Holding ABS is still tricky: the EU securitisation regulation and its UK equivalent

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christian Parker ◽  
Arun Srivastava ◽  
Paul Severs ◽  
Cameron Saylor
Keyword(s):  
Institutional Investors ◽  
Design Methodology ◽  
Due Diligence ◽  
Content Type ◽  
Fund Managers ◽  
Asset Class ◽  
Practical Implications ◽  
Risk Retention ◽  
The Eu

Purpose To highlight that the risk retention rules associated with the holding of securitization investments, commonly thought to apply only to the sponsors and manufacturers of securitisations, also affect EU institutional investors and potentially impact non-EU fund managers that invest in these assets. Design/methodology/approach To address which classes of investor are affected and then to provide an overview of the obligations on affected investors that do invest in securitization investments. Findings There is much that is straightforward about the relevant obligations but there are a number of quirks that have not necessarily been fully appreciated by the market: these include the applicability to investors on a “look through” basis that may, inter alia, affect US credit fund managers with EU institutional investors. Practical implications EU institutional investors that do invest in this asset class should be considering the need to take practical steps to prepare written due diligence materials; non-EU credit managers that run e.g. ABS funds offered into the EU or in which there may be EU institutional investors should consider if they may have any obligations under the EU Securitization Regulation. Originality/value The aspects of the Securitization Regulation that affect institutional investors and regular fund managers have not been addressed as thoroughly as they have by the main securitization sector (banks, CLO managers and similar). This article seeks to remedy that and should prove of value to compliance, legal and other professionals at those types of institution.

Avoid M&A assimilation heartburn: an actionable model for cultural due diligence and integration

2019 ◽  
Vol 47 (4) ◽  
pp. 20-25 ◽  
Author(s):  
Tim Galpin
Keyword(s):  
Design Methodology ◽  
Medium Size ◽  
Due Diligence ◽  
Cultural Comparison ◽  
Integration Model ◽  
Content Type ◽  
Practical Implications

Purpose This paper offers an approach to deal with the value destruction caused when culturally incompatible organizations merge. Design/methodology/approach A field-tested Cultural Comparison and Integration Model is demonstrated. 10; Findings The model illustrates how managers can compare and integrate cultures of combining firms using “cultural levers”. Practical implications A case example of the model in practice is included. Originality/value The model has been tested in a large and medium size organizations in a variety of industries and nationalities.

Risk managing contractual routes to effective innovation procurement

2019 ◽  
Vol 35 (10) ◽  
pp. 18-20
Keyword(s):  
Risk Management ◽  
Design Methodology ◽  
Reading Time ◽  
Public Procurement ◽  
Public Organization ◽  
Content Type ◽  
The Public ◽  
Pertinent Information ◽  
Practical Implications ◽  
The Eu

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings This research paper concentrates on the public procurement of innovations (PPI) within the EU as a mechanism for stimulating private sector R&D efforts that solve public organization-identified problems. The authors encourage less risk aversion and greater risk management to encourage the increased use of cost-plus contracts to spread some risk between the procurer and supplier, which should in turn attract more innovative companies to participate in PPI exercises. Originality/value The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

How fund managers in Malaysia make decisions

2015 ◽  
Vol 7 (1) ◽  
pp. 72-87 ◽  
Author(s):  
Samsukri Glanville bin Mohamad Glanville bin Mohamad ◽  
Chad Perry
Keyword(s):  
Behavioral Finance ◽  
Design Methodology ◽  
Quantitative Methods ◽  
Western Country ◽  
Content Type ◽  
Fund Managers ◽  
Interview Research ◽  
Different Types ◽  
Investment Process ◽  
Practical Implications

Purpose – The purpose of this paper is to investigate how fund managers in a non-Western country like Malaysia follow investment processes developed in the West and taught in the finance departments of universities. Design/methodology/approach – This convergent interview research investigates how fund managers in Malaysia actually make their decisions, and develops a framework about their investment process. Findings – Understanding the economy was important for the managers but was an ongoing learning process. Their analyses sometimes started bottom-up or top-down, but all followed a four-layer process. The managers did not believe the investment process could be quantified. Research limitations/implications – Convergent interviewing is meant to be a first step in a complete research program. So, future researchers could consider extending the research to different periods, different research settings in other countries like Singapore, India or Indonesia, different types of investors and different methodologies like surveys. Practical implications – Practitioners should build on their experience, and understand principles of behavioral finance. Students in business schools should be taught in an experiential way, and school staff should use qualitative methods like convergent interviewing in their research projects. Originality/value – Contributions centre on the article’s behavioural finance findings that experience and non-quantitative methods are the core of Malaysian investment managers’ decision-making, and on its detailed description of the unusual research methodology in finance of convergent interviewing.

ESMA issues Brexit opinions to EU regulators: a warning shot not only to the UK but also to the EU27

2017 ◽  
Vol 18 (4) ◽  
pp. 50-52
Author(s):  
William Yonge ◽  
Simon Currie
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Content Type ◽  
Regulatory Response ◽  
Market Participants ◽  
Financial Firms ◽  
Practical Guidance ◽  
The Uk ◽  
Practical Implications ◽  
The Eu

Purpose To summarize and analyse four opinions issued in May and July 2017 by the European Securities and Markets Authority (“ESMA”) concerning regulatory and supervisory arbitrage risks that arise as a result of increased requests from financial market participants to relocate activities and functions in the EU27 following the UK’s decision to withdraw from the EU, and the expected regulatory response to those risks. Design/methodology/approach Discusses the possible relocation of financial firms, activities and functions following the UK’s decision to withdraw from EU; the resulting cross-sectoral regulatory and supervisory arbitrage risks that ESMA foresees; nine principles that ESMA enumerates to guide its regulatory response to those risks; some common themes that emerge from ESMA’s July Opinions; and the implications for UK firms and trading venues seeking to establish a presence in the EU 27. Findings ESMA foresees regulatory and arbitrage risks in Brexit and a potential “race to the bottom” as certain national regulators jostle for and grab UK market share. Practical implications UK firms and trading venues seeking to establish a presence in the EU27 from which to operate will need to give detailed consideration and focus to the resources and operational substance which will need to be located in the jurisdiction in which that presence is established. Originality/value Practical guidance from experienced financial services, securities and fund management lawyers.

EU whistleblowing rules to change in favor of whistleblowers

2020 ◽  
Vol 21 (1) ◽  
pp. 55-61
Author(s):  
Alja Poler De Zwart
Keyword(s):  
Design Methodology ◽  
Eu Law ◽  
Member States ◽  
Content Type ◽  
Eu Member States ◽  
Minimum Standards ◽  
Practical Guidance ◽  
Practical Implications ◽  
The Eu ◽  
Reporting Channels

Purpose To describe the new EU Whistleblowing Directive and its implications. Design/methodology/approach Describes organizations to which the Directive applies, the scope of reportable whistleblowing concerns, whistleblowers’ reporting channels and mechanisms, whistleblower protections, how organizations should respond to whistleblower reports and how organizations should prepare for the new rules. Findings The new Directive will require Member States to create rules for organizations with more than 50 workers, will mandate such organizations to implement whistleblowing hotlines for reporting a broad range of EU law violations, and will contain minimum standards on how to respond to and handle any concerns raised by whistleblowers. Practical implications Organizations in the EU can and should start taking initial steps to prepare for the new rules as soon as possible. There will likely be some differences among whistleblower rules in individual EU Member States. Originality/value Practical guidance from experienced corporate, technology, media, telecommunications and compliance lawyer.

Rival team effects in cause-related sports marketing

2019 ◽  
Vol 21 (1) ◽  
pp. 23-45
Author(s):  
Bridget Satinover Nichols ◽  
Joe Cobbs ◽  
B. David Tyler
Keyword(s):  
Design Methodology ◽  
Sports Marketing ◽  
Due Diligence ◽  
Potential Influence ◽  
Content Type ◽  
Cause Related Marketing ◽  
Conditional Effects ◽  
Sports Team ◽  
Practical Implications ◽  
Significant Moderator

Purpose The purpose of this paper is to examine how reference to a rival or favorite sports team within cause-related sports marketing (CRSM) campaigns affects fans’ intentions to support the cause. The purpose of the studies is to assess the perils of featuring a specific team in league-wide activations of cause-related marketing. Design/methodology/approach The research comprises three experiments. Study 1 employs CRSM advertising to test fans’ responses when rival or hometown team imagery is featured by Major League Baseball (MLB). Studies 2 and 3 utilize a press release to activate a cause partnership in MLB and the National Basketball Association (NBA) and assess the potential influence of team involvement and schadenfreude toward the rival team. Findings Contrary to previous research, results demonstrate that rival team presence in league-wide activation can reduce intentions to support the cause effort across both leagues, but not in all circumstances. The influence of rival team exposure on perceived sincerity is moderated by team involvement with the cause in MLB, but not the NBA. However, sincerity consistently enhances cause support across all studies. While conditional effects of schadenfreude are noted, it is not a significant moderator of cause support. Research limitations/implications This research exposes the nuance of league-wide CRSM activations. Specifically, the rival team effect on perceived sincerity seems to be league dependent, and subject to team involvement with the cause. Moreover, these results are limited to the leagues studied. Practical implications League administrators and their cause-related partners should exercise due diligence when promoting their affiliation using specific teams and levels of involvement with the cause. Originality/value These studies produce results that differ from the limited prior research within the domain of league-wide CRSM, and therefore advance the conversation regarding how best to activate such campaigns.

Institutional investors and voluntary disclosure and transparency: the case of Egypt

2017 ◽  
Vol 17 (1) ◽  
pp. 134-151 ◽  
Author(s):  
Doaa El-Diftar ◽  
Eleri Jones ◽  
Mohamed Ragheb ◽  
Mohamed Soliman
Keyword(s):  
Institutional Investors ◽  
Voluntary Disclosure ◽  
Design Methodology ◽  
Positive Impact ◽  
Corporate Disclosure ◽  
Firm Characteristics ◽  
Policy Makers ◽  
Content Type ◽  
Bank Ownership ◽  
Practical Implications

Purpose Disclosure and transparency are major pillars of corporate governance which need to be greatly promoted in Egypt. This research aims to understand how different kinds of institutional investors affect levels of voluntary disclosure and transparency. Design/methodology/approach The research was conducted on the most active Egyptian companies over a period of five years. A voluntary disclosure checklist was first developed to assess levels of voluntary disclosure and transparency. Findings Empirical results support significant positive impacts of both bank ownership and foreign ownership on voluntary disclosure and transparency. Among the four firm characteristics controlled for in the research, firm size was the only one with a highly significant positive impact on voluntary disclosure and transparency. Research limitations/implications The results of this research may not be generalized to all companies, as it was only conducted on the most active firms on the Egyptian Exchange. Therefore, it is recommended that future researches integrate a more diversified sample. Practical implications The research provides empirical evidence that institutional investors are not a homogeneous group and that different kinds of institutional ownership impact differently on voluntary disclosure and transparency. As such, some institutional investors are more influential than others when it comes to increasing corporate voluntary disclosure and transparency and in reducing agency problems. Originality/value This research offers assistance to policy makers interested in enhancing corporate disclosure and transparency. It is particularly important during any adjustment to ownership policies in Egypt.

Non-compliance of licence holders towards disclosure based regulation in Malaysian securities markets

2016 ◽  
Vol 23 (3) ◽  
pp. 605-612
Author(s):  
Asmah Laili Yeon ◽  
Faridahwati Mohd Shamsudin
Keyword(s):  
Capital Markets ◽  
Design Methodology ◽  
Ethics Training ◽  
Securities Market ◽  
Securities Markets ◽  
Content Type ◽  
Fund Managers ◽  
The Law ◽  
Investment Advisers ◽  
Practical Implications

Purpose The purpose of this paper is to examine non-compliance of licence holders towards disclosure-based regulation in Malaysian securities markets in relation to the implementation of the disclosure-based regulation. Design/methodology/approach This survey was conducted among 107 principal and representative licensees registered with the Securities Commission of Malaysia. They consist of licensed dealers, investment advisers and fund managers. The majority of the respondents were capital markets and services representative licensees, while only 17 respondents were capital markets and services licensees. Findings The survey indicates that non-compliance occurs because of lack of ethical values and orientation of the players in the industry. In addition, non-compliance was also reported to occur due to lack of understanding of law and regulations, inefficient company’s surveillance, control and internal monitoring programmes and weaknesses in the implementation and enforcement of law. Other reasons include greed (wanting to be rich quickly), selective application of the law, complicity between offenders and regulators, slow judicial processes and high legal cost for victims to pursue compensation. Practical implications As the enforcement agency, Securities Commission should further enhance efforts to monitor and enforce the law of capital markets. On the other hand, the courts have to impose fines on criminals based on the extent of the losses investors have suffered by investors and on the effects of the crime on market stability. More importantly, ethics training should be carried out to license holders by the relevant bodies and agencies in the securities market. Originality/value This paper provides measures on how to curb the unethical behaviour by carrying out ethics training and introducing new rules and regulations for the industry.

An analysis of the obligations of gambling entities under the FATF's 2003 anti‐money laundering recommendations

2006 ◽  
Vol 9 (1) ◽  
pp. 7-18 ◽  
Author(s):  
Jackie Johnson
Keyword(s):  
Money Laundering ◽  
Design Methodology ◽  
Due Diligence ◽  
Content Type ◽  
Suspicious Transaction ◽  
Financial Action Task ◽  
Customer Due Diligence ◽  
Business Sectors ◽  
Practical Implications ◽  
Consultation Paper

PurposeTo highlight the compliance issues which face gambling entities with the implementation of the Financial Action Task Force's (FATF's) 2003 Forty RecommendationsDesign/methodology/approachTo determine the gambling sector's attitudes towards the FATF's new anti‐money recommendations their responses to an earlier FATF consultation paper are analysed. Interested parties were asked to provide feedback on a number of options proposed by the FATF. Twenty six of the 145 respondents provided feedback on issues relating to the gambling sector. It is these responses that form the bases of the analysis in this paper.FindingsThe preferences of the gambling sector were not taken on board by the FATF. The increased customer due diligence (CDD), suspicious transaction reporting and the identification of politically exposed persons will be a burden on casino operators, the only gambling sector to be specifically identified in the new recommendations. Non‐compliance could be a serious issue.Research limitations/implicationsThe small number of responses from the gambling sector does place limitations on the ability to generalise the outcomes to the global gambling industry, though five of the respondents were gambling organisations.Practical implicationsFor regulators, the possibility of non‐compliance by the gambling sector should be addressed as should the likelihood of pressure for reduced CDD procedures.Originality/valueThe FATF's updated 2003 Forty Recommendations impose considerable compliance costs on the financial sector. A number of other business sectors are also caught within the scope of these new recommendations. This paper addresses anti‐money laundering compliance issues for the gambling sector, an area not previously explored.

Exchange-traded fund investing as European open-end diversified core equity real-estate funds' cash substitute

2020 ◽  
Vol 38 (2) ◽  
pp. 156-160
Author(s):  
Arvydas Jadevicius
Keyword(s):  
Real Estate ◽  
Design Methodology ◽  
Private Equity ◽  
Real Estate Market ◽  
Content Type ◽  
Responsible Investment ◽  
Asset Class ◽  
Private And Public ◽  
Exchange Traded Fund ◽  
Practical Implications

PurposeThe study is set to explore a viability for substituting part of cash holdings within European open-end diversified core equity (ODCE) real-estate funds with listed real-estate exchange-traded fund (ETF) alternative. Academically, this research bridges a knowledge gap within private real-estate market research.Design/methodology/approachFirst, the study investigates the correlation between ODCE and ETFs to assess series interdependence. Next, the study generates a blended ODCE and ETF portfolio and examines its performance by quantifying a) the contribution to returns and b) the diversification benefits.FindingsThe findings suggest that a 1 percent spare cash allocation to an ETF increases ODCE fund returns by few bps although the diversification benefits are more nuanced.Practical implicationsReal estate and other investment vehicles are encouraged to review their cash-holding strategies. Real estate, infrastructure or private equity vehicles could designate a small proportion of available cash to asset class-specific ETFs. These cash substitutes are likely to increase returns and could strengthen diversification, although there are some caveats. For ESG-conscious investors, sustainable ETFs and associated passive conduits with strong responsible investment characteristics could provide cash replacement alternatives at the margin.Originality/valueThe study adds additional evidence on the contested issue of blending private and public real estate.

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