Global Regulatory Briefing MARCH 18, 2010 (I) REGULATORY REFORM US - US earns $33 million on rescued-bank warrant auctions US - U.S. Senator Dodd boosts Fed risk oversight in financial in week reform bill EU – European central banker says to phase out emergency EU - EU hedge fund rules stalled, UK digs in heels lending EU - Schaeuble calls for closer euro zone integration, details US - US bank regulators may extend crisis-era guarantee monetary fund US - U.S. thrift regulator defends industry, agency EU – ECB’s Trichet, European Monetary Fund idea “deserves EU - Big EU insurers resilient in stress test - watchdog examination” (III) ENFORCEMENT & SUPERVISION US - Bernanke defends Fed small-bank supervision role US - Judge won't modify core of 2003 U.S. financial analyst US - Citi to boost proprietary trading unit - report “firewall” deal US – White House rips business lobby over financial reform GERMANY - Germany's Merkel considering risk charge on US - Big majority in U.S. wants Wall Street regulation banks - paper (II) FINANCIAL CRISIS & ECONOMY AUSTRALIA – Central bank says Australian bank rate rises US - Examiner sees accounting gimmicks in Lehman demise outpace funding costs GLOBAL REGULATORY BRIEFING MARCH !8 UK - UK's FSA bulks up for tougher supervision (X) TRADE & CROSS BORDER UK - UK's FSA charges banker, wife with insider dealing, SAUDI ARABIA - Saudi Arabia approves first ETF open for seeks extradition of third foreigners UK - UK bank customers to get overdraft opt-out option JAPAN/TAIWAN – Taiwan exchange eyes ETF cross-listing US – U.S. bank regulator says jury still out on overdraft fees with Tokyo – report IRELAND - Police arrest Anglo Irish Bank's former chairman AUSTRALIA - Australia tells Beijing to stay out of iron ore US - Wachovia pays $160 million to settle drug-money probe talks RUSSIA - Russia corruption “may force Western firms to quit” ZIMBABWE - Zimbabwe central bank head attacks planned US/INDIA - US accounting watchdog sanctions Satyam's company seizure auditors TAIWAN - Taiwan approves China financial investment rules (IV) ACCOUNTING AND FINANCIAL STANDARDS TAIWAN - Taiwan to seek tax-free status for LCD panels in UK - UK's Myners says curbs needed on bank margins China talks GLOBAL - IASB: single set of accounting rules on track (XI) STATE ENTERPRISES EU – EU central banker backs higher risk margins for low- UK - Mandelson: UK should consider state investment fund rated bonds SINGAPORE - Ex-Morgan Stanley banker to step down as UK - UK's FSA sees British bank capital levels easing Temasek senior MD FRANCE - France says new Basel bank proposals too severe CHINA - China state seen fund open to shorting stocks GLOBAL - Regulation to trigger bank M&A - Rothschild exec (XII) COMMODITIES & ENERGY (V) TAX INDIA - India puts off nuclear bill after opposition protests RUSSIA – Russia plans capital-gains tax breaks for CANADA - More regulation needed for Canada oil sands - investors – report report GLOBAL - IMF's Strauss-Kahn casts doubt on transaction tax CHINA/ARGENTINA - CNOOC to buy stake in Argentina's US – IRS says new UBS-style foreign bank prosecution Bridas "shortly" CZECH REPUBLIC - Czechs seek to temper solar investment SWITZERLAND – Credit Suisse sees withholding tax on boom Germans' accounts - paper (XIII) ISLAMIC FINANCE US – U.S. tax-cheat probers likely to get peek at HSBC MALAYSIA - Malaysian body creates new Islamic reinsurance accounts model (VI) DERIVATIVES INDUSTRIAL POLICY EU - EU's Barnier pledges to tackle speculators MALAYSIA - Malaysia plans new economic model for growth (VII) EXCHANGES AND TRADING PRACTICES SOUTH AFRICA – South Africa land nationalization called UK – UK regulatory chief doubts value of high-speed share threat to investment trading TELECOMS & INTERNET US – U.S. regulator to propose new co-location rule US - US broadband plan aims to boost speed, wireless EU - EU's Barnier says will tackle short-selling CHINA - China warns Google to obey rules even if it pulls out EU - Splintered Europe share market seen ripe for abuse AUSTRALIA - Greens threaten to sink Telstra split EU - SmartPool plans pan-Europe dark pool data service THAILAND - Thai AIS jumps on report government won't NIGERIA - Nigeria court voids election of stock market pursue claims president UAE - UAE restricts VoIP to local firms - regulator US - Direct Edge set to become 4th U.S. stock exchange MEDIA & PRESS FREEDOM (VIII) FUNDS MANAGEMENT US - Website's instant posts of Wall Street research banned US - FDIC sets private-equity rules meeting - sources ITALY - Group takes Berlusconi to rights court on TV control (IX) CURRENCY VENEZUELA - Venezuela's Chavez calls for Internet controls US - US Senate bill threatens stiff penalties on China INTELLECTUAL PROPERTY RIGHTS CHINA - World Bank tells China to tighten policy PEOPLE CHINA - China adviser proposes forex transaction tax - report SOUTH KOREA – SOUTH Korea names OECD envoy as JAPAN – Bank of Japan’s Shirakawa says latest step not central bank chief aimed at forex US - Yellen, 2 others lead picks for U.S. Fed POLAND - Polish regulator mulls limits on forex lending US - US regulator FINRA's enforcement chief steps down SOUTH AFRICA - S.African central banker warns on carry HUNGARY - Next Hungary government may try to oust trade central bank head - report INDIA - India to gradually move to rupee convertibility- finance minister WEEK IN BRIEF The U.S. Congress generated a lot of heat this week: senators pressured China to let the yuan climb after China dismissed U.S. complaints about the currency, and Republicans snarled over a proposed Senate Democratic bill to overhaul financial regulation. British regulators lashed out over bank margins and high- frequency traders, and EU finance ministers fell short in their efforts to reach agreement on new hedge fund regulations. This Briefing is produced by Reuters News. Contact [email protected] for more information, or to be added to the distribution list. © Thomson Reuters 2010. All rights reserved. This information is being distributed free of charge. Thomson Reuters is not liable for any inaccuracies or other errors or delay in the information or for any reliance on it. This Global Regulatory Briefing contains headlines and summaries only and therefore you should refer for more detail or verification to the original sources. Republication or redissemination of this information without Thomson Reuters prior written consent is prohibited. GLOBAL REGULATORY BRIEFING MARCH 18 QUOTES "I suspect there will be many important negotiations in the weeks ahead. This is of real concern to people in my country." U.S. Ambassador to China Jon Huntsman, discussing rising U.S. pressure for China to let its currency appreciate "Over time, more exchange rate flexibility can enable China to have a monetary policy independent from U.S. cyclical conditions, which is increasingly necessary." World Bank’s China Quarterly Update report "The last thing China will do is be seen bowing to foreign pressure, even if it's the right thing to do. The Americans should keep quiet and not lecture the Chinese. Once it's left alone, China is quite likely to move on the yuan." Chinese government source "The banking industry has enjoyed more public subsidy than any other industry in our economy. It should not be able to sustain a return on equity of over 20 percent." UK financial services minister Paul Myners "To say there is some great social value to flash trading or algorithmic trading which tries to close out discrepancies in prices ... it's quite bizarre to believe that has anything other than the most minimal social value." UK Financial Services Authority Chairman Adair Turner. "The concept of abolishing, diminishing electronic proprietary trading is really like saying you do not like gravity." Jane Gladstone, senior managing director of investment banking firm Evercore Partners. "Don't let those little punk staffers take advantage of you." U.S. House of Representatives Republican leader John Boehner, urging bankers to resist a Senate Democratic bill to overhaul financial regulations. "An astounding fact to me is that we are sitting here in March 2010 and we've done nothing in the way of financial reform up to now, nothing. We hope it’s not going to end in nothing, but so far it's nothing." Alan Blinder, an economics professor at Princeton University and former vice chairman of the U.S. Federal Reserve Board. "I understand the regulators of the Basel Committee, who want to prevent such a crisis from recurring. But their recommendations on liquidity and capital are severe and taken together, risk seriously threatening the financing of the economy." French Economy Minister Christine Lagarde "It's a good outcome for the UK. We had to hang tough." Official the British Treasury, commenting on a failure by EU finance ministers to reach agreement on new hedge fund regulations. "Like electricity a century ago, broadband is a foundation for economic growth, job creation, global competitiveness and a better way of life." U.S. Federal Communications Commission, in laying out its plans for a faster, more accessible U.S. broadband network GLOBAL REGULATORY BRIEFING MARCH !8 "I have been a big fan of the transaction tax in the 1970s but since then a lot of things have changed. What has changed is the technicality of the financial industry." International Monetary Fund Managing Director Dominique Strauss-Kahn FINANCIAL SERVICES (I) REGULATORY REFORM US - U.S. SENATOR DODD BOOSTS FED RISK OVERSIGHT IN FINANCIAL REFORM BILL The Federal Reserve would take on a greatly expanded role in financial regulation under new legislation unveiled by a top U.S. Senate Democrat, in a push to move ahead with the regulatory reform that has been a top priority of President Barack Obama. The bill by Senator Christopher Dodd would give the Feb power to break up big firms that could threaten the stability of the financial system if they suffered serious problems.