Authors: Shah Atul K.
Published: January 2008

As money has come to play a central role in modern society the risk of losing money, financial risk, is a major concern for individuals and societies. Yet the understanding and analysis of financial risk in modern finance theory is very weak and incomplete. Its definitions are muddled with risk management issues, implying that only manageable risks are relevant for scientific analysis. There is also an explicit bias towards measurable risks, implying that unmeasurable risks are somehow irrelevant. Risk analysis in finance is devoid of an ethical stance, a prerequisite for any reasonable discussion of risk. Beck's ‘Risk Society’ is a powerful critique of modern science and its inability to deal with the significant increase in social and ecological risks created by modern industrial society. This paper uses concepts generated by Beck to unravel the various dimensions of financial risk, many of which have hitherto been ignored in the mainstream finance literature. It reveals the extent to which the analysis and understanding of risk in modern finance theory is partial and incomplete. Suggestions are then made for how the analysis of financial risk could be modified to include a wide range of individual, ethical and societal dimensions.
The regulation of financial conglomerates
Authors: Adams Gareth
Published: January 2008

This paper considers the obstacles to the regulation of financial conglomerates and the events that have shaped thinking at the regulators, in particular in the banking context. In the light of the Barings debacle in particular it identifies some of the issues that such financial institutions raise for financial systems and the authorities, concluding with the challenges faced by national regulators in an increasingly global environment and what needs to be put in place to meet those challenges.
Closing the loopholes in US regulation S for offshore offers and sales of securities
Authors: Platt Dana L. , McKeefry Mark J.
Published: January 2008

The United States Securities and Exchange Commission adopted Regulation S in 1990 to clarify that offshore offers and sales of securities need not comply with the onerous registration requirements of US securities laws. In the short time since Regulation S was adopted, a number of issuers have abused the regulation. Amendments designed to curb these abuses have been recently proposed. This paper addresses the impact of the amendments and identifies significant issues to consider when undertaking a Regulation S transaction.
Duties of unit trust trustees
Authors: Lofthouse Stephen
Published: January 2008

The paper outlines the duties of unit trust trustees in principal/agent terms. It then discusses the reactions of a number of trustees to the suggestion that they might be acting in breach of trust because of poor performance by the funds for which they are trustees. It concludes by offering suggestions for remedial action by unit trust trustees.
Armitage v Nurse & Others
Authors: LJ Hirst , LJ Millett , LJ Hutchison , Gray Joanna
Published: January 2008

The Appellant in this case, referred to throughout the Court of Appeal's judgment as ‘Paula’, was the principal beneficiary under a settlement which contained a trustee exemption clause in the following terms:
A guide to rules on electronic communications in the USA
Authors: Ringo Wesley L.
Published: January 2008

The New York Stock Exchange, Inc. (NYSE) and the National Association of Securities Dealers, Inc. (NASD) have proposed changes to their rules regarding the supervision and review of its member firms' supervision of electronic communications. The rule changes provide brokerage firms with more flexibility by removing the requirement that firms review each and every item of correspondence between brokers and their clients and, instead, require that firms establish reasonable procedures for review of communications with the public. The proposed changes will allow brokerage firms to take advantage of the many benefits and efficiencies offered by electronic mail and Internet communication. The paper offers a practitioner's guide on the latest rulings regarding electronic communications from the Securities and Exchange Commission (SEC), the NASD, the NYSE, the North American Securities Administrators Association and foreign regulators. This outline covers virtually every Release issued on the Internet in the USA and abroad.
Electronic commerce and the Single Market in financial services in Europe: What chances for success?
Authors: Woolfson Philip
Published: January 2008

The Single Market in financial services (investment funds, banking, insurance and investment services) has had a long gestation and has been a mixed success. It is now faced with a new challenge, the adaptation of the Community regulatory framework to an electronic environment. This paper reviews progress in creating a Single Market in financial services, in particular the application of freedoms to provide services and of establishment and the principles of mutual recognition, home country control and the single licence. It also identifies issues in relation to electronic advertising, marketing and provision of financial services on a cross‐border basis. The paper seeks to show that existing and proposed Community legislation provides a framework for future development of this new medium:
Regulating for the future: Securities regulation in an automated environment
Authors: Geyer Kristen N.
Published: January 2008

Over the past two decades, technology has revolutionised the way securities are traded. The high‐speed communications, automated execution and borderless trading made possible by technological advances pose unique challenges for securities regulators. Regulators should look carefully at how their own regulator structure can address these challenges.
NM Financial Management Ltd v Marshall
Authors: LJ Butler‐Sloss , LJ Millet , LJ Thorpe , Gray Joanna
Published: January 2008

Both the facts giving rise to this appeal and the first instance decision are considered in detail in Vol. 4, No. 4 Journal of Financial Regulation and Compliance, p. 397. The Respondent to the appeal, Mr Marshall, had been a self‐employed sales agent engaged by the Appellant company in the selling of life assurance and pension policies. The terms of his engagement were contained in two successive contracts of which the latter provided, inter alia:
Investors Compensation Scheme Ltd v West Bromwich Building Society
Authors: Goff  , Lloyd  , Hoffman  , Hope  , Clyde  , Gray Joanna
Published: January 2008

These are set out in the earlier comment on this case when it arose at first instance and was considered in Vol. 5, No. 1, Journal of Financial Regulation and Compliance, p. 78. The investors concerned in this appeal had suffered losses through investment in Home Income Plans arranged by an independent financial adviser (IFA) and the West Bromwich Building Society (WBBS). The IFA was in default and so the Investors Compensation Scheme (ICS) had paid the investors compensation as a result thereof.
Direct taxation and bank disclosure in the context of the law of the European Union
Authors: Dorn Nicholas , White Simone
Published: January 2008

Without prejudice to the idea that criminal law should be brought to bear upon tax evasion, in this paper the authors focus on the potential of European Community (EC) law in the frame‐work of economic regulation, trade and the fight for employment. Their argument is directed at evasion of all forms of direct tax, including corporation tax, tax on the income of individuals and all other forms of direct taxation.
New opportunities to market investment funds in the USA
Authors: Sorady Marybeth
Published: January 2008

For the sponsor or manager of a non‐US investment fund, the mantle of US laws and regulations surrounding the offering of fund shares to US investors can be mystifying. In an effort to simplify and clarify the legal miasma, the US Congress and Securities and Exchange Commission (SEC) have in the past year taken action to facilitate the offering of interests to more sophisticated investors in both foreign and domestic private investment funds. This paper describes the recent legislation enacted by Congress, rules and interpretations issued by the SEC and its staff to implement and effectuate the legislation and strategies for privately offered investment companies to take advantage of the new, more liberal regulatory scheme.
Malik v BCCI SA; Mahmud v BCCI SA
Authors: Goff  , Mackay  , Mustill  , Nicholls  , Steyn  , Gray Joanna
Published: January 2008

These two appeals arose out of the 1991 collapse of BCCI and were brought by two former employees of BCCI in London who had both lost their jobs as a result of the collapse. Mr Malik had worked for BCCI for 12 years, his last position being head of deposit accounts and customer services at BCCI's Leadenhall branch. Mr Mahmud had 16 years service with the bank and was manager of the Brompton Road branch at the time he lost his job. They claimed that as well as losing their jobs they had suffered damage to their reputations, and thus future employability, as a result of their association with BCCI. In all the courts through which the claims passed the liquidators agreed that the actions should proceed upon the basis of a set of agreed facts (although the liquidators made no admission of the veracity of those facts) namely
Secretary of State for Trade and Industry v Baker & Others
Authors: V‐C Richard Scott , Gray Joanna
Published: January 2008

This case arose from the 1995 collapse of the Barings Banking Group caused by the enormous losses resulting from Nick Lee‐son's unauthorised derivatives trading in Singapore, while general manager of Barings Futures (Singapore) Ltd. The holding company of the Barings Group, Barings plc, and a number of its subsidiaries were placed in administration as soon as the scale of the losses became apparent and in July 1995 the administrators submitted a report to the Secretary of State for Trade and Industry as they were bound to do by s.7(3) of the Company Directors’ Disqualification Act 1986 (CDDA 1986). Section 6 CDDA 1986 provides that it is the duty of the court to disqualify unfit directors of insolvent companies:
Reducing systemic risk in payment and securities settlement systems
Authors: Vereecken Marc
Published: January 2008

The past decade, with its unprecedented surge in financial activity and financial crises, has been one of increased awareness on the part of both regulatory authorities and market participants of the potential of payment systems for propagating and amplifying financial shocks, especially in a cross‐border context. This has led the European Commission to propose, on 30th May 1996, a Directive aimed at reducing systemic risk. (This has been the subject of an earlier contribution by the same author, pub‐lished in Vol 5, No 1 of the Journal.) In the meanwhile, the European Parliament has delivered its opinion and the Council has adopted a common position. This paper examines the contents of this common position.
Financial services regulation and the Internet
Authors: Rowe Heather
Published: January 2008

The great attractions of the Internet are its flexibility and its international reach and, some might say, its anarchic nature. However, a company planning advertising or trading on the Internet must not assume that it is not regulated. This is simply not true. This paper focuses primarily on the regulation affecting advertising and the financial services sector (which is already a heavily regulated area in its own right). Financial services companies should be aware, however, that there is a raft of other relevant legislation, such as data protection (including the trail‐blazing data protection bill published on 14th January 1998) which is required to implement a 1995 EU Data Protection Directive in the United Kingdom.
Joseph Gerald Taylor v Investors Compensation Scheme
Authors: LJ Beldam , LJ Potter , Balcombe J
Published: January 2008

This was an appeal from an earlier decision of the Queens Bench Divisional Court in R v Investors Compensation Scheme ex parte Gerald Taylor (judgment date 29th November, 1996) which has already been considered in this journal (see ‘Timing was crucial for ICS claim’, Vol. 5(2), Journal of Financial Regulation and Compliance 1997 at p. 178).
Banking litigation strategies after Woolf
Authors: Jones‐Parry David , James Simon
Published: January 2008

This paper considers the issues facing banks who become engaged in litigation and the strategies and procedures available to obtain the most effective solutions. How these will be affected by the reforms in civil procedure proposed by Lord Woolf are also discussed.
Choice of law clauses in customer agreements: NASD conduct rule 3110(f)(4)
Authors: Goldsmith Barry R. , Lawson Thomas B.
Published: January 2008

Most account opening agreements used by US brokerage firms contain a standard predispute arbitration clause requiring customers to submit all disputes relating to the account to arbitration conducted according to the rules of a self‐regulatory organisation. Brokerage firms also routinely place a clause in their customer agreements designating the law which will govern the agreement. Under a rule of the National Association of Securities Dealers (NASD or Association) — IM 3110(f)(4) (Rule 3110(f)(4)) — brokerage firms may not place in a customer agreement ‘any condition which … limits the ability of a party to file any claim in arbitration or limits the ability of the arbitrators to make any award’. This rule places important limitations on the way firms utilise choice‐of‐law clauses. In light of recent legal developments, it is increasingly important for firms to be aware of the issues raised by the rule.
Fraud, prosecution and regulation: Achieving effective control
Authors: Clarke Michael J.
Published: January 2008

This paper reviews the issues surrounding jury trials in fraud cases in the context of the Home Office's consultation document in early 1998. It includes an account of the Serious Fraud Office (SFO) and concludes that a greater willingness to use regulatory institutions to deal with misconduct is essential to permitting the SFO, as the leading fraud prosecution agency, to discharge its responsibilities effectively.
Developments in the German equity market and its regulation
Authors: von Rosen Rüdiger
Published: January 2008

The German stock market has developed by leaps and bounds over the past two years. German legislators have, for example, introduced a large number of improvements that have brought the underlying conditions of the German financial markets into line with international standards. Market participants thereby have the potential — above all through the introduction of a single European currency — to actively avail themselves of the resulting opportunities. The future will see progressive globalisation and increasing international competition on the financial markets and the markets for goods and services. There will also be a greater need for pension plans funded through the capital markets. These developments will further promote the utilisation of shares as a financing and investment instrument in Continental Europe and, especially, in Germany. Introduction of the Euro will considerably reinforce these developments and the integration of markets. The German financial markets are well prepared to meet these challenges. Market participants are taking advantage of the improved underlying legal environment to develop their position among international competitors.
Introduction to the Website review
Authors: Kendrick Martyn
Published: January 2008

This is the first in a series of papers the Journal intends to publish looking at selected websites on the internet that are relevant to financial regulation and compliance.
A prospectus from the FSA: Its approach to regulation
Authors: Llewellyn David T
Published: January 2008

The Bill gives the FSA substantial discretion in the way its powers can be exercised. A key issue for a financial regulator relates to the selection it makes from the range of instruments available and the way they are combined in an overall regulatory strategy so as to achieve objectives effectively and efficiently. The object of this paper is to review a policy document the FSA has issued. This document indicates how the FSA plans to evolve its approach to regulation. One of the particular challenges for the FSA will be to get the balance right between harmonisation and differentiation.
The new financial regulatory regime and the regulation of insurance
Authors: Boléat Mark
Published: January 2008

This paper examines the creation of the Financial Services Authority, concentrating on the implications for the insurance industry and the issues that will be raised in the transition to the new regime. It concludes that a more coordinated approach to regulating financial institutions will have a beneficial effect on the insurance industry, but that there will also be a downside. Much that is good about the present system may be lost, while there will be two to four years of uncertainty as the new rules are made and implemented.
Finanzplatz Deutschland: Modernisation and regulatory reform
Authors: Walter Norbert
Published: January 2008

The modernisation of the German capital market, Finanzplatz Deutschland, is under way. In the course of the 1990s, efficient organisational structures of stock and futures exchanges have been established and various equity market segments introduced. The evolution of financial markets in Germany is encouraging, even though large gaps, such as corporate bonds and mid‐caps, remain. The regulatory framework has been adjusted too. Banking, insurance and securities trading are now fully covered by prudential control and supervision. The mutual fund industry has also been put on a more liberal footing, yet the legal basis for pension funds still needs to be set up. Some centralisation and streamlining of supervisory institutions along British lines may well become appropriate, once the impact of European Monetary Union (EMU) is felt more clearly.
Gearing up for the FSA regime
Authors: Morris Simon
Published: January 2008

This paper considers the steps which an authorised firm should be taking to prepare for the requirements of the FSA. While neither the details of the regulatory regime, nor the new rules themselves, have been published, the FSA's concerns are clear enough. Its focus will be on the achievement of high compliance standards, the creation of a robust control environment and the discharge of managerial responsibility. The paper goes on to consider the operational areas upon which FSA is likely to focus, and its requirements for an effective compliance system.
Automated compliance systems
Authors: Ackerman Fredda E. , Darrell Mounts R. , Thomas David U.
Published: January 2008

In recent years, investment management companies and other financial service entities have placed an increasing emphasis on strengthening their compliance departments and systems. Factors contributing to this heightened emphasis on compliance include the globalisation and growth of the financial services industry; the development of new and more complex financial instruments; increased scrutiny, higher standards, and tougher sanctions from regulators; and several high‐profile failures that resulted, at least in part, from inadequate compliance. To meet the heightened demands placed on compliance personnel, most investment managers have, to a degree utilised advances in technology to ease the burdens and to improve overall compliance. One of the main uses of technology has been to monitor compliance of securities transactions with regulatory and client‐imposed investment requirements and limitations prior to the execution of the transactions (so‐called ‘pre‐trade compliance’). This paper examines automated pre‐trade compliance systems, focusing on the reasons such systems are needed, the types of systems that are available and the benefits and limitations of such systems.
Financial liberalisation, financial crisis and the new regime: The Korean experience
Authors: Cho Yong‐Doo , Kim Dong‐Won
Published: January 2008

The financial restructuring measures under the IMF programme since the financial crisis far exceeded those carried out during the last 10 years in their depth and coverage. Starting from the observation that the financial crisis of late 1991 occurred after the well publicised entry into the OECD, this paper focuses on the relationship between the liberalisation and opening‐up of the financial market and the unprecedented financial crisis in Korea. It deals with issues raised as the Korean financial regulatory system moved from a controlled system to a market oriented system, and it reviews the policy initiatives of financial regulation and liberation in the period between the early 1980s and late 1991. This paper shows the importance of a multi‐staged system of information production and monitoring of the economy in the transformation into a market‐oriented system, suggesting that this transformation can damage the economy if related policies do not enhance the power of financial supervision to monitor the moral hazard behaviour of financial institutions.
Russia: A market yet to emerge
Authors: Chown John
Published: January 2008

Russia is potentially the largest and most intriguing of the emerging markets but will it ever fulfil its promise? There is little point in describing the detailed regulations at this stage; but this paper begins by explaining the back‐ground to the August 1998 collapse. It goes on to examine the prospects for the re‐establishment of a sound currency, and the development of sound banking and financial markets. These will require action on tax, regulation and corporate governance and a combination of the West being willing to help and the Russians to accept such help. The paper ends on a note of guarded optimism.
New Zealand's approach to bank supervision
Authors: Turner John , Oyelere Peter
Published: January 2008

In the aftermath of the banking crisis in South‐East Asia, the International Monetary Fund (IMF) has recommended that the South‐East Asian economies adopt several aspects of the New Zealand approach to bank supervision. The New Zealand approach relies heavily upon market incentives. This paper analyses three key aspects of the New Zealand supervisory regime: the removal of deposit insurance; the public disclosure regime; and the Reserve Bank of New Zealand's supervisory responsibilities. In this paper, we argue that this supervisory regime is built on weak foundations, and therefore, it should not be emulated by other economies.
Bankers Trust Company and Bankers Trust International plc v PT Jakarta International Hotels & Development
Authors: Gray Joanna
Published: January 2008

During the course of 1997 Bankers Trust International plc (BTI) and the defendant company, PT Jakarta International Hotels & Development (JIHD), entered into a series of seven Indonesian rupiah/US dollar cross‐currency swap transactions. The seven transactions were made under the auspices of an International Swaps and Derivatives Association (ISDA) master agreement dated 9th March 1995. That ISDA master agreement was expressed to be governed by English law and contained an arbitration clause which provided (inter alia):
Asian Economic Crisis
Authors: Kendrick Martyn
Published: January 2008

For this review, websites that provide relevant and interesting information on the recent Asian economic crisis have been selected. The amount of information available on the Web continues to expand at an incredible rate. The main problem remains, however, ie trying to identify the quality and accuracy of much of the information provided. In order to provide a comprehensive and balanced source of reference websistes have been chosen from four different types of sources, namely: international organisations; national governments; think tanks; and universities.
Cost‐benefit analysis in financial regulation: How to do it and how it adds value
Authors: Alfon Isaac , Andrews Peter
Published: January 2008

The proposed contents of the planned Financial Services and Markets Act have been revealed in the draft bill (FSMB) that was introduced into Parliament on 17 June, 1999 and in various announcements by the government. On that basis, the Act is expected to require the Financial Services Authority (FSA) to have regard, in discharging its functions, to the economic impacts of the provisions it makes and to publish a cost‐benefit analysis (CBA) of proposed rules and general guidance with respect to the operation of rules. This paper describes the technical and organisational measures that the FSA is taking in order to fulfil the FSMB's requirements for CBA and considers the rationale for those requirements. The paper suggests that the case for undertaking cost‐benefit analysis rests on the dangers of interfering in markets without analysing the likely consequences in a rigorous and theoretically sound manner. The paper also reviews the (so far limited) experience of applying cost‐benefit analysis to financial regulation in the UK and suggests how difficulties in the assessment of the costs and benefits can be addressed, with a consequent increase in the value of financial regulation.
Minimising the cost of FSA supervision
Authors: Turner Roger
Published: January 2008

This paper sets out some of the issues facing a firm in attempting to reduce the costs of compliance and concentrates on the operations performed by a firm's supervision teams and their interaction with the supervisors from the Financial Services Authority (FSA). It concentrates on those areas in which evidence suggests that the greatest opportunities for gain exist or where in fact firms permit the most significant inefficiencies to remain. The developments within compliance have been considerable over the last few years and while standards have risen so have the costs associated with demonstrating compliance with the relevant requirements. Firms must ensure that their supervision departments are operating efficiently and this means a return to basics. The compliance plan is an essential requirement but must be monitored and reviewed in order to ensure that targets are being achieved and resources concentrated upon the higher areas of risk. The greatest potential for additional cost has its origins in the visits undertaken by the inspectors from the FSA. Without careful planning, adequate resourcing and presentation of material it is very easy for the FSA to misconstrue the extent of a particular issue, or misunderstand the context in which the issue exists within the business. The opportunity for minimising additional costs arising from a routine visit from the FSA lies in the hands of the firm but many seemingly miss the warning signs. When things go wrong, firms often feel that they are at the mercy of the FSA. In fact there are a number of steps that a firm can take to either minimise the potential for escalation of an issue and to mitigate the costs even if a transfer to enforcement actually materialises.
Court of Appeal rules on the scope of s.47 of the Financial Services Act 1986
Authors: LJ Evans , LJ Ward , LJ Mummery , Capps David
Published: January 2008

In a 1999 Court of Appeal decision it was held that s.47 of the Financial Services Act 1986 (the Act) did not create a new, wider duty of disclosure than that already existing at common law or in equity.
Mahon and another v Rahn and others
Authors: Gray Joanna
Published: January 2008

The claimants in these proceedings were a Mr Patrick Mahon and Mr Andrew Kent. The Defendants were partners in the Swiss Bank of Rahn & Bodmer. At the time in which the events giving rise to these proceedings occurred they were respectively, managing director and corporate development manager of TC Coombs, a London‐based firm of stockbrokers over which, at that time, the Securities Association (TSA) had regulatory jurisdiction. The Securities Association subsequently merged with the Association of Futures Brokers and Dealers to become the Securities and Futures Authority (SFA). One of TC Coombs' clients, a Mr Johnson, was under investigation by the Serious Fraud Office (SFO) in early 1990. Mr Johnson had been involved in a complex transaction which involved a meeting between him, Mr Kent and Dr Rhan from the Swiss Bank at the bank's offices. Unsuccessful criminal proceedings centred around that transaction were brought against the claimants but the judge in those proceedings ruled that the claimants had no case to answer.
From ‘effects‐based’ regulation to a return to the reasonableness standard?
Authors: Gray Joanna
Published: January 2008

The day‐to‐day stuff of regulatory compliance is far more complex, less mechanistic and literal than it might seem. Principles, rules, guidance, relations with regulators are all crucial as well as the internal management systems adopted by the firm to disseminate standards and procure compliance, and perhaps the most important factor of all is the compliance culture or even subcultures within the regulated firm itself. An unravelling of some of the so‐called ‘regulatory scandals’ that have taken place under the existing regime for the regulation of investment business shows that the problems that have arisen are not as a result of rules themselves being inherently ‘wrong’ in substance (in the sense of the type or level of obligation they impose) but are as a result of the rules not working and not therefore, having their desired effect.
Regulatory and Legal Commentary
Authors: Gray Joanna
Published: January 2008

As readers of this Journal are probably by now immersed in the strategic and practical preparatory work for the full implementation of the Financial Services and Markets Act (N2) next year (which, at the time of writing, is expected to be summer 2001) it is nevertheless worthwhile casting a backward glance over the regulatory reform process that began in May 1997 with the then new Chancellor's Statement to the House of Commons. An important milestone in this reform process was reached three years later on 14th June when Royal Assent was attached to the Financial Services and Markets Bill and converted it into legislation. The Bill has been referred to as the most heavily amended ever with some 2,750 amendments tabled and nearly 1,500 agreed. The Financial Services and Markets Act (the Act) now consists of 433 s. and 22 Schs. but how it reached that final form is a very long story indeed. In parts, that story has been a highly technical one of interest only to the legal, compliance or product design specialist, in parts, the story has been one of the highest level of non‐partisan intellectual sophistication and debate and, in other parts, it has been one of highly charged political debate. This paper will not even attempt to begin to consider all the amendments agreed but instead will single out a few of the more significant areas of the Act that were the subject of some contention and/or amendment in its passage into and through Parliament.
‘An academic ombudsman’
Authors: Farrand Julian
Published: January 2008

The paper focuses on the tensions between the subjective discretionary decision making of an ombudsman and the objective non‐discretionary decision making favoured by judges, especially on appeal or judicial review from an ombudsman. Is ‘justice according to law’, an oxy‐moron? Examples of decisions where the law was deliberately not applied because it was not considered ‘fair and reasonable in all the circumstances’ are taken from the writer's time as Insurance (and later Pensions) Ombudsman. Will the Financial Services Ombudsman Scheme revive a newer equity or will consistency be regarded as something better than justice in the individual case?
Levelling the playing field in international financial markets: The Basel Accord revisited
Authors: Dhumale Rahul
Published: January 2008

The framework for financial services provision in a global context cannot ignore the issue of competition nor even consider it in isolation. Moreover, in the financial sector the level and degree of competition often necessitates balancing an assorted array of issues from arguments for static and dynamic efficiency to minimising rent‐seeking activities through proper supervision. In the end, it is design and implementation of laws and regulations which to a large degree can determine the stability and efficiency of financial markets both on national and international levels. As theoretical and empirical evidence has long indicated, however, there is a trade‐off betweeen assuring safety and soundness of resources. This paper argues that the operation of the financial sector as a whole will not be as effective if market discipline is relied upon to promote fair competition within financial markets as suggested in the 1999 Basel proposals.
Defamation appeal: Court of Appeal rules that qualified privilege applies in respect of letter to regulator Mahon and Another v Rahn and Others
Authors: LJ Brooke , LJ Mantell , LJ Laws
Published: January 2008

The factual background to this appeal was given in Vol.8, No.1 Journal of Financial Regulation and Compliance when the judgment at first instance, from which this appeal by the Defendants was brought, was considered and analysed.
The Cruickshank report on competition in UK banking: Assessment and implications
Authors: Wolgast Michael
Published: January 2008

This paper assesses the Cruickshank report on competition in UK banking from the perspective of a major private sector German bank. The paper starts by describing the UK market for retail banking and then the major conclusions and recommendations of the Cruickshank report. The author expresses considerable doubt on the report's findings of high prices and poor quality of service and offers an alternative explanation for the UK banks' high profitability. The paper concludes by noting a number of important implications which the Cruickshank report has for regulators and banks internationally.