Archive for January, 2011

Chinese Bank To Take Control Of US Retail Bank?

Monday, January 24th, 2011

By: Ainsley Brown

In a move that would be the first of its kind, a state-owned Chinese bank could take control of a US retail bank.

The Industrial & Commercial Bank of China (ICBC) has reportedly signed a deal to acquire the majority stake in the US subsidiary of Bank of East Asia. The deal signed during the recent state visit of Chinese President Hu Jintao to the US is not final and still has to be approved by US regulators. It will be interesting to see how the regulators will rule given the high anti-China rhetoric and sentiment so prevalent in the US currently?

ICBC is not alone in expanding globally and its US move is reflective of a wider trend amongst Chinese state-owned financial institutions to expand aggressively outside of China. Given the expansionist mode of these state-owed financial institutions, the ICBC foray in to the US market should prove to be a test case for other Chinese financials considering a US entry.

A watchful eye should be kept on the US Federal Reserve with its banking oversight preview as it has the power to veto the deal.  Additionally, the very powerful Committee on Foreign Investment in the US (CFIUS) may also have to be watched, however, it is interesting to note that the size of the deal may not be big enough to attract CFIUS attention.  It is also interesting to note that since this is China and a state-owned entity size may just not matter – but we shall see.

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More Recognition for Pre-Nups?

Tuesday, January 18th, 2011

By: Emma Peart

The decision in Radmacher has potentially given even more credibility to Pre-nuptual agreements in the UK.

The case concerns a German industrial heiress and her Ex-Husband, a Former Investment Banker, who entered into a Pre-Nuptial agreement with the idea of protecting the interests they would inherit through family business.

The Judgement itself states that the approach of English Law is different to that of Scotland and most of Europe and most other international legal systems. While most other legal systems see a pre-nuptial agreement as a contractual agreement to be honoured, English Law has historically let the Court be the decision-maker in relation to financial settlements. However Radmacher has overviewed this general stance to potentially make English Law concurrent with European and indeed much international law by giving effect to the agreement by the Supreme Court upholding the Pre-Nuptial agreement.

Potentially, if more credibility is given to pre-nuptial agreements in the UK then this could mean that Pre-Nuptial agreements become even more popular as a way of protecting business assets that may be at risk in divorce settlements internationally, as they would be given even more worldwide recognition. It is also interesting to note that the initial pre-nuptial agreement was signed in Germany. Could it be seen that the English Courts perhaps wouldn’t be willing to overturn a document that would perhaps be valid in another country?

While it is an interesting step by England to turning towards the status of other countries, it should perhaps be taken with a pinch of salt. The decision in Radmacher states that “the Court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.” This potentially leaves it open to the Court to determine if the agreement has been entered into freely, or there has been undue influence upon one party to enter into the agreement for example.

The matter is open for review. The Law Commission will publish a Consultation Paper in 2011. There is likely to then be a Report with pressure for a draft bill and Legislation. It could be argued that it is at least a sign that England is following suite with most other legal systems on this matter.

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Ireland Now EU Top Hedge Fund Domicile

Monday, January 17th, 2011

By: Ainsley Brown

EU Hedge Funds Stopped Onshore

Hedge Funds, a business synonymous with offshore and often tropical locals is witnessing a surprising trend in the European Union (EU).

Are you ready for this?

Ok, one word: onshoring.

With the passage of the controversial EU Alternative Investment Fund Manager Directive last year, many a fund have abandoned offshore locations such as the British Virgin Islands, Cayman Islands and the Seychelles in favor of onshore locations, primarily Ireland.  The Directive has forced this onshoring trend largely because it imposes stringent restrictions on the marketing of non-EU domiciled funds to EU investors.

This is some welcomed good economic news for an Irish economy that took a severe battering in 2010 and remains stagnant early in 2011. According to the Irish Funds Industry Association, Ireland has become the EU domicile of choice 63% of all EU domiciled hedge funds.

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Shari’ah Compliant Investment – There’s Now An App For That

Wednesday, January 5th, 2011

By: Ainsley Brown

Shari'ah Compliance On The Go

On the go but want to check if that hot new stock tip you got is Shari’ah compliant?

Well now you can – Shari’ah compliance has gone mobile.

Amiri S3 or Shari’ah Screening System is a downloadable Blackberry application that allows its users to check over 38,000 stocks from all over the world to determine Shari’ah compliance. Amiri Capital, an alternative investment management company specializing in Shari’ah compliant investing, launched the app last year.

There is no word on any future plans to expand the app to other smartphone platforms but I am sure this will come in time.

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London Stock Exchange Listings to be quicker in 2011?

Tuesday, January 4th, 2011

By: Ainsley Brown

Listing on the London Stock Exchange (LSE) could become a much quicker process in 2011 if several of the leading investment banks in the UK follow through with their plans.  

It currently takes five weeks generally to go from a company announcing its intention to list to it being placed on the LSE – the banks want to reduce this to about two weeks. The banks are looking to complete their share price valuations in this much shorter timeframe in order to soothe investor jitters.

If I were a betting man, I would bet on the investment banks moving and moving very precipitously in early 2011 to make the listing process much shorter.

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Australia’s National Consumer Protection Law Comes Into Effect

Monday, January 3rd, 2011

By: Ainsley Brown

Talk about kicking off the New Year with a bang: it is official as of January 1, 2011 Australia now has its first national Consumer Law.

The new law ushers in a comprehensive national consumer protection regime that mandates quick remedies – repair, replace, refund – to customer complaints.  It replaces a patchwork of 20 national, State and Territorial laws and allows for seamless enforcement across Australia’s internal boarders.

With this new law the Australian government is attempting to kill two birds with one stone by simplifying and harmonizing the fair trade laws across the country it hopes to both lower the cost of doing business and create a comprehensive consumer protection regime. The law brings under one umbrella such wide ranging things as product safety, door to door selling, unfair terms in standard from contracts, and the rules governing lay-by agreements.

Happy New Year!

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