COMPANIES LISTED in the European Union face a new set of tough corporate governance rules aimed at p...
COMPANIES LISTED in the European Union face a new set of tough corporate governance rules aimed at preventing an Enron-style scandal in Europe, reports the FT.
The rules are a sign of the EU's determination to increase investor protection and prevent corporate fraud in the wake of the crisis that rocked US markets.
The rules, to be proposed to the European Commission by legal experts next week, could lead to a shake-up in corporate governance in several EU member states, including Germany, France, Italy and Spain. However, they stop short of an EU-wide binding corporate governance law similar to the US Sarbanes-Oxley Act, which had been feared by many European companies.
After a six-month study, the Commission's group of company law experts is expected to recommend new measures to strengthen and harmonise the EU's widely diverging corporate governance rules.
IN THE Telegraph, a row broke out on Wall Street yesterday as top banks moved to settle allegations that their share research routinely dupes investors, by agreeing a new framework for the stockbroking industry.
On the day banks were supposed to respond to a settlement deal proposed by aggressive New York attorney general Eliot Spitzer, Citigroup launched a pre-emptive strike by announcing it would split its research and investment banking arms.
A new unit run by Sallie Krawcheck, the former head of Sanford Bernstein, one of Wall Street's most respected research firms, will handle Citigroup share tips.
Wall Street seems to have reached agreement on a wider settlement over charges that share research is influenced by other business relationships.
THE TIMES also picked up on this story, saying the banks appeared likely to miss yesterday's deadline to agree proposals put forward by Spitzer, and Stephen Cutler, of the Securities and Exchange Commission.
Banks would be required to pay a total of about $1 billion (£645 million) over five years into a fund to support independent researchers. The banks also have to distribute the research compiled by the rival firms to their clients.
The regulators are responding to allegations against a number of banks that their stock advice was coloured by efforts to win lucrative investment banking business.
Banks embroiled by the scandal, such as Citigroup's Salomon Smith Barney, Merrill Lynch and Credit Suisse First Boston, have responded positively to the proposals. Others such as Morgan Stanley, Goldman Sachs and Bear Stearns, that have largely managed to avoid the scandal, complain that the solution is unfairly costly to them.
VIRGIN ATLANTIC is scrambling to avoid being left without terrorism insurance after the Government ends its emergency scheme for airlines today, the Telegraph reports.
Sir Richard Branson's airline admitted yesterday that it has not found a replacement for Troika, the third-party war risks insurer set up by the Government after September 11. Troika's cover ends at midnight tonight.
Brokers say terrorism insurance premiums have tripled in the past year, while the number of insurers offering third-party terrorism cover has fallen from 90 to three - AIG, Allianz and Warren Buffett's Berkshire Hathaway.
CHINA TELECOM is also facing a battle, according to the FT. The mainland's largest fixed line operator, has delayed the pricing of its initial public offering until next week after failing to generate sufficient demand from investors for the shares.
While there were enough orders from retail investors to cover the public offer, there was not enough demand from fund managers for the much larger institutional tranche of the deal.
THE SCOTSMAN reports consumer confidence has fallen to its lowest level this year, and in Scotland has now turned negative.
The monthly report, by research firm Martin Hamblin GfK, reports its consumer confidence index slid by three points in October to stand at its lowest level since December last year. The most marked decrease in confidence was seen in how people viewed the general economic situation over the last year.
Perceptions of the economy are now at their lowest level since September 2000, with the reading for Scotland showing more consumers negative than positive.
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