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efta court holds iceland was not required to ensure protection of depositors January 28, 2013

Posted by Bradley in : financial regulation, harmonization , add a comment

One might ask what is the point of harmonization of deposit protection at a minimum level to facilitate cross border banking if a bank’s home state doesn’t have to regulate banks properly to limit stresses on the deposit insurance system or really do anything to ensure that the deposit protection will in fact be available in the event of bank failure. But this is what the EFTA court has held in EFTA Surveillance Authority v Iceland:

the Court holds that the Directive does not envisage that the defendant itself must ensure payments to depositors in the Icesave branches in the Netherlands and the United Kingdom, in accordance with Articles 7 and 10 of the Directive, in a systemic crisis of the magnitude experienced in Iceland.

For the future the impact of the decision is limited by the fact that the rules relating to deposit guarantees have changed since the crisis.

uk defined benefit pensions consultation January 25, 2013

Posted by Bradley in : consultation , add a comment

Concerned about the problems faced by employers with defined benefit pensions schemes which find they are required to make additional contributions to support their promises the UK government is asking for views about adjusting the requirements. The consultation document states (having noted that such pensions give their members “a much valued layer of financial security in later life”)

Some commentators have stated that rising deficits are forcing some employers to make substantial additional contributions to schemes, which is diverting funds away from business investment and ultimately, economic growth.

With respect to the relevant stakeholders, the document states:

Given the technical nature of pension valuations and the potential impacts of smoothing, feedback would be particularly welcome from trustees, sponsoring employers, actuaries and other pensions professionals. Members of the general public are also welcome to respond.

But given that what is going on here is deciding how much less secure the “defined” aspect of defined benefit pension schemes will be allowed to be in order to “promote economic growth,” this isn’t really a technical consultation at all. Elite decision-makers like to present financial consultations in this way to control outcomes. But what about basic fairness? Figuring out an appropriate balance between supporting the entitlement to a defined benefit and allowing businesses to operate without being damaged by pensions involves technical issues, for sure, but it also involves a more fundamental weighing of the different interests involved.

gao on agency rule-making January 23, 2013

Posted by Bradley in : consultation , add a comment

In a report on federal rulemaking, Agencies Could Take Additional Steps to Respond to Public Comments, the GAO writes:

agencies requested comments on 77 of the 123 major rules issued without an NPRM in GAO’s sample. The agencies did not issue a follow-up rule or respond to comments on 26 of these 77 rules. This is a missed opportunity, because GAO found that when agencies did respond to public comments they often made changes to improve the rules. In addition, each of these 26 rules is economically significant and some of these rules have an impact of a billion dollars a year or more. These rules also cover important issues ranging from national health care policies to manufacturing incentive programs. For example, in one of the 26 rules, an agency defined a pre-existing condition to implement the Patient Protection and Affordable Care Act and sought public comment. The agency received 4,627 comments, but has not published a response to them. When agencies do not respond to comments requested, the public does not know whether the agency considered their comments, or if it intends to change the rule. As the courts have recognized, the opportunity to comment is meaningless unless the agency responds to significant points raised by the public.

never-closer union? January 23, 2013

Posted by Bradley in : eu , add a comment

Finally, that speech. From a man who heads up a government without a real electoral mandate, supported by MPs from another party who have ignored their own campaign promises, a vow to re-negotiate the UK’s relationship with the EU and ask UK voters what they think:

At some stage in the next few years the EU will need to agree on Treaty change to make the changes needed for the long term future of the Euro and to entrench the diverse, competitive, democratically accountable Europe that we seek.
I believe the best way to do this will be in a new Treaty so I add my voice to those who are already calling for this.
My strong preference is to enact these changes for the entire EU, not just for Britain.
But if there is no appetite for a new Treaty for us all then of course Britain should be ready to address the changes we need in a negotiation with our European partners.
The next Conservative Manifesto in 2015 will ask for a mandate from the British people for a Conservative Government to negotiate a new settlement with our European partners in the next Parliament.
It will be a relationship with the Single Market at its heart.
And when we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice. To stay in the EU on these new terms; or come out altogether.
It will be an in-out referendum.
Legislation will be drafted before the next election. And if a Conservative Government is elected we will introduce the enabling legislation immediately and pass it by the end of that year. And we will complete this negotiation and hold this referendum within the first half of the next parliament.
It is time for the British people to have their say. It is time to settle this European question in British politics.

There’s a lot in the speech about the problems of having rules set in Brussels (as if the UK didn’t agree to the EU’s procedures for adopting new rules and didn’t participate in those procedures) and an invocation of the idea that “national parliaments ….are, and will remain, the true source of real democratic legitimacy and accountability in the EU.” Lots of tub-thumping rhetoric here without a secure basis in reality. And perhaps much more damaging to the UK in Europe than the handbag.

sec transparency: advisory committee on small and emerging companies January 17, 2013

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The SEC has published draft recommendations from the advisory committee on small and emerging companies to be considered at a meeting on February 1. As with the investor advisory committee’s meeting tomorrow public comment is invited. But in this case the public can actually see in advance what the committee plans to discuss at the meeting. Some of the recommendations (addressed to Congress, rather than to the SEC) relate to conflict minerals:

Congress should not use the federal securities laws and the Commission’s disclosure requirements as a vehicle to further humanitarian, social or foreign policy objectives.

Meanwhile, this week the Derivatives Project took the opportunity to reiterate its September 2012 submission to the investor advisory committee (so far the only public statement posted since the announcement of tomorrow’s meeting).

efsa allows more transparency with respect to risk assessments January 14, 2013

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EFSA, the European Food Safety Authority, has announced a major initiative to increase transparency with respect to risk assessment, making available on its website data on genetically modified (GM) maize NK603:

The project is part of EFSA’s continuing commitment to openness and addresses recommendations made by an independent evaluation report of the Authority’s performance to further enhance transparency in its decision-making processes. EFSA’s Science Strategy also highlights the importance of the Authority playing a leading role in making relevant scientific data more accessible to all interested parties.

more on the sec investor advisory committee January 11, 2013

Posted by Bradley in : consumers, financial regulation , add a comment

The SEC published a Sunshine Act notice about the meeting on January 18th because a quorum of the SEC may attend the meeting. Meanwhile, I notice that there seems to be no mention of the Investor Advisory Committee on the SEC’s “website dedicated to retail investors” at investor.gov.

sec investor advisory committee doesn’t really want the public to interfere with its work January 10, 2013

Posted by Bradley in : consultation , add a comment

The Securities and Exchange Commission Investor Advisory Committee will hold a public meeting on Friday, January 18, 2013, in Multi-Purpose Room LL-006 at the Commission’s headquarters, 100 F Street, NE, Washington, DC 20549. The notice of the meeting invites “the public” to submit written statements and says:

The agenda for the meeting includes: introductory remarks from Chairman Walter and Commissioners; introductory remarks from Committee officers; discussion of administrative matters; and reports from the four Investor Advisory Committee subcommittees (the Investor as Owner subcommittee, the Investor as Purchaser subcommittee, the Investor Education subcommittee, and the Market Structure subcommittee).

The notice doesn’t give any hint of the content of the reports. The minutes of the committee’s June 2012 meeting, which are available on the SEC’s website don’t give any hints of the substance of the committee’s work. There don’t appear to be minutes of the meetings in September and October (or at least not on the SEC’s website) although it would be possible to wade through the webcasts and audio archive of the committee’s meetings. The committee did consider recommendations on the JOBS Act at its telephonic meeting on October 12th (after the October 5th deadline for comments on the SEC’s proposal (a number of other comments were in fact submitted after this deadline)). The committee’s JOBS Act recommendations and its procedures are criticised by Keith Paul Bishop here. The notice of the October meeting (dated October 9th (!)) invited public statements and said:

The agenda for the meeting includes discussion of and voting on a recommendation from the Investor as Purchaser subcommittee regarding the Jumpstart Our Business Startups Act (JOBS Act) requirements on general solicitation and general advertising in Rule 506 private placements.

But there seems to have been no advance notice of what the committee was thinking of doing, so no real possibility for public comment. The website shows that one public statement,from Keith Paul Bishop, was submitted in response to the notice of the October meeting. He objected to the lack of timely notice:

I strongly urge the Committee to reform its procedures to: (i) ensure that adequate advance notice is given to the public of all meetings (ii) make subcommittee recommendations available to the public sufficiently in advance of Committee meetings so that there is a meaningful opportunity for public comment and (iii) require disclosure of circumstances in which Committee members have potential or actual conflicts of interest or lack independence.

Another statement filed after the meeting contained similar objections:

It is very unclear what each of the Subcommittees is working on and whether there will be an opportunity for public input before individual recommendations are finalized. Except for a list of topics that was described in each of the Subcommittee reports at the September 28 meeting, the investing public is in the dark about what is going on in these Subcommittee discussions.

The committee does not seem to have paid much attention to these comments. The notice period for next week’s meeting is slightly longer than that for the October meeting, but there is still no information about what is to be discussed. And the notice of meeting is not mentioned in the latest news (or press releases) section of the SEC website, but on the what’s new page for January 9th. So, short notice, no information about what the committee proposes to discuss and no real attempt to let the “public” know that the meeting is even happening.

uk consultation policy : a critique January 10, 2013

Posted by Bradley in : consultation , add a comment

The House of Lords’ Secondary Legislation Scrutiny Committee has published a rather critical report on the Government’s new approach to consultation (the written evidence is also published as well as a transcript of a committee session with Oliver Letwin). There’s lots of useful information in the report about the various groups which would like to and do participate in consultations and the difficulties they face in engaging with their members within the time frames set for consultations. For example, the “National Farmers’ Union (NFU) complained about consultations issued during the summer harvest period.” The Government announced a move away from a standard 12 week period for domestic consultations (which in any case was not a hard and fast period) while arguing for 12 weeks for EU consultations. It’s pretty striking to me that some of the more critical reactions seem to have come from business groups. For example:

The British Chambers of Commerce (BCC) said that the Department for Business (BIS) had launched a three-week consultation process about the implementation of the new employee-owner status, followed by an overlapping consultation on implementation of Nuttall Review recommendations, “which allowed 13 working days for stakeholders to consult their members and experts, conduct research, formulate their responses and achieve sign-off.”

Many of those who provided evidence to the Committee argued that there was insufficient transparency about consultations and that they were not well co-ordinated within and among government departments. The Committee recommends a website which would provide information about all open consultations. This could find a home on gov.uk (I don’t find this to be an attractive or as yet useful website but it is where they seem to be trying to centralise information about government in the UK). In addition, the Committee calls for an independent review to begin this month with findings to be published by Easter 2013 (end of March).

Update: the idea of a website which would list all open consultations is credited in the Committee’s report to Wendy Bradley (no relation) who writes an interesting blog at tintax.com. Here is a link to her post on the consultation consultation.

uk parliament discussing uk opt-out re crime January 9, 2013

Posted by Bradley in : eu , add a comment

Martin Howe QC is discussing EU law today with two House of Lords EU sub-committees (video is here). Some of his examples of EU over-reaching are ridiculously aged. For example, he cited Defrenne v Sabena, a 1976 decision of the Court of Justice. Surely the time for protesting that decision is long past? The written evidence (much of which apparently addresses the benefits of UK involvement in EU policing and crime policy) is to be available tomorrow.