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EMEA: choppy waters
Private equity performance is currently reminiscent to its
performance in 2008, but with greater risk awareness. Huge
leveraged buyouts in 2008 destabilised the global economy but,
in general, private equity firms are using less debt and are
exercising more caution than before. The seller-friendly
conditions mean that companies are in a position to demand cash
up-front in deals, given the huge competition.
The Senior Managers' Regime (SMR) could be extended later
this year and with GDPR due to be implemented soon, senior
managers could see a
big increase in their workload. Some staff are becoming
concerned about taking certain roles because the SMR and some
senior managers are accelerating retirement plans. This could
lead to a talent shortage where experienced workers are
replaced by junior workers and this could be counter-productive
to increasing conduct and compliance in the industry.
Consent of data under GDPR is said to be the most
problematic aspect of the new regulation. Contrary to popular
opinion, consent is not mandatory and there are other,
potentially easier, paths companies can take. Companies cannot
automatically opt-in their data subjects but if they apply
another legal ground, like legitimate interests, then they can
operate in a similar way to before, providing that they
illustrate the purpose for handling the data.
Americas: count the pennies
On Monday 25 March the Securities and Exchange Commission
(SEC) smashed its previous record when it awarded a total of
$83 million to three whistleblowers as part of a settlement
with Bank of America Corp's Merrill Lynch brokerage unit. The
previous record for the largest reward issued by the SEC was
$30 million in 2014.
In the Senate the SEC was given a $1.6 billion budget for the
2018 fiscal year, $50 million more than it requested.
Drafters allowed for extra funding to cover the regulation of
the technology sector. The Commodity Futures Trading
Commission (CFTC) on the other hand was awarded with a budget
of $1 million less. Chairman Giancarlo had requested of a 12%
increase to help fund the regulators new direction and
increasing policing of the virtual asset space.
Massachusetts Securities regulator William Galvin ordered
five planned initial coin offerings (ICOs) to halt their ICO
campaigns this Tuesday following investigations into each of
Chicago based CME Group, who started offering bitcoin
futures last year, announced its intention to acquire
London-based exchange operator NEX for $5.5 billion, a move
that will establish a one-stop shop for US debt.
APAC: rising tensions
Fears of a US-China looming trade war has been causing
global stock markets to sway.
On the US side, the focus has been on Trump's plan to impose
$60 billion worth of tariffs on Chinese imports following the
Section 301 investigation into China's alleged violation of
intellectual property rights. The US is trying to target what
it thinks are China's pain points which are imports in tech
areas such as robotics and semiconductors as these are areas
for growth as demonstrated by the Made in China 2025
China has responded with $3 billion tariffs on 128 US food
and industrial products including fruit and steel pipes.
Whether China will move on products such as cars, soybeans and
aircraft, which are some of the China's biggest imports from
the US, remains to be seen. Beijing has made it clear that it
won't just sit back and will certainly respond if President
Trump decides on more punitive measures. How Trump will use his
negotiation tactics to reduce the US trade deficit with China
is the big question.
The Singapore government is
exploring options to use blockchain and distributed ledger
technology to ensure clearing and settlement in trade
finance, payments, and securities, but also combat money
laundering (AML) and terrorism financing..
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