Nigerian Bourse, Nomura-JFSA, Amazon Tax Battle: Compliance
04 December 2013
Posted by: Author: Carla Main
Author: Carla Main (Bloomberg)
The Nigerian Stock Exchange said it
plans to ban directors and controlling shareholders from voting
in transactions such as takeovers to protect minority investors.
The proposal is part of measures to strengthen corporate
governance and will be introduced "as soon as possible,”
Tinuade Awe, the head of the Lagos-based exchange’s legal and
regulation division, said in an e-mailed response to questions
on Nov. 29. The recommendation has been released for public
comment and is subject to the approval of the Securities and
Exchange Commission, she said.
The NSE is working to strengthen corporate governance as it
targets a market capitalization of $1 trillion by 2016 from its
current $75.7 billion. Nigeria ranks 139th out of 174 in
Transparency International’s Corruption Perceptions Index, where
lower scores signal increased graft. The Lagos bourse initiated
a corporate governance index of 10 companies this year and plans
to extend it to others in 2014, Chief Executive Officer Oscar
Onyema said Oct 25.
Germany, Netherlands Urge Limited Backstop for Non-Euro Nations
The European Union is weighing a stripped-down addition to
the emergency aid available for non-euro nations, after Germany,
the U.K. and the Netherlands opposed adding a financial-sector
tool to the rescue program.
EU finance ministers may discuss the 50 billion-euro ($68
billion) balance-of-payments fund at their Dec. 10 meeting,
according to a Nov. 25 draft agenda.
Current proposals, published on the EU’s website, call for
adding precautionary credit lines to the fund’s toolbox and
don’t mention a previously proposed bank recapitalization fund.
If EU ministers approve the current plan, it would give the
balance-of-payments fund fewer tools than the European Stability
Mechanism, the euro zone’s 500 billion-euro firewall fund. The
ESM has the ability to grant financial-sector bailouts, and
ministers also are developing guidelines for direct aid to
banks, bypassing governments.
Sovereign Debt Ratings Fall Short of EU Standards, ESMA Says
The European Union regulator that oversees Moody’s
Investors Services, Standard & Poor’s and Fitch Ratings said
credit-rating companies aren’t meeting standards when they grade
Firms failed to keep ratings decisions secret before
publishing them, breached guidelines on conflicts of interest
and gave too much responsibility to junior staff members when
deciding on the creditworthiness of Europe’s governments, the
Paris-based European Securities and Markets Authority said in a
ESMA, which hasn’t fined a credit-rating firm since it was
created in 2011, said in March that the methodology the firms
used to evaluate EU banks wasn’t accurate.
Moody’s, S&P and Fitch registered with ESMA in 2011,
becoming directly supervised by a single EU regulator for the
first time. The findings come from a six-month investigation,
which may result in fines if the firms don’t improve, ESMA said.
The regulator found "several instances” of unauthorized
disclosures to third parties.
Spokesmen for the three firms said they are committed to
complying with the regulations.
Nomura to Punish Tipsters as Japan FSA Signals End to Crackdown
Nomura Holdings Inc. (8604) said employees who leaked insider
information on client transactions three years ago will be
punished as the regulator signals an end to a crackdown that
roiled Japan’s largest brokerage last year.
Nomura will take "strict action” against the two
employees who gave confidential data to three asset management
firms, Kenji Yamashita, a spokesman in Tokyo, said Dec. 1,
without giving details. Japan’s securities watchdog recommended
fining the funds, including a unit of Nippon Life Insurance Co.,
for trading on the tips.
The Financial Services Agency ordered Nomura to improve
compliance last year and the bank’s top two executives resigned
after staff leaked information on share sales it managed. The
scandal prompted the FSA to propose stiffer penalties for
tipsters, including prison, to restore confidence in local
markets that have rebounded this year.
The findings close the chapter on the regulator’s probe
into insider trading connected to public share offerings, an FSA
official said at a news briefing Dec. 1, asking not to be named
in accordance with the agency’s policy. The FSA ordered Nomura
to submit a report by early next month on the effectiveness of
measures the firm has implemented since 2012 to prevent further
leaks, the official said.
Nomura penalized 17 employees for information leaks last
year and will act against the two employees in accordance with
its internal rules, Yamashita said.
Amazon Rejected by U.S. Supreme Court on New York Sales Tax
The U.S. Supreme Court stayed out of the multibillion-dollar fight over Internet sales taxes, leaving intact a New
York law that forces Amazon.com Inc. (AMZN) to collect money from
customers in that state.
The justices, without comment, yesterday rejected appeals
by Amazon and another Internet retailer, Overstock.com Inc. (OSTK),
which said New York is violating the Constitution by demanding
tax collection from companies that don’t have facilities in the
state. New York’s top court upheld the state law.
States lose an estimated $23 billion a year in uncollected
sales taxes from web retailers. Although Amazon has agreed to
collect taxes in some states as it sets up distribution centers
around the country, it has resisted efforts by others to impose
sales taxes unilaterally. New York’s measure is among a handful
that have been dubbed "Amazon laws” because they affect only
the largest online sellers.
Amazon argued in its appeal that the New York law subjects
Internet retailers to "significant burdens.” Amazon, the
world’s biggest online retailer, now collects taxes in 16
The company supports proposed federal legislation that
would let states collect taxes from online retailers with at
least $1 million in annual out-of-state sales.
The cases are Overstock.com v. New York State Department of
Taxation, 13-252, and Amazon.com v. New York State Department of
Levitt Says Banks ‘Battling’ Volcker Rule, Dodd-Frank
Arthur Levitt, former Securities and Exchange Commission
chairman, said the banking industry is lobbying hard to reduce
the impact of regulations. Levitt talked with Bloomberg’s Tom
Keene and Michael McKee on Bloomberg Radio’s "Bloomberg
This article first appeared in bloomberg.com.