Wednesday, September 30, 2020

Alarm Raised on Stock Loans for "Withholding Tax Schemes”

Findings Point to a New Role for Emerging Fintech

Author: David Schwartz

European commissioners are reviewing a study from their securities and market authority (ESMA) that includes a recommendation for new laws to combat unfair trading practices and an extended remit for National Competent Authorities (NCAs) to conduct snap audits of securities loans and transactors. Loans deemed to be suspicious would prompt an inquiry to determine penalties for unfair strategies and inappropriate beneficiaries. However, useful audit results may be doubtful based on our preliminary review that uncovered shortcomings in the proposed SFTR surveillance datasets, as well as possible flaws in the study’s basic methodology. 

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Wednesday, July 3, 2019

ESMA Takes a Look at Tax Withholding Schemes

Proposes Some Best Practices and Promises a Follow-up Study

Author: David Schwartz

The European Securities and Markets Authority (ESMA) has published the findings of its preliminary study of multiple withholding tax (WHT) reclaim schemes. ESMA conducted this preliminary study at the request European Parliament (EP) and has launched a formal inquiry to gather further evidence from national competent authorities (NCAs) on the supervisory practices and experience regarding those schemes.

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Wednesday, November 22, 2017

Funds enlist Vendors to Hike the Stakes in $50 billion Class Action vs Dealers

First Impressions of amended complaint shows counsel got advice from data vendors.

Author: Ed Blount

A putative class action suit filed in August 2017 alleges that U.S. investment banks and broker-dealer units of global banks conspired to restrain competition in the domestic stock lending markets. (Read our review here.) The fact that a Connecticut hedge fund and Los Angeles County’s pension system have joined the suit is the development that has captured the media headlines. However, the risk to banks’ profits is the real story here.

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Sunday, February 26, 2017

Fintech Poised to Create a New Financial World

IOSCO Report Looks at Intersection of Fintech and Financial Regulation

Author: David Schwartz

“Fintech,” or financial technology," is a term that seems to be on everyone's lips these days, from bankers to global finance ministers.  Dramatic advances in computing power, speed, interoperability, and nearly instantaneous internet communication are changing the ways banks, brokers, and other financial institutions relate to their customers, investors, regulators, and each other. But what do these changes mean to the future of financial markets and regulation?  In February 2017, the International Organization of Securities Commissions (IOSCO) published a document that ambitiously charts the bewildering array of fintech innovations and describes how these innovations are beginning to intersect with securities markets regulation. Based on industry surveys, the report looks at the most important technological innovations affecting global finance and makes some observations about regulatory responses.

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Thursday, April 14, 2016

OCC Seeks to Bring Some Order to Financial Innovation

A Whitepaper on the Elements of "Responsible Innovation"

Author: David Schwartz

Banking and financial markets have always been innovative. But globalization, new regulation, and changes in technology have heightened the pace of innovation dramatically.  According to a whitepaper published in March 2016 by the Office of the Comptroller of the Currency (OCC), while banks continue to innovate, "rapid and dramatic advances in financial technology are beginning to disrupt the way traditional banks do business."  In the face of this disruption, the OCC has used this white paper to enumerate eight "guiding principles" that the agency says it has formulated "to guide the development of its framework for understanding and evaluating innovative products, services, and processes that OCC-regulated banks may offer or perform." 

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