Before he left office on 20 October 2014 and the new president was sworn in by the People Consultative Assembly, the former President of Indonesia, Susilo Bambang Yudoyono, signed several new laws and Government Regulations. One of the laws that he signed in was Law No. 40/2014 regarding Insurance (‘Law 40/2014’ or the ‘Law’). Law 40/2014 replaces the old insurance law namely Law No. 2/1992 (the ‘Old Law’).
For almost the last two decades since the last financial crisis hit Asia’s emerging market countries in the late nineties, the Indonesian banking industry has been flooded with foreign investors entering into its financial industry, the like of which has never seen before. Foreign banks and others investors grabbed the country’s banking industries, which were left paralysed during the crisis, and pumped the money to the undercapitalised banking sectors and eventually controlled the industry in such a way that the public finally complained that this ‘important’ and profitable sector of the economy had been controlled by foreign investors.
The Financial Services and Markets Act 2000 (FSMA) gives the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) certain powers and responsibilities over individuals that carry on particular roles within the UK financial services industry. These roles are known as ‘controlled functions’ and the individuals performing them are described as ‘approved persons’. An approved person must obtain regulatory approval before performing a controlled function.
In the 1990s a substantial focus in the then nascent regulation of Russian financial markets had been on self-regulatory organisations (SROs). Potentially that was because SROs were seen to be a key part of the regulation of financial markets in the US, and US regulation was seen as being robust enough to accommodate the requirements of voucher privatisation. Later on, for instance, when deposit insurance was discussed, SROs no longer seemed attractive, and indeed deposit insurance was being implemented by a state body, the DIS. However, a general law for SROs was adopted in 2007 (the ‘General Law’) and as of January 2015 there are 1,191 registered SROs in Russia, 767 of which are established in sectors where SRO membership is obligatory. The largest number of SROs operate in the building sector (almost 500). Furthermore, there are numerous SRO in such areas as auditing, energy inspections, the housing and utility sectors.
This article examines the developments that have taken place over recent years in the area of supervision in the clearing field of the financial markets. Specifically, it focuses on Regulation EU No 648/2012 (EMIR) on OTC derivatives, central counterparties and trade repositories, the so-called ‘European Markets Infrastructure Regulation’ (EMIR), which establishes the new model of European supervision in the sector of the central counterparties (CCPs), ie the entities responsible for clearing in the financial area.
Introduction - Patrick Jake O’Rourke is a leading American political satirist, journalist and writer who has authored numerous books and is currently the H.L. Mencken Research Fellow with the Cato Institute. Known as a regular correspondent for national media and author of the ‘Parliament of Whores’ (1991), O’Rourke is also considered to be the author of the quote ‘Regulation creates a moral hazard’. Although one can argue the quote may be of satirical nature, it is worth analysing it in more details in the context of financial regulation.
A review of 2014 and a look forward to 2015 - This time last year, Emma Radmore of Dentons looked at 10 key legislative and regulatory changes that will affect participants in the UK financial markets in 2014. The year 2014 has been to some extent a period of retrenchment, although many changes are still to come. This year, Emma looks at how the 2014 changes have taken effect, and looks forward to the key regulatory priorities and changes for 2015.
The Indonesian Parliament (Dewan Perwakilan Rakyat) passed a bill regarding the country’s flag, language, national emblem, and anthem in 2009. It became Law No. 24 of 2009 on The Flag, the Language, the National Emblem, and the National Anthem (the ‘Law’ or ‘Law No. 24/2009’).
What is MiFID II? - When the original Markets in Financial Instruments Directive (MIFID) came into effect on 1 November 2007, policy makers were already planning to review this flagship European financial markets legislation. Fast forward nearly six and a half years and work on MiFID II is entering its final strait. In the intervening years, the financial crisis has given rise to extensive regulatory changes across the globe. MiFID II goes beyond the review foreseen in the original MiFID to address many of the significant weaknesses in firms’ and financial markets’ operations identified during the crisis.
At the Pittsburgh Summit of the G20 in 2009 there was agreement that the Financial Stability Board (FSB) should propose measures addressing the risks associated with the operations and insolvency of systemically important financial institutions (SIFIs). Amongst such institutions special attention was directed at systemically important banks (SIBs) owing to the damage which the failure of such banks can inflict on economies, and to the implicit subsidy which is entailed by the likelihood that in the event of insolvency or the threat of insolvency governments will have no option but to provide public funds to control such damage and the subsequent financial instability.
It is common to blame securitisation for being one of the major causes of the 2007–2008 financial crisis, because pooling and repackaging the assets of the originators made it possible to conceal the real assets behind the security issued by SPVs. Despite its bad name, securitisation could be an important tool for the economy. The Bank of England and the European Central Bank published a joint discussion paper on securitisation, which ‘explains how a well-functioning securitisation market can deliver a variety of benefits to issuers and investors, whilst also supporting the provision of credit through indirect channels’. In October 2014, the European Commission adopted delegated acts under the Solvency II Directive and the Capital Requirements Regulation in order to help promote high quality securitisation. Furthermore, the European Banking Authority published a Discussion Paper on simple standard and transparent securitisations.
In November 2014, FCA published the results of two thematic reviews into how firms manage their financial crime risks, together with proposed guidance on financial crime systems and controls. The clear message from the papers, and the press release that accompanied them, is that FCA is losing patience. It found many practices that continue to show significant weakness, and accused firms of not using common sense or getting the basics right. In this article, Emma Radmore of Dentons looks at the reviews and guidance, and what firms should do to get financial crime prevention compliance right.
To what extent should a more constructive approach be taken to bribery and corruption in the UK financial services industry: tackling bribery in the banks
The financial services sector is just as susceptible to bribery and corruption as any other, however it is questionable whether the UK’s legal and regulatory framework effectively addresses the manner in which bribery can take place in a financial sector context. This article considers the regulatory and legal approach to combatting bribery within financial services in the UK, focussing on corporate and investment banks as case studies. In critically assessing the approach of the UK authorities towards policing bribery within the financial services sector, this article questions whether the approach is robust and posits that there is a mismatch of resources and strategy which undermines the efforts to curtail bribery risks in the UK financial services sector. The fundamental question asked is whether the current enforcement strategy between the FCA and SFO ultimately places the right lens before the wrong discerning eye and whether, as a result of this mismatch, the robustness of anti-bribery enforcement within financial services is severely weakened.
Delisting is the process of withdrawing the admission to trading securities from a stock exchange. It complicates, especially for minority shareholders, the offering and selling of their shares. This article explores how the German legislator and courts have addressed this problem so far and identifies potential problems in 2015.
The German banking landscape has changed dramatically with the introduction of Directive 2014/59/EU, which establishes a framework to prevent the failure of financial institutions and mitigate any adverse impacts for the financial market resulting from such failure.
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