Financial Regulation Roundup: March 23, 2018

Ben Shapiro  Follow

Here are the top stories on the financial regulatory landscape in the U.S., EU and around the world over the past two weeks.

U.S. News:

  • Trump Blocks Broadcom Takeover of Qualcomm on Security Risks: President Donald Trump issued an executive order Monday blocking Broadcom Ltd. from pursuing its hostile takeover of Qualcomm Inc., scuttling a $117 billion deal that had been scrutinized by a secretive panel over the tie-up’s threat to U.S. national security. Trump acted on a recommendation by the Committee on Foreign Investment in the U.S., which reviews acquisitions of American firms by foreign investors. (Bloomberg: read more)
  • Fed Lifts Rates, Signals Tougher Stance as Economy Strengthens:The U.S. Federal Reserve raised interest rates on Wednesday and forecast at least two more hikes for 2018, highlighting its growing confidence that tax cuts and government spending will boost the economy and inflation and spur more aggressive future tightening. In its first policy meeting under new Fed chief Jerome Powell, the U.S. central bank indicated that inflation should finally move higher after years below its 2 percent target and that the economy had recently gained momentum. (Reuters: read more)
  • Volcker Rule Change Backed in House Panel’s Dodd-Frank Remedy: U.S. House lawmakers have advanced legislation that could either expand or upend Congress’s best hope of rolling back banking-industry regulations since the financial crisis. The proposals approved by the Financial Services Committee on Wednesday include a Volcker Rule tweak that would put the Federal Reserve solely in charge of enforcing the Dodd-Frank Act ban on proprietary trading instead of the five agencies now assigned to the task. (Bloomberg: read more)
  • A Controversial practice tearing Wall Street apart is about to be put to the test: The Securities and Exchange Commission agreed to move forward a pilot program that would examine a controversial Wall Street practice. The agency on Wednesday approved the so-called access fee pilot program, which aims to address criticisms of the maker taker stock trading model. Some stock exchanges charge a small fee for matching buyers and sellers and then compensate market makers and other trading firms for executing stock orders on their venues. Stock market participants have been arguing over the system for more than a decade. (Business Insider: read more)
  • Fiduciary-Rule Fight Drags on for Financial Firms: The fight over a fiduciary rule for the financial-services industry is far from over. Late Thursday, the Fifth Circuit Court ruled in a two-to-one decision that the Labor Department overreached by requiring brokers and others handling investors’ retirement savings to act in their clients’ best interest. The court, which covers Texas, Louisiana and Mississippi, found fault with the government’s broadening standard of what is considered financial advice, who provides it and that the Labor Department would regulate it. Another circuit court decision has taken an opposite tack, though, meaning the continuing fight over the rule could be headed to the Supreme Court. (The Wall Street Journal: read more)

EU News:

  • EU approves guidelines for Brexit negotiations: The EU’s formal adoption of the guidelines is a key step as the Brexit process gathers momentum and clears the way for the next phase of the withdrawal negotiations. The guidelines give chief EU negotiator Michel Barnier the mandate to talk directly to the UK about the future relationship with a view to reaching an agreement by October. (BBC: read more)
  • FCA eyes enforcement shake-up: The Financial Conduct Authority (FCA) is set to review its enforcement and supervision procedures in an effort to better reflect its mission statement and achieve its goals of protecting consumers and market integrity. In two documents explaining the regulator's approach to supervision and enforcement, published on 21 March, the FCA announced it was reviewing both its penalties policy and its enforcement guide, with consultation papers on each to be published later this year and in 2019 respectively. (Professional Adviser: read more)
  • UK government announces 'crypto task force' to guard against dangers of digital currencies: The Government has launched a task force to guard against the risks posed by digital currencies such as bitcoin. The Treasury on Thursday announced that it will collaborate with the Bank of England and the Financial Conduct Authority to form the Cryptoassets Task Force which will aim to put the UK at the forefront of harnessing the potential benefits of the technology. (The Independent: read more)

International:

  • Trump moves to crack down on China trade with $50 billion in tariffs on imported products: President Trump took the first steps toward imposing tariffs on $50 billion in Chinese goods and limiting China’s ability to invest in the U.S. technology industry Thursday, saying the moves were a response to Beijing’s history of forcing U.S. companies to surrender their trade secrets to do business in China. (The Washington Post: read more)
  • Yi Gang Picked To Take Helm of People’s Bank of China: President Xi Jinping has picked an American-trained economist known for pushing pro-market overhauls to run the central bank, adding to an economic team strong on proponents of liberalization. Yi Gang, a long-serving vice governor at the central bank, is being slated to take over from his mentor Zhou Xiaochuan, who has run the People’s Bank of China for a decade and a half. Mr. Yi’s nomination was approved Monday morning by the nearly 3,000 delegates to the National People’s Congress, the rubber-stamp legislature. (The Wall Street Journal: read more)
  • China Bars Foreign Fund Managers From Selling Products That Invest Offshore: Beijing has told global fund managers that have recently started operating independently in China that they can’t offer products that invest in global markets to wealthy local customers, according to executives from two global firms. The verbal instruction given to foreign money managers by Chinese market regulators, known as “window guidance,” is the latest example both of Beijing’s determination to support its domestic financial markets, and of its continued wariness of rapid capital flight from the country. (The Wall Street Journal: read more

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