Global Glimpses

The Global Glimpses blog follows compliance, risk, and corporate governance news both in Europe and around the world. It covers developments at the International Accounting Standards Board, as well as regulations issued by the European Union, Britain, China, India, and other countries in Europe, Asia, and Latin America. Global Glimpses also covers anti-bribery and corruption enforcement around the world as well as other compliance developments abroad. For more information on this blog, click here to e-mail Executive Editor Joseph McCafferty.

Proposed EU Financial Transaction Tax Slammed by Critics

May 22, 2013

As 11 European Commission member states seek to pass a broad Financial Transaction Tax, critics are taking issue with the commission's assumptions on the tax's impact. Two new studies released this week claim the tax will have sweeping ramifications, beyond the financial services sector and beyond the borders of the 11 nations pushing for the tax. Proponents argue the tax is needed to ensure the financial sector—which they say was a cause of the crisis and beneficiary in the form of government support—pays its fair share as the economy rebounds.
 

Parliament One Step Closer to Single EU Banking Supervision System

May 22, 2013

Members of European Parliament this week gave a preliminary okay to creation of a single EU banking supervisor. The European Central Bank would be charged with supervising the Eurozone's roughly 6,000 banks, with the assistance of national supervisors. Final approval of the plan, however, will occur only after detailed accountability and transparency rules are ironed out. The single banking supervision mechanism also would seek to attract non-Eurozone countries to reduce possible fracturing of the market.
 

European Union Directive Takes Aim at Credit Rating Agencies

May 15, 2013

Credit rating agencies face additional scrutiny and restrictions from a directive and regulation approved this week by the European Council. The new rules are intended to reduce investors' over-reliance on external credit ratings, reduce the risk of conflicts of interest, and increase transparency and competition within the industry.
 

Ernst & Young Fraud Survey Shows Europe Not Immune to Bribery, Corruption

May 15, 2013

Ernst & Young's annual fraud survey covering Europe, the Middle East, India, and Africa revealed that bribery and corruption are not just developing-market problems. The survey found that large percentages of European executives believe bribery, unethical practices, and outright fraud are common in their home countries. And some say corporate compliance programs are harming their competitive edge. More inside.
 

Parliament Taking Aim at International Accounting Standards

May 15, 2013

Some members of the European Parliament are calling for an overhaul of International Financial Reporting Standards, which were adopted by the EU in 2005. Critics say the standards have become overly complex and opaque, and failed to raise flags for auditors before the 2008 financial collapse. Others say they have been overly influenced by convergence with U.S. accounting rules.
 

Opening Railways to Greater Competition Promises a Bumpy Ride

May 08, 2013

The European Parliament's transport committee this week tackled the contentious issue of reforming the railway industry and opening it up to greater competition. The Fourth Railway Package proposes among other things the separation of track operators from train operators. Industry officials are pushing alternatives they say will achieve the goals of enhancing competition and service without crippling the industry.
 

European Commission Moves to Push Better Access, Transparency from Banking Sector

May 08, 2013

The European Commission this week released a draft directive that would require financial services providers to make basic payment accounts more accessible to consumers across EU member states. The directive also seeks to provide greater transparency in terms of fees, including a standardization of financial terms used, and to implement a free and fast process for consumers to switch providers. Another goal is to ensure all EU consumers who want a basic payment account can get one, regardless of where they live or their financial situation.
 

IASB Considers New Guidance for Rate Regulated Industries

May 01, 2013

The International Accounting Standards Board (IASB) this week took a step forward on examining possible guidelines on rate regulation for industries in which an entity has excessive market power, due to a monopoly or dominant market position. IASB is looking at what information about the consequences of rate regulation would be helpful to users of financial statements.
 

Lloyds Taps Elderfield to Oversee All of Compliance & Risk

May 01, 2013

London-based Lloyds Banking Group this week announced that current deputy governor of the Central Bank of Ireland, Matthew Elderfield, will join the firm in October as group director of conduct and compliance. In his new post, Elderfield will oversee all compliance and conduct risk activities and will develop the group's conduct strategy.
 

European Parliament Approves Banking Reforms, Curbs Bonuses

April 24, 2013

The European Parliament voted last week voted to approve new reforms intended to improve the resiliency of financial institutions by requiring greater, higher-quality capital reserves and discouraging risk-taking by limiting banker bonuses. Banks will be required to hold capital reserves equal to at least 8 percent of their risk-weighted assets, with at least 4.5 percent in high-quality assets. The directive also limits bonuses to no more than a banker's salary unless approved by shareholders. More inside.
 

European Commission Moves Ahead on Tax Avoidance Crackdown

April 24, 2013

As part of an effort to cut down on tax evasion, the European Commission has set up a new initiative, the "Platform for Tax Good Governance." The committee will monitor member states' progress in tackling aggressive tax planning and clamping down on tax havens, in line with the recommendations presented by the Commission last year. The goal of the platform is to ensure that real and effective action is taken by member states to address tax avoidance problems within a coordinated EU framework, the Commission stated.
 

EU Commissioner Slams U.S. Requirements for Foreign Banks

April 24, 2013

A harshly worded letter to Ben Bernanke, chairman of the Federal Reserve, from European Union Commissioner Michel Barnier became public this week, fueling tensions among international financial regulators. In the letter, he attacks new capital standards the United States wants to impose on foreign banks doing business within its borders.
 

DataMotion Releases Next-Generation SecureMail Gateway

December 14, 2012

DataMotion, a cloud-based secure data delivery provider, has announced the next generation of its SecureMail Gateway, an intelligent monitoring solution that uses policy-based encryption and Exact Matching functionality to prevent data leakage and protect sensitive information housed in e-mail messages and file attachments.
 

Tax Fears Forces Companies to Look Abroad

July 25, 2011

A quarter of large UK businesses are thinking of moving some or all of their operations overseas, with the majority of them saying increased tax costs are their reason for wanting to go.
 

Recruitment Code Aims to Get More Women on Boards

July 25, 2011

In an effort to increase the number of women in senior corporate jobs, a group of London-based executive search firms has launched a new voluntary code of recruitment conduct that it wants companies to follow.
 

Britain Warns Europe Not to Ditch Governance Principle

July 22, 2011

Britain's corporate regulator has warned the European Commission not to undermine the "comply or explain" principle as it develops a new cross-Europe approach to corporate governance.
 

British Regulator Issues Record Corruption Fine

July 22, 2011

Britain's Financial Services Authority has slapped a record £7 million ($11.4 million) fine on one of the country's biggest insurance brokers for failing to have good internal controls to prevent corruption. The regulator said Willis Limited had not done enough to monitor payments to third parties that helped the broker win contracts in Russia and Egypt.
 

FSA Hitting Firms With Smaller Fines, On Average

July 16, 2011

The UK Financial Services Authority has hardened its enforcement strategy over the last two years, but when a few record cases are set aside the average fine imposed by the regulator against firms has actually fallen, according to a new analysis.
 

UK Shareholders Have Ridiculous Priorities, says Proxy Agency

July 15, 2011

UK company shareholders are applying a "ridiculous" set of priorities when voting on board proposals, according to an analysis by proxy agency PIRC.
 

Courts Reject Claim that Bribery Raids Were Unlawful

July 14, 2011

The UK Serious Fraud Office can restart its bribery investigation into Alstom after the courts refused a legal challenge from two of the engineering company's directors.
 

Britain's Corporate Watchdog Rethinks Confusing Role

July 08, 2011

Britain's Financial Reporting Council is planning a major overhaul of the way it works, after conceding that its activities are often "impenetrable" to outsiders. The regulator, which enforces financial reporting laws, sets accounting and governance rules, and oversees audit firms, said it would streamline its structure.
 

Fraud Chief Warns Foreign Companies as Bribery Act Goes Live

July 01, 2011

Britain's tough new anti-bribery legislation finally took effect today, and was greeted with a warning from the head of the Serious Fraud Office that foreign companies would be in his firing line.
 

British Government Blasts Audit Profession for Lack of Reform

June 21, 2011

A U.K. parliamentary committee published a report criticizing the British audit profession and accusing firms and regulators of contributing to the financial crisis. The report calls on authorities to end the Big 4's dominance of the audit market and seeks legislation that would encourage talks between bank auditors and financial regulators.
 

KPMG Warns On Pension Rule Changes

June 21, 2011

The new international standard on pension accounting finalized last week includes subtle changes that could have ramifications beyond financial accounting, KPMG have warned.
 

London Improves Insider Dealing Record

June 14, 2011

Insider trading is on the decline in Britain, according to data released by market regulator Financial Services Authority. The level of suspicious share price movements ahead of takeover announcements last year—21 percent—was the lowest since 2003, and dropped from 31 percent in 2009.
 

British Fraud Agency Reprieved, For Now

June 10, 2011

The British government has dropped its controversial plan to scrap the Serious Fraud Office, which investigates and prosecutes financial crime, at least for now. The original plan was to split its responsibilities between the newly created National Crime Agency and the Economic Crime Agency. That plan is now on hold until those agencies are fully operational.
 

Survey Highlights 'Spreadsheet Risk'

June 06, 2011

According to a new survey, over half of the U.K. corporate spreadsheet user respondents have never received any formal training in the software they use and nearly three-quarters say no internal department checks the accuracy of their spreadsheets. The report's author says companies are putting undue trust in the integrity of analysis captured in spreadsheets.
 

Compromised Remuneration Committees Boosting Exec Pay

May 31, 2011

Average chief executive pay at UK-listed companies increased by a third last year and has quadrupled over the last 12 years, despite flat share prices, according to research from proxy agency Manifest.
 

Fight Against Corruption Losing Momentum

May 27, 2011

International efforts to tackle bribery and corruption are losing momentum, according to Transparency International (TI), an anti-corruption group
 

Australia Should Hold Fire on Exec Pay Laws

May 26, 2011

The Australian government should not introduce new laws on executive pay levels or disclosure, and should think about scrapping some of the complex regulations that exist already, according to a report from its legal advisor.
 

Doubts Over Europe's Tax Plan

May 23, 2011

The European Union is struggling to gain support for its controversial plan to create a uniform system of calculating corporate rates in its 27 member states. Some members fear the plan, known as the Common Consolidated Corporate Tax Base, would undermine their national sovereignty. The British government and six other states said they will not back the plan.
 

British Anti-trust Regulator Decides Audit Market Needs Fixing

May 17, 2011

The Big Four accounting firms dominate the British audit market in a way that restricts, distorts or prevents competition, the country's anti-trust regulator has decided.
 

Australia and New Zealand Finish Accounts Convergence

May 16, 2011

Australia and New Zealand have adopted new financial reporting standards that complete a project to converge the two countries' accounting regimes.
 

IASB Shines Light on Hidden Liabilities

May 13, 2011

The International Accounting Standards Board has issued three new standards aimed at bringing off-balance sheet activities into the open. Included in the changes is a controversial ruling to abolish proportionate consolidation, one of the methods that companies outside the United States have used to account for joint ventures. Equity accounting will now be mandatory. More details inside.
 

Fund Managers Need Better Ethical Disclosure

May 12, 2011

European fund managers should do more to disclose how they operate any investment funds that they market as "ethical", according to an industry association.
 

New Guidance on Risk Appetite

May 04, 2011

The London-based Institute of Risk Management has released draft guidance aimed at helping organizations to quantify and communicate how willing they are to take risks. The guidance explains how an organization can determine its risk appetite and what role its board of directors should play in the process.
 

Accountants Get Help to Predict Future

May 03, 2011

The International Federation of Accountants has published draft guidance aimed at helping organizations to make better use of forward-looking business analytics.
 

Criminals Only Winners From British Fraud Plan

April 28, 2011

The U.K. government is coming under further pressure to abandon controversial plans to scrap the Serious Fraud Office, the agency responsible for prosecuting high-profile financial crimes.
 

Compliance Tops Global List of IT Worries

April 21, 2011

Regulatory compliance will be the number one information technology (IT) issue affecting big companies over the next 12-18 months, according to a new survey. Concerns about IT governance come a close second.
 

U.S. Execs Lack Bribery Act Knowledge

April 21, 2011

As the July 1 deadline for Britain to begin enforcing its tough new anti-bribery law approaches, many executives in the United States are unprepared. Three-quarters of U.S. business professionals surveyed said they were not familiar with provisions of the Bribery Act, according to research from Deloitte.
 

Australian Regulator Wants Clearer Prospectus Disclosures

April 15, 2011

Australia's securities regulator has proposed new rules to make corporate prospectuses easier to understand and to improve the risk information they provide.
 

France Cracks Down on Proxy Firms

April 08, 2011

France has taken further action to control the growing influence of proxy advisory firms. The country's financial regulator told firms to disclose more information about how they operate and said similar rules should be introduced at a European level.
 

Britain Tries to Cut Reporting 'Clutter'

April 08, 2011

Britain's Accounting Standards Board has issued a report subtitled "Combating Clutter in Annual Reports" that it hopes will give companies some practical guidance on reducing and simplifying disclosures. The report said that clutter was "making it harder for users to find the salient points about the performance of the business."
 

Europe Sets Course for Tougher Governance Compliance

April 07, 2011

The European Commission will adopt a much tougher approach to corporate governance if it goes ahead with ideas floated in a new policy paper.
 

Big 4 Accused of Dereliction of Duty

April 04, 2011

A British parliamentary investigation report says that "complacency" and "dereliction of duty" on the part of the Big 4 audit firms contributed to the financial crisis. It also says that a "breakdown of dialogue" between bank auditors and regulators made the crisis worse and recommended further investigation into Big 4 dominance of the market.
 

Europe's National Regulators to Lose Influence

March 25, 2011

As new European Union supervisory bodies get up and running, financial regulators at individual European nations will find their powers curtailed, warns Hector Sants, head of Britain's Financial Services Authority. Three new E.U. financial overseers opened at the start of the year, including the European Securities and Markets Authority.
 

Britain Promises to Ease Narrative Reporting Rules

March 23, 2011

The U.K. government has promised to "materially simplify" the country's narrative disclosure requirements in an effort to cut the cost of complying with its financial reporting rules.
 

U.K. to Make Bribery Law Easier for Foreign Companies

March 21, 2011

According to recent press leaks, British authorities will make it easier for non-U.K. companies to comply with the Bribery Act. Reports say foreign companies won't fall under the scope of the Act simply because they are listed on the London Stock Exchange. They must also conduct business in the United Kingdom. More details inside.
 

Europe Needs Tougher Related-Party Rules

March 15, 2011

The European Corporate Governance Forum is calling on the European Commission to introduce new rules for related-party transactions. The ECGF wants tougher guidelines on the size of transactions that should be disclosed and new rules on when directors should seek shareholder approval for a proposed deal.
 

Calls for More Auditor Skepticism Will Push Up Fees

March 11, 2011

Businesses in Britain are warning that regulators' efforts there to make auditing firms more skeptical of clients' statements will drive up the cost of compliance unnecessarily. The Financial Reporting Council has proposed that auditors employ "presumptive doubt," an idea Corporate Britain doesn't like at all.
 
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