Category: Regulation

Whitehall "Lacking Finance Skills"
AccountancyRegulation

Whitehall “Lacking Finance Skills”

The world’s largest accountancy body, ACCA (the Association of Chartered Certified Accountants) has warned that urgent up-skilling in financial management across Whitehall was needed if the civil service was going to make long-term savings and improved service delivery.

ACCA says that while there is strong expertise in the finance function of the UK’s public sector, there is a need for Whitehall to invest in skills development in areas such as data analysis, procurement, project as well as financial management if savings in government are going to be made over the long term.

Gillian Fawcett, head of public sector at ACCA, said: “Spending cuts and the need to make savings in central government and other public sector bodies is set to increase in the coming years, so it is vital that there are improvements in public financial management for the taxpayer. There has been much trumpeting of the Treasury’s decision to appoint Whitehall’s first chief financial officer earlier this year, but a more root and branch reform of the public sector’s finance function is needed to garner genuine change. Like the private sector, public sector finance professionals need to see the bigger picture to be more effective, which is why skills linked to data analysis and procurement, as just two examples, are more relevant now than historically.

“There has been some recognition in Whitehall that there is a need to up-skill but there is a failure to acknowledge the biggest obstacle – building an effective finance profession in central government which is perceived positively and valued by their colleagues in an organisation which is largely made up of generalists. We believe that a culture change is necessary whereby economists and generalists value the potential contribution that financial management can make to government decision-making.”

ACCA points that a running theme that continues to crop up within the public sector is that the trend of the civil service finance professionals in government either leaving or changing roles could be hindering good governance and is in urgent need of attention.

Fawcett said: “The revolving door nature of the senior service is well-known, but it poses significant problems when it comes to delivery of good governance and corporate memory. It inhibits the ability to learn from mistakes and stifles the dissemination of best practice. This is also not helped by the skills gaps relating to procurement, project and financial management that still persist across Whitehall.”

Real Estate Finance Duo to Join Hogan Lovells
LegalRegulation

Real Estate Finance Duo to Join Hogan Lovells

Hogan Lovells has recruited real estate finance partners Andrew Flemming and Jo Solomon to join the London finance practice. They join from Berwin Leighton Paisner and bring a wealth of real estate finance experience with them.

Flemming ‘s transactional experience includes advising Barclays Capital on a £660m loan-on-loan to Maybourne Finance Limited and advising Lloyds Banking Group on a £266m investment facility to Peel Holdings to refinance a large portfolio of UK regional properties, which involved acting for a club of five lenders.

Solomon’s deals include advising on the St. David’s Limited Partnership, a joint venture between Land Securities Group PLC and Capital Shopping Centres PLC, to refinance the cost of acquisition and development of the St David’s and St David’s 2 shopping centres in Cardiff; and advising Blackstone on the development finance provided by Lloyds TSB Bank Plc in relation to the development of building 6 at Chiswick Park.

Commenting on their arrival, Sharon Lewis, global head of Hogan Lovells finance practice, said: “First class strength in depth in a wide breadth of different banking specialisations is vital to maintaining our position as a leading adviser to banks and other key financial institutions so continuing to grow our finance practice globally is a key strategic priority for the firm. Andrew and Jo’s expertise is a natural fit with our banking and real estate practices. I am delighted that they will be joining our team”.

Flemming said: “Hogan Lovells has a thriving global finance practice with numerous high profile clients across a range of sectors and a truly collaborative culture. I am looking forward to working closely with the banking and real estate teams to continue to build the strength and depth of Hogan Lovells’ real estate finance practice”.

Solomon added: “Hogan Lovells’ international platform is a significant benefit to global borrowers and lenders in being able to offer them a seamless international service that few other firms can provide. I’m delighted to joining a firm with such a stellar real estate reputation and with such strong expertise across a number of different practice areas that are needed to carry out complex, high value real estate finance deals.”

Compliance “Is at a Tipping Point”
Global ComplianceRegulation

Compliance “Is at a Tipping Point”

Today’s Chief Compliance Officers (CCOs) are in a position similar to that of Chief Financial Officers (CFOs) 15 years ago, and they face a comparable opportunity and challenge: how to become a more strategic partner in the organisation; a vital member of the C-suite, according to the fourth annual State of Compliance 2014 Survey released by PwC US. Survey findings show the role of the CCO has gained more prominence over the last decade and is evolving rapidly.

“As the CCO’s role further evolves, compliance will become more integrated with business performance and CCOs will assume a more strategic role. Overall, the future of compliance depends on defining not just the compliance function, but also specifically the organisation’s desired role for the compliance chief,” said Sally Bernstein, principal, PwC. “It’s difficult to be ‘chief’ in the current environment, but more companies recognise they need to get into the ‘business of compliance,’ and are working towards that goal.”

The results of the survey show that compliance officers have been tasked with an increasing number of responsibilities, asked to manage a complex variety of compliance risks and exceeded expectations in many areas. Despite sometimes having a shortage of resources, CCOs have often achieved successes within their companies. The business and regulatory environment, however, is becoming more complex and CCOs are expected to deliver better information to help executive management identify and manage organisational risks.

“There is an increased focus on compliance as a business-enabling function and a growing interest in the topic overall. This is clearly demonstrated by this year’s survey participation rate which grew 35 percent to over a thousand respondents from under 800 last year,” said Andrea Falcione, managing director, PwC. “PwC sees the increase in survey participants as an indication that many companies are using this study as a benchmarking exercise to help determine their ongoing compliance program needs.”

According to PwC, to assume a more strategic role in their organisations, CCOs should engage with the business in more meaningful ways. PwC recommends that emulating the behaviours of Chief Information Officers (CIOs) to achieve a similar evolution can be beneficial for CCOs, suggesting that CCOs exhibit the following behaviours: cultivate strong support of the CEO; maintain close working relationships with business leaders to drive understanding; leverage innovation ideas from other companies and functions; understand the organisational strategy and the broad range of risks associated with that strategy; and, recognise that compliance skills must be an enterprise-wide capability.

Survey results show corporate compliance staffing and budgets are trending up across the board. For the majority of companies surveyed, compliance budgets and staffing are increasing or staying at the same level across all industries. The survey also finds that organisations with more mature compliance functions, which are typically more regulated, tend to have larger budgets and staff than less regulated companies.

UK Law Firms Achieve Modest Growth in Q4
LegalRegulation

UK Law Firms Achieve Modest Growth in Q4

Fees per fee earner at the top 100 UK law firms have increased by 2.4% this quarter, compared with the same period last year, according to the latest quarterly legal sector survey from Deloitte. This resulted in overall growth of 3.6% in fees per fee earner this financial year.

While the underlying rates of growth were relatively modest this quarter, firms ranked between 51-100 boosted fee income by 7.1% in the last 12 months, driven largely by merger activity.

Jeremy Black, partner in Deloitte’s professional service practice, said: “Despite a slowing rate in fee income growth this quarter, firms have on average delivered strong progress over the financial year. This year’s figures highlight the consolidation in the market, particularly amongst the smaller firms.”

The survey also tracked annual fees per fee earner over a six year period and found that the UK’s 10 largest firms generated 18% growth over the last six years. In contrast, firms in the 26-50 category achieved only a 1% increase reflecting a decline in real terms. For firms in the 51-100 category things were even tougher with fees per fee earner still well below the April 2008 figures.

Black commented: “The different performance levels experienced by firms in the various size categories reflect different market dynamics, with particularly intense competition in the more commoditised end of the market. Despite modest underlying growth in the final quarter, for the larger firms we are seeing confidence continue to increase. As the economy picks up we would expect to see a further widening in the gap in underlying performance between firms in the top 50 by size and the smaller firms.”

CSI and YBS Fined for Unclear Promotions
Global ComplianceRegulation

CSI and YBS Fined for Unclear Promotions

The Financial Conduct Authority (FCA), the UK financial watchdog, has fined both Credit Suisse International (CSI) and Yorkshire Building Society (YBS) for failing to ensure financial promotions for CSI’s Cliquet Product were clear, fair and not misleading. CSI was fined £2,398,100 and YBS’s fine was £1,429,000.

The Cliquet Product was designed by CSI to provide capital protection and a guaranteed minimum return with the apparent potential for significantly more if the FTSE 100 performed consistently well. The probability of achieving only the minimum return was 40-50% and the probability of achieving the maximum return was close to 0%. Despite this CSI’s and YBS’s financial promotions marketed the potential maximum return on the product as a key promotional feature.

The target market for the Cliquet Product was described by CSI as “stepping stone customers” who were conservative and risk averse. The product was typically sold to unsophisticated investors with limited investment experience and knowledge through a number of distributors. 83,777 customers invested a total of £797,380,716 in the product; with YBS being the distributor responsible for approximately 75% of the total amount invested.
The maximum return figure was given undue prominence in both CSI’s product brochures for the Cliquet Product, which YBS approved and provided to their clients, and in YBS’s own financial promotions for the product, some of which also did not clearly explain how returns were calculated.

Tracey McDermott, FCA’s director of enforcement and financial crime, said: “It is crucial that firms consider the needs of their customers from the time that products are being designed through to their marketing and sale. The information provided to customers forms an important part of this. Financial promotions are often the primary source of information for consumers and in this case CSI and YBS let their customers down badly. These promotions were a serious breach of the requirement to be clear, fair and not misleading.

“CSI and YBS knew that the chances of receiving the maximum return were close to zero but they nevertheless highlighted this as a key promotional feature of the product. This was unacceptable.”

In September 2010, following concerns raised by third parties, including Which?, YBS changed its promotions so that undue prominence was no longer given to the potential maximum return. However, YBS continued to cite the potential maximum return and to give an unfair impression of the likelihood of achieving it. CSI also reviewed its promotions in response to the third parties’ concerns, but decided not to change its product brochure significantly.

In addition, the FCA found that CSI failed to have a procedure in place for a complete review of their long running promotions on a periodic basis. If CSI’s processes had included such a review, this may have resulted in the problems with the product brochure being remedied earlier.

FCA to Give Firms Regulatory Help
Global ComplianceRegulation

FCA to Give Firms Regulatory Help

Innovative firms, particularly smaller start-ups, will be offered the chance to work with the Financial Conduct Authority (FCA) whilst they develop new technologies and approaches to ensure they are compliant with regulations from the moment they go live, says FCA chief-executive Martin Wheatley.

Speaking at the London office of Bloomberg, the financial media company, Wheatley said the initiative, Project Innovate, was designed to ensure that the regulatory environment supported innovation in the market and was not seen a as a barrier. Wheatley said he also wanted a situation where regulators were keeping pace with technological advancement and not playing catch up.

Wheatley said that given London’s position as a European leader in the development of financial technology it was vital that the FCA took an open approach which would benefit firms and consumers.

Wheatley said: “It’s an imperative for regulators to be standing on the right side of progress. And this is one of the reasons why the FCA has launched Project Innovate.

“A key objective of the programme is to make sure that positive developments, the ones that promise to improve the lives of consumers or clients, are supported by the regulatory environment. In other words, we want an FCA that creates room for the brightest and most innovative companies to enter the sector.

“So, priority areas here might include the likes of mobile banking, online investment or money transfer, where we’re seeing innovations such as apps that allow you to take a picture of a bill and make payments with a tap of the smartphone. The possibilities opening up are extraordinary – and it’s clearly important they can be developed in the UK.

“To help this happen, the FCA is opening its doors to financial service firms (large and small) who are developing innovative approaches that aren’t explicitly addressed by current regulation – or where the guidance may be ambivalent.

“This engagement has already begun with a number of start-ups, as well as organisations like Tech City and Level 39, coming to talk to the FCA.

“Following on from this, we will be pulling together a scoping document exploring how innovation can be supported more effectively. That paper will focus on FCA expectations of firms, as well as specifics around advice and support for businesses bringing new models of financial service to market.

“In the meantime, we’ve already opened a hub in our policy team, which is pulling together FCA expertise to support innovators in two distinct ways.

“First, by providing help to firms developing new models or products advice on compliance so navigating the regulatory system. Second, by looking for areas where the system itself needs to adapt to new technology or broader change – rather than the other way round.”

“On top of this, we’ve also launched an incubator to support innovative, small financial businesses ready themselves for regulatory authorisation.”

Unqualified Accountants a Risk for UK Small Businesses
AccountancyRegulation

Unqualified Accountants a Risk for UK Small Businesses

UK small businesses could be inadvertently damaging their growth prospects by paying accountants who aren’t even qualified, warns the Association of Chartered Certified Accountants (ACCA).

The warning comes after research from cloud accounting software provider ClearBooks showed just 8% of small businesses considered an accountant’s qualifications when choosing one. ACCA points out that there is no law preventing anyone from calling themselves an accountant, and that as a result small businesses could be unknowingly paying someone without the necessary skills to handle their finances and help their business grow, who isn’t regulated or insured against risk.

Sarah Hathaway, head of ACCA UK, said: “Unlike solicitors and some other professional roles, the term accountant is not protected by law, so absolutely anyone can call themselves one, even without any training. Even those with minimal training in book-keeping or just one aspect of accountancy, will not always have the same rigorous qualifications and insurance as a chartered certified accountant. They will also be limited in helping the business grow.

“The ClearBooksPro survey showed that 32% of small businesses, when asked what they wanted help with from their accountant, identified business strategy – the largest response to that question. A successful small business accountant, whether it is an external practitioner or an in-house person, has to perform multiple roles and be able to provide strategic and operational input – it is impossible to get this from an unqualified person who has trained for book-keeping or tax only, because their skill-set is too narrow.

“Equally, any business with serious growth potential needs a person who can adapt quickly to their changing management accounting needs, and ideally be able to build and manage a professional finance function. Business growth is never even and rarely goes according to plan, so it’s vital to have the right skills in place early.

“If you were employing someone for a job, you would check their qualifications. You should be even more thorough when you are hiring the services of someone who will be at the helm of your business strategy,” said Hathaway. “To be sure you have the right kind of finance professional for your small business, who has a wide skill-set – the enterprise needs to grow – check they are fully qualified.”

Capgemini to Deliver Finance and Accounting Services to NBCUI
AccountancyRegulation

Capgemini to Deliver Finance and Accounting Services to NBCUI

Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, has announced that Capgemini America Inc., its North American subsidiary, has been selected by NBCUniversal International (NBCUI), the international arm of one of the world’s leading media and entertainment companies, to deliver business process outsourcing (BPO) services to help standardise and optimise its finance and accounting operations. With this newly signed contract, Capgemini now provides BPO services to four of the top five companies in the media and entertainment industry.

As part of the project, Capgemini aims to provide NBCUI with services in general accounting, accounts payable and accounts receivable via Capgemini Global Delivery Centres, while partnering with NBCUI’s finance team across its international divisions. Using Capgemini’s Global Enterprise Model1, NBCUI will benefit from the accelerated adoption of global finance standards, streamlined processes and the enhanced performance of its transactional finance activities, driving working capital and cash flow improvements, as well as better customer and partner insights.

“Capgemini has a strong track record of working with many of the world’s largest media and entertainment companies, and we’re excited to support an integral part of NBCUI’s key operations,” said Brenda Heath, Head of Capgemini BPO’s Media and Entertainment business unit. “The combination of our people, integrated solutions and Global Enterprise Model approach will help drive best-in-class operating performance for NBCUI’s finance and accounting functions.”

Key finance and accounting services that Capgemini intends to provide to NBCUI include Procure-to-Pay (P2P), Order-to-Cash (O2C) and Record-to-Analyse (R2A). In addition, the implementation of new command centre capabilities will help provide NBCUI with clear insights into its finance and accounting activities.

Financial Services Industry “Out of Step With FCA Phone Regulations”
Global ComplianceRegulation

Financial Services Industry “Out of Step With FCA Phone Regulations”

UK Financial Services companies are still struggling to comply with Financial Conduct Authority regulations which require them to record mobile phone conversations, a new report from analyst firm Ovum has found.

Research from call compliance specialist TeleWare, who sponsored the paper, estimates that as many as 45,000 mobile devices are at risk of non-compliance. This is far higher than the 25,000 often cited by the industry.

In 2012, TeleWare found that almost half of UK organisations didn’t have a fully compliant solution in place. This new report has found that two years down the line, non-compliance is still an issue and that the majority of impacted businesses continue to operate without effective measures in place.

A large number of organisations rely on simply imposing policies to prevent use of mobile devices for conversations which would fall under the regulations, but this approach is largely ineffectual, Ovum argues.

Steve Haworth, CEO of TeleWare, said: “This approach may be technically compliant, but is short-termist at best and unworkable at scale. Technical solutions, rather than policies, provide the most effective method of ensuring compliance without hamstringing employees.”

The exact scope of the regulation – including which companies are implicated and which of their operations and activities on mobile devices need to be recorded – has caused much confusion, despite the regulation coming into force in 2011.

“Some firms still believe they are altogether exempt and as a result are making no effort to comply. What is clear, however, is that all asset classes and instruments are included in the regulation, as are all sizes of buy- and sell-side firms. As for what needs to be recorded, the original wording states that ‘any relevant conversation’ should be recorded and stored, which is an extensive and highly inclusive statement”, added Rik Turner, senior analyst at Ovum.

Businesses Demand More from Legal Teams
LegalRegulation

Businesses Demand More from Legal Teams

A rising level of threats to business, and increasing numbers of regulatory requirements, are combining to ensure in-house general counsel are no longer focused solely on company legal matters. Instead, a new report from KPMG reveals that in-house lawyers’ work is dominated by commercial decision making as boardrooms seek validation of their business and operational plans.

The report, which is based on a series of in-depth interviews with general counsel, reveals that senior in-house lawyers have adopted six new core functional responsibilities, in addition to their role as legal advisers. Chief amongst these is a focus on cyber security, as concerns rise about the risk of data breaches brought about by human error and intentional sabotage.

Malcolm Marshall, global head of cyber security at KPMG, said: “In the last five years we’ve seen cyber security move from the back room to the board room and, in extreme cases, the court room. Against this sort of backdrop few people will be surprised to see it come in as the fastest growing risk for general counsel and that’s why in-house legal teams should have a seat at the table providing advice about the policies and vigilance required to tackle cyber risks for business.”

In addition to the new focus on cyber security, the report highlights that general counsel are now expected to manage:

• enterprise risks, such as geo-political events or technological failures

• a rising tide of regulation as the ‘new regulatory norm’ increases global compliance demands

• corporate liability for the conduct of third-parties

• execution of contracts, in addition to long-held expectations around the negotiation and drafting of contracts

• flexible approaches to dispute resolution, rather than an outright reliance on negotiation.

KPMG’s analysis goes on to reveal that there is a growing demand for in-house lawyers to conduct due diligence of suppliers, customers and other business parties, as corruption through the supply chain is tackled through increasingly tough legislative and judicial actions. According to the report, senior executives are also turning to their legal teams in recognition that their professional training ensures general counsel can ‘take on complex issues, distil them and arrive at a sensible conclusion’ with many respondents indicating that their lawyers are more likely to find solutions to common business problems, than colleagues in other business departments.

Strong Case for Investing in Staff Health
Corporate GovernanceRegulation

Strong Case for Investing in Staff Health

There are clear business benefits to supporting employee health and wellbeing, says a new CBI and Medicash report. The UK’s leading business group has outlined how improving employee health can contribute to better business performance through lower absence, higher productivity and better employee engagement.

The direct costs of employee absence to the economy are estimated at over £14 billion per year – and the CBI’s latest absence survey found that the average total cost to business for each absent employee is £975. These figures would be higher still if productivity lost due to presenteeism—staff attending work despite being unwell—was included as well.

Neil Carberry, CBI Director for Employment and Skills, said: “Having healthy staff is an essential part of running a healthy business. Investing in the wellbeing of employees is not only the right thing to do, it has real business benefits.

“It’s time for businesses and government to work hand-in-hand to move from a reactive to proactive approach on health and wellbeing in the workplace. Encouraging investment that gets people back to work sooner, with less of a burden on the NHS, is in everybody’s interest.”

Sue Weir, CEO of Medicash, said: “Developing and implementing a targeted healthcare strategy can help business avoid costly absenteeism and ensure their workforce is a happy, healthy and committed one. That’s why more and more businesses looking to increase output and maximise business performance are putting into place robust health and wellbeing strategies.

“Offering a health and wellbeing package is an affordable and beneficial means of doing this and of attracting, motivating, rewarding and retaining staff.”

Reducing Red Tape in Business Would Boost Greek Productivity – OECD
Global ComplianceRegulation

Reducing Red Tape in Business Would Boost Greek Productivity – OECD

Greece could save its businesses hundreds of millions of euros a year and improve their competitiveness by reducing administrative burdens, according to a new Organisation for Economic Co-operation and Development (OECD) report.

Measurement and Reduction of Administrative Burdens in Greece: An Overview of 13 Sectors identifies 3.3 billion euros worth of burdensome regulations weighing on businesses each year and says a quarter of these could be eliminated. Around three-quarters of the costs relate to company law, tax administration and public procurement.

Greece has worked to strengthen its public finances and restore competitiveness as it emerges from a deep crisis, but it needs now to reduce the layers of administrative requirements on businesses to support economic growth and jobs, the report says.

“This report takes a careful look at what it is costing Greek businesses to comply with rules and regulations which in many cases are unnecessary,” said OECD Deputy Chief of Staff Luiz de Mello, presenting the report in Athens. “Cutting some of this red tape would enable companies to spend less on administration and more on doing business.”

The report makes 87 recommendations for cutting down paperwork in 13 areas, including energy, telecommunications and fisheries. Many involve eliminating obligations to submit several paper copies of a document or dossier to different public authorities.

The 87 specific recommendations include:

• Setting a turnover threshold of 10,000 euros below which companies do not have to submit receipts to register value-added tax payments.

• Reducing the legal requirements on publishing annual financial statements.

• Allowing farmers simpler and faster access to European Union development aid, rather than a cumbersome existing system that uses intermediaries.

• Increasing the use of framework agreements in public procurement across all sectors, to make it simpler to draw up specific contracts.

• Simplifying annual leave records that need to be kept by employers.

• Enabling environment permits to be submitted and tracked online rather than via reports in paper form.

Towers Watson Launches Global Benefit Solution
Corporate GovernanceRegulation

Towers Watson Launches Global Benefit Solution

Global professional services company Towers Watson has announced the launch of a simplified global benefit solution designed for the multinational marketplace. The offering, Global Access, allows multinational employers to deliver local-country, pre-packaged benefit programs that include life, accident, health and disability, with three fixed, benchmarked benefit levels.

Developed in conjunction with leading global insurance carriers and designed around Towers Watson’s Benefits Data Source survey data, Global Access is aimed at employee populations where customization is not required in benefit design, and is available in more than 30 countries around the world (except for North America).

“Multinational companies often struggle with delivering quality employee benefit programs due to insufficient local-country HR functions and little or no availability of local benchmarking data on employee benefit packages,” said Cecil Hemingway, leader of Towers Watson’s Global Health and Group Benefits practice.

Hemingway continued, “Global Access addresses these challenges head on. We’ve developed a first-of-its-kind, alternative benefit solution that provides employers with the simplicity of a fully benchmarked ‘off the shelf’ product that can be implemented within days, while also reducing costs and workload.”

For employee populations where no customization of benefit design is required, the offering replaces the need for employers to either negotiate or place policies directly with insurance carriers, or having to retain a local broker to do so. In addition, Global Access has very low minimum head count requirements for coverage, enhanced underwriting features that include higher guaranteed issue or free cover limits, and removal of pre-existing condition requirements for members who have been previously insured.

“Global Access improves transparency and control of local plans and vendors for multinational corporations at corporate and regional levels, and is fully compliant at a local-country level,” said Francis Coleman, director, International Consulting Group, Towers Watson. “It’s also easy to operate and offers centrally managed renewals.”

Pay Awards Remain Muted and Below Inflation Over 2014
Corporate GovernanceRegulation

Pay Awards Remain Muted and Below Inflation Over 2014

Annual pay rises are delivering a median 2.5% increase according to analysis, by UK online HR resource XpertHR, of 215 pay settlements effective in the three months to the end of March 2014. This figure matches the 2.5% retail prices index (RPI) inflation figure for March 2014. Over 2013 as a whole pay settlements were worth a median 2%, while RPI stood at 2.7%.

RPI is the inflation measure most commonly used by employees and employers to gauge the value of any pay increase. Consumer prices index (RPI) inflation (the Government’s targeted measure) is used less often by employers – and rarely by employees as it excludes housing costs.

Over 2014 as a whole, pay settlements are forecast by XpertHR to be worth 2.5% for private-sector employees, while many public sector employees will receive an average 1% rise. Inflation over the year is expected by economists to average 2.8%. On the RPI measure, pay awards have been worth less than inflation since December 2009, and 2014 is set to lead to a record fifth year of wages falling in real terms.

Key findings for pay awards in the three months to the end of March 2014 include that the median pay award stands at 2.5%, the middle half of deals fall between 2.0% and 2.8% and less than one pay award in every 10 (8.2%) is a pay freeze.

XpertHR Pay and Benefits editor Sheila Attwood said: “We are yet to see a return to real terms wages growth. Pay settlement levels remain subdued – at just 1% on average in the public sector, and 2.5% in the private sector – and an early indication of pay awards concluding in April shows that this level of awards is likely to persist. Over 2014 as a whole pay settlements are likely to fall below RPI inflation.”

U.S. Court of Appeal Rules in Favour of Terminated Chrysler Dealers
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U.S. Court of Appeal Rules in Favour of Terminated Chrysler Dealers

A U.S. Court of Appeal has ruled in favour of scores of Chrysler dealers who were terminated during Chrysler’s 2009 bankruptcy, holding that the U.S. government may have violated the 5th Amendment.

In June 2009, Chrysler terminated 789 dealers as part of its bankruptcy reorganization process. The dealers, many of whom had been with the manufacturer for generations, were given just 22 days to cease all business operations, leaving many of them with heavy financial obligations, such as mortgages or leases, that could not be met. The terminations were part of the 2008 Troubled Asset Relief Program (TARP), where the U.S. provided Chrysler with $12.5 billion in financial assistance. The dealers were paid nothing for the loss of their businesses.

In three companion lawsuits filed in Washington D.C., nearly 200 terminated dealers are claiming that the U.S. violated the Takings Clause of the 5th Amendment by conditioning the receipt of TARP funds on Chrysler terminating the dealers.

The theory was immediately challenged by the U.S., who claimed that it was Chrysler, not the U.S., that terminated the dealers; that the franchises were not “property” that could be taken; and that the U.S. is insulated from liability because the terminations were done by the bankruptcy court. The trial judge rejected these arguments, leading to an appeal before the U.S. Court of Appeal.

In a 29-page unanimous opinion, the Court of Appeal on April 7th agreed with the trial judge that these events could give rise to a violation of the 5th Amendment. The court indicated that the dealers may be making new law, stating that “the facts of this case are unique and raise issues that have not been decided before.” The court then remanded the case to the trial court to give the dealers an opportunity to plead and prove their allegations that the U.S. coerced Chrysler into terminating the dealers. The U.S. has 90 days from the date of the decision to petition the U.S. Supreme Court for review.

“This is a day that should be celebrated by the dealers, their families, and the population at large,” said Jonathan Michaels of Michaels Law Group, the attorney for the dealers. “There can be nothing more un-American than the government orchestrating the taking of your livelihood on 22 days’ notice, and then disavowing any responsibility for having done so,” said Michaels. “Now, those dealers – those families – have an opportunity to be heard. This is a win for every business owner in America.”

Microsoft and Disney among US “Best Corporate Citizens”
Corporate GovernanceRegulation

Microsoft and Disney among US “Best Corporate Citizens”

Corporate Responsibility Magazine has announced its 15th annual 100 Best Corporate Citizens List, recognizing the standout performance of public companies across the United States.

The list, which was first published in 1999 by Business Ethics Magazine, documents 298 data points of disclosure and performance measures, harvested from publicly available information, such as websites and sustainability reports, in seven categories: environment, climate change, employee relations, human rights, governance, finance, and philanthropy.

There are 23 companies on the 2014 list that were not on the 2013 list, with 17 companies having been on the list every year since 2008.

Pharmaceutical company Bristol-Myers Squibb topped the list, despite receiving a “yellow card” caution from the magazine due to ongoing mass-tort litigation relating to allegations that toxic chemicals contaminated a company site in New Brunswick, New Jersey and caused personal injuries to residents of the neighbourhoods surrounding the facility.

Johnson & Johnson and Gap Inc. took second and third places respectively, with Microsoft Corporation, Intel Corp. and Walt Disney Co. also featuring in the top 10.

“We’re pleased to honour the 100 Best Corporate Citizens for meeting the highest commitment to the programming and transparency necessary to lead the business community in the area of responsible corporate practices,” said Bill Hatton, Editor-in-Chief of CR Magazine.

“CR Magazine’s 100 Best Corporate Citizens is the only ranking that doesn’t rely on self-reporting,” said Elliot Clark, CEO of CR Magazine. “Each year, we measure the most transparent companies who report on their responsible practices. We congratulate those honoured on this year’s 100 Best Corporate Citizens List for their commitment to corporate responsibility.”

Carter Backer Winter Launches New Corporate Finance Team
AccountancyRegulation

Carter Backer Winter Launches New Corporate Finance Team

Mid-tier accountancy firm Carter Backer Winter LLP has appointed Odhran Dodd, formerly a Partner at UHY Hacker Young LLP to head its new Corporate Finance department.

Dodd has 15 years’ experience in investment banking, having completed over 60 deals in a wide variety of sectors from recruitment, manufacturing, financial services, transportation, oil and gas, mining and renewables.
His expertise is focused on disposal of owner managed businesses, MBOs/MBIs and fundraising. He brings to CBW a wealth of connections with lending banks and alternative capital providers as well as Nomads, brokers, trading houses, financial PR companies and lawyers.

“I relish the challenge of heading and establishing a brand new Corporate Finance department at CBW,” said Dodd. “I believe that the post-recessionary market is fast gaining momentum and creating new opportunities for both established companies and those ready to test new waters. I expect the CBW Corporate Finance team to grow fast since there is a lot of funding available for deals and the environment is very positive for corporate expansion. We will have the expertise to help our clients harness this growth.”

Peter Winter, Managing Partner at CBW, said: “Our ambition has always been for CBW to be a full service firm but for a long time the sluggish nature of the market meant adding a Corporate Finance team to our practice was not practical. Now, however, with the economy on an upward turn and businesses feeling more bullish about their future, we are delighted to be able to appoint Odhran who will be responsible for helping CBW’s existing clients as well as drawing new projects from elsewhere in the market.”

Government Legal Aid Reform “Could Cost Creditors More Than £150m per Year”
LegalRegulation

Government Legal Aid Reform “Could Cost Creditors More Than £150m per Year”

Creditors face losing more than £150m per year if the Government follows through with plans to end an exemption for insolvency litigation from the ‘Jackson’ legal aid reforms, warns an independent report commissioned by the insolvency profession.

Insolvency practitioners regularly need to take legal action to reclaim money from directors of insolvent businesses, or third parties, that should be re-directed to creditors – including HMRC and SMEs. Where there is no money left in an insolvent business to pay for legal fees, often the only way to fund legal action is to recover costs from the director in a successful case.

Insolvency litigation currently has an exemption from the Jackson reforms, introduced in 2013. The reforms prevent costs from being fully recovered from defendants. Ministers plan to scrap insolvency litigation’s exemption in April 2015.

Without the ability to recover costs fully from a director, insolvency practitioners fear legal action to reclaim debts from directors would be unaffordable in most cases, leaving money in the hands of unscrupulous directors and out of creditors’ reach.

The Government’s plans would affect creditors’ claims of up to £300m which are pursued through the courts every year – including the pursuit of up to £70m that belongs to taxpayers and HMRC. Approximately £160m is brought back to creditors every year, an amount that insolvency practitioners say is rising.

Phillip Sykes, deputy vice-president of R3, the trade body for insolvency professionals, said: “Insolvency litigation is absolutely in the public interest, and it is absurd that the Government is considering making it all but impossible for such cases to continue. The ‘Jackson’ reforms were supposed to protect exactly this type of case.

“The Government’s only justification for ending the exemption is that it would make the ‘Jackson’ reforms consistent across the board, regardless of the consequences. It’s just lazy thinking.”

Sykes added: “Insolvency litigation returns money to creditors, and helps ensure businesses and banks remain confident about lending. It protects taxpayer funds, it stops directors making off with money that isn’t theirs, and it deters directors from even thinking about doing so in the first place.

“Should the exemption be removed, only a few large cases involving wealthy, motivated creditors would go ahead. SMEs and taxpayers would lose out – and irresponsible directors would be laughing.”

My Learned Friend Launches Crowdsourced Platform
LegalRegulation

My Learned Friend Launches Crowdsourced Platform

My Learned Friend provides the ability for users to search for basic legal research information on an enquiry specific basis, then rate, comment on and add to the knowledge base for the benefit of the wider legal community.

The cloud based platform will also provide the opportunity for sector specific discussion forums and a live email notification service, so users know when an area they are interested in has been updated.

Compatible with tablets and smartphones, My Learned Friend is accessible via an easy online sign up process and will attribute credit to contributors via dedicated profiles, allowing them to build their reputation rating and contact list.

Managing Director of My Learned Friend, Rick Yates said: “The way that lawyers seek research information has changed. People want quick access to key information, often on an enquiry specific basis. They want the assurance that other professionals view that information as relevant, and even the opportunity to weigh in on its usefulness. MLF allows us to create a useful legal community that has value and relevance for practicing lawyers, as well as a real life legal knowledge pool for students and trainees.”

Content submitted on My Learned Friend will be moderated by users, with useful information being promoted using a ‘Thumbs Up’ rating system, and ‘Useful/Not Useful’ indicators for the use of case law or legislation in relation to specific legal enquiries. The site currently has research categories for 22 legal disciplines and holds case law and legislation for approximately 3000 legal enquiries.

MLF hits the market this week with the option for a one-month free trial. Subscription fees will be £9.99 a month for professionals and £5 a month for students, with no contract period. There is also a reduced fee for corporate subscriptions for businesses in need of five or more accounts.

To find out more visit www.mylearnedfriend.co.uk.

Criminal Tax Cases Shifted onto the Taxpayer HMRC
LegalRegulation

Criminal Tax Cases Shifted onto the Taxpayer HMRC

Phil Berwick, partner* and Head of Contentious Tax at law firm Irwin Mitchell, comments:  “The proposal represents a fundamental shift in the burden of proof. As the Government seeks to plug financial gaps from previous failed initiatives, it is becoming more desperate. Not everybody who has failed to declare foreign income has done so deliberately. There is a danger that HMRC will focus on “soft” targets, and hardcore evaders will still evade capture or punishment. There is also the danger that the new rules will subsequently be extended to change the burden of proof in other situations.

“The UK- Swiss Agreement raised a pitiful amount compared to what was estimated by the Government, and the Liechtenstein Disclosure Facility is on course to also fall woefully short of the £3 billion estimated.

“There is already a maximum penalty of 200% of the tax that has not been paid, in addition to interest and tax for up to 20 years, for taxpayers with undeclared foreign income.

“This latest announcement follows on from the news that HMRC will have the power to raid taxpayers’ bank accounts. Because HMRC has failed to prosecute a sufficient number of offenders, the Government is seeking to change the rules to make it easier to meet targets, and prevent further embarrassment.

“HMRC has had a significant amount of data on offshore offenders for a long time, but has failed to pursue criminal investigations. HMRC already has sufficient powers to pursue these taxpayers. Where will HMRC’s quest for increased powers end?

Chancellor George Osborne has announced plans to give new powers to HM Revenue and Customs to make it easier to prosecute people who evade taxes by hiding money offshore. The intention is that criminal prosecutions can be brought against anyone with undeclared foreign income, even if they did not intend to evade taxes. HMRC have come under attack from MPs for the low number of evader it prosecutes.

HRMC will consult on new penalties for offshore tax evasion, and a document will be published on Monday.

British Accountants to Develop Expertise in Africa and Asia
AccountancyRegulation

British Accountants to Develop Expertise in Africa and Asia

Teams of British accountants will help transform accounting standards and develop professional accountancy institutes in Africa and Asia, International Development Secretary Justine Greening has announced.

The UK will deploy staff from chartered accountancy institutes to developing countries such as Zambia, Nigeria and Ethiopia to improve their financial management and investment climates by sharing British expertise and international best practice.

Announced following a round-table meeting at DFID today, the Department also committed £4.5 million to the International Federation of Accountants to help up to 10 partner countries in Africa and Asia, develop international-standard professional accountancy institutes of their own.

Justine Greening, International Development Secretary said: “The UK’s financial sector is second to none and its skills and experience can boost development across the world.

“By helping developing countries to manage their own resources better and attract investment we can create the jobs and growth needed to lift people out of poverty.”

The first deployments of chartered accountants through DFID’s Investment Facility for Utilising Specialist Expertise will begin in May 2014. They will include teams from:

– The Association of Chartered Certified Accountants (ACCA) who will train the Ethiopian Ministry of Education in accountancy practice. Overtime, this training will ensure more officials are trained in international professional standards.

– The Institute of Chartered Accountants England and Wales (ICAEW) who will review Zambia’s audit regulation to ensure it complies with latest international accounting systems; and

– The Chartered Institute of Public Finance and Accountancy (CIPFA) who will train several government bodies in Nigeria to stop corruption in government procurement.

On request from DFID partner countries, teams are deployed on short term assignments to support efforts to improve financial management in both the public and private sector.

Fayez Choudhury, Chief Executive of IFAC said: “IFAC has a long history of working to build capacity and strengthen PAOs as part of our public interest mission, and we are delighted about this significant next step in that journey.

“Well-functioning PAOs ensure a sustainable supply of professional accountants that support high-quality accounting practices and financial information in both the public and private sectors. They support enhanced confidence in business and transparency in use of public funds, giving rise to increased foreign investment and donor funding and improved government accountability and transparency – and therefore are essential to economic growth and stability.”

HMRC Unable To Disclose Number Of Civil Fraud Investigations
LegalRegulation

HMRC Unable To Disclose Number Of Civil Fraud Investigations


A HMRC facility which encourages people who have committed tax fraud to admit their offences in exchange for avoiding a criminal investigation has attracted 129 requests from individuals since it launched at the beginning of 2012.

Although the figures, which were obtained from HMRC by law firm Irwin Mitchell using the Freedom of Information Act, are equivalent to more than one request a week, a tax investigations expert at the national law firm says that there is a lack of transparency about the scheme in relation to whether taxpayers are receiving the protection that they are looking for.

HMRC has been unable to disclose how many taxpayers were accepted into the process, and how many were subject to criminal investigation, despite making a voluntary approach to the taxman. HMRC is also unable to disclose the number of cases it has registered under the Contractual Disclosure Facility (CDF), because it appears that this information is not recorded centrally.

Established on 31 January 2012, the CDF enables a taxpayer to admit to fraud in exchange for immunity from prosecution, providing certain conditions are met. The process can either be initiated by HMRC, or a taxpayer can voluntarily ask to be admitted into the facility.

Up until now, HMRC has not published details of how many individuals have made requests. Following Irwin Mitchell’s request, it has been revealed that 65 people approached HMRC to enter the CDF from 31 January 2012 to 31 January 2013, and 64 between 1st February 2013 and 31st December 2013.

Phil Berwick, partner* at law firm Irwin Mitchell, said: “It must be a concern for HMRC that only, on average, six taxpayers a month are coming forward voluntarily to admit fraud. It may be that taxpayers are using other methods to disclose their irregularities, but the numbers registering for the Liechtenstein Disclosure Facility (LDF) – the obvious alternative – are on the decline.

“I can understand that HMRC does not want to guarantee a taxpayer that they will be allowed to use the process, and that HMRC may decide to pursue a criminal investigation, but it does not make sense to withhold the historic data.

“It is a surprise, and a concern, that HMRC can’t provide the number of fraud cases they are investigating using the Contractual Disclosure Facility. They are constantly banging the drum that they will come down hard on tax evaders. The Contractual Disclosure Facility is only one weapon in HMRC’s armoury, but it can’t be hard to record this information, and you would think that HMRC would want to know the number of fraud cases it is investigating.

“There will be concern among those who pay their taxes that HMRC is not able to establish how many cases they are pursuing using their civil fraud process.

“In many cases, I suspect that taxpayers seeking immunity from criminal investigation for fraud by using the Contractual Disclosure Facility are missing a trick, as they could use the Liechtenstein Disclosure Facility and get a better result.”

Phil Berwick added: “Despite HMRC’s various campaigns, the figures that have been released suggest that taxpayers who have committed fraud are not coming forward voluntarily, and are waiting for the taxman to find them. HMRC’s inability to provide the number of civil fraud cases it is investigating will only reinforce that belief.”

Launched by HMRC in 2009, the LDF allows taxpayers with unpaid tax to settle their liability with HMRC whilst avoiding a criminal investigation. In most circumstance, this is on very favourable terms when compared to using the normal rules. In some cases the HMRC foregoes some of the tax that is due and the penalty applied is usually lower than the amount charged outside the facility. The LDF closes to new registrations on 5 April 2016.

Crossroads Systems Regains NASDAQ Compliance
Global ComplianceRegulation

Crossroads Systems Regains NASDAQ Compliance

Crossroads Systems, a global provider of data protection solutions, has announced that it has received notice from The NASDAQ Stock Market that it has regained compliance with Listing Rule 5550(b)(1), which requires companies listed on The NASDAQ Capital Market to maintain stockholders’ equity of at least US$2.5m.

As a result, the Company’s pending hearing before the NASDAQ Listing Qualifications Panel has been cancelled. NASDAQ has determined that the Company has regained compliance with all applicable listing standards to maintain the listing of its common stock on The NASDAQ Capital Market.

About Crossroads Systems

Crossroads Systems, Inc. (NASDAQ: CRDS) is a global provider of data archive solutions. Through the innovative use of new technologies, Crossroads delivers customer-driven solutions that enable proactive data security, advanced data archiving, optimised performance and significant cost-savings. Founded in 1996 and headquartered in Austin, TX, Crossroads has been awarded more than 100 patents and has been honored with numerous industry awards for data archiving, storage and protection.

FCA Takes Control of Consumer Credit
Corporate GovernanceRegulation

FCA Takes Control of Consumer Credit

“When the FCA assumes responsibility for the consumer credit market on April 1st it will immediately find itself in conflict with the operating standards of many firms within the industry.

“The relatively relaxed regulatory environment under the OFT has led to a situation where companies haven’t been incentivised to develop the internal processes they will need in the tightly controlled financial services industry.

“For many of the affected firms, the problem is simply one of business practices. The short term, small-scale nature of these businesses has been reflected in the company culture meaning more long-term principles – for example, ensuring credit is affordable for the borrower through Know Your Customer (KYC) and Treating Customers Fairly (TCF) – have been pushed to one side.

“The positive here is that these principles can be restored relatively quickly by building an effective network of processes, which record the necessary data and make it available in the form of Management Information (MI). This MI can then easily be reviewed for the purposes of regulatory compliance, but equally as importantly it can be monitored by management for troubleshooting and strategic business improvements. Effective control of these processes can then be used to reinforce cultural change, one of the pillars of the FCA’s TCF.

“Regulation doesn’t have to be a burden. When managed properly the changes forced by the new regulation can be leveraged for competitive gain, a fact that will be highlighted by the industry shake-up that the FCA will no doubt trigger.”

Ethics Crisis as Managers Stop Caring
Corporate GovernanceRegulation

Ethics Crisis as Managers Stop Caring

Title Here

Too many managers are robotically following rules rather than making decisions with their hearts and minds, according to new research published today by CMI (the Chartered Management Institute)
and MoralDNA.

It warns that workplace cultures dominated by rules, bureaucracy and targets mean that managers are switching off their sense of care for others.

The report, managers and their MoralDNA, follows City scandals over mis-sold debt, PPI and rate fixing, plus crises in the NHS and the police, damaging public trust and employee engagement alike. It finds that 74% of managers are at risk of overlooking the impact of their decisions at work on others – 28% more than among the general population.

The report shows that the general population can be divided almost equally into six different ethical character types – Philosophers, Judges, Angels, Teachers, Enforcers and Guardians – according to how far their approach to ethical matters is driven by their hearts, heads or compliance with rules. Analysis of managers’ morals revealed marked differences, with higher numbers of Enforcers, Judges and Philosophers (74%) and much smaller proportions of Angels, Teachers and Guardians (25%).

As a result, there are significantly more (28%) people in management roles who may lack empathy when making decisions and fail to consider the impact of their choices on the wellbeing and interests of customers, colleagues or shareholders. Conversely, there are less than half as many managers in the Angels and Teachers categories – which have a stronger ethic of care – than among the general population (14% of managers compared to 36% of the
general population).

The situation is exacerbated by an over-representation of Enforcers (22% of managers compared to 15% in the general population). This ethical character type, which tends to remind everyone else about their duty to obey regulations, can be particularly guilty of blindly following rules and can lose sight of the principles behind their actions.

The research also shows managers’ moral mindsets change significantly as soon as they are in a working environment. Compared to their personal lives, they become 4% more likely to blindly follow rules and 5% less likely to consider the wellbeing of others when making decisions.

Ann Francke, Chief Executive of CMI, said: “Too many employers fall into the trap of relying on ever-more complicated layers of rules and regulations to say what their people can and can’t do. The result is that people act like robots at work, using the letter of the law as an excuse not to engage their hearts and heads when making decisions. We need to stop blindly following rules and start caring about the impact our actions.

“To be successful, organisations have to meet the needs of their customers, employees and stakeholders. If the values and behaviours of those managing and leading organisations are out of kilter with those groups, they won’t be run in a way that properly serves customers and stakeholders or gets the best out of employees. In short, they’re destined
to fail.”

Professor Roger Steare, co-author of the report added: “MoralDNA has already persuaded the Financial Conduct Authority that a one dimensional, rules-based approach to corporate conduct has spectacularly failed in banking regulation. They have acknowledged that we all need to engage our heads and our hearts if we want to make better decisions and outcomes for our society. This report is a wake-up call to government and all regulators to understand that turning the UK into a totalitarian police-state will lead to more and not less wrong-doing. Right-wing politicians will agree with this small state philosophy. Left-wing politicians will agree with the emphasis that this places on our ethic
of care.”

The new research demonstrates significant links between ethical behaviour and different aspects of our humanity, including age, religion, politics and gender:

The older we get, the less robotic our decision-making becomes, both at home and at work – compliance drops 27% between people’s late twenties and retirement ageA belief in any religion makes a manager more likely to act ethically both at work and at homeCompliance is higher in managers with right-leaning political viewpoints than left leaningFemale managers score 5% higher in the ethic of care than their male counterparts.

Ann Francke continues: “These findings are another reminder of the benefits of having real diversity in management teams. Everyone has different ethics and the risk of ‘group think’ is reduced if organisations involve people with different experiences and perspectives in making decisions.”

CMI is supporting managers with tips for using their hearts as well as heads when making decisions at work.

CMI’s recommendations include:

1. Ask yourself the RIGHT questions to negotiate ethical quandaries:

  • – What are the relevant rules?
  • – Are we acting with Integrity?
    – Who is this good for?
    – Who could it harm?
    – Would we be happy if the truth was public – how open, honest and accountable are we being?

2. Step back. Create space for yourself to reflect on the ethical implications of decisions.

3. Stand up for what you believe in. Be authentic and be yourself. If you see something you do not agree with, speak up and challenge it.

4. Be professional. Use your professional body’s standards of practice as a reference point if you’re unsure, like CMI’s Code of Practice for Professional Managers – www.managers.org.uk/code

5. Engage and empower employees. Give staff more autonomy and devolve responsibility to them. Where employees can make decisions for themselves they are far more likely to start thinking for themselves about the impact of their actions on others.

CMI is offering managers a toolkit including practical checklists to help them improve ethical standards in their organisations. Plus, managers and non-managers can now test their ethics through the MoralDNA tool – and invite feedback from their Facebook friends about their moral mindsets using MoralDNA’s new 360-degree version. Find out more at www.managers.org.uk/ethical-toolkit.

Traditional Broker/Dealers Adding Direct Platforms
AccountancyRegulation

Traditional Broker/Dealers Adding Direct Platforms

 

New research from global analytics firm Cerulli Associates finds that traditional broker/dealers are considering a direct model.

“Firms within traditional advisory channels are beginning to consider direct broker/dealers as legitimate competitors and adapting their business models accordingly,” states Patrick Newcomb, senior analyst at Cerulli. “There are several benefits to launching a direct platform at a traditional broker/dealer, including creating a funnel for younger advisors that need help prospecting new clients, and to help advisors cultivate younger clients with small account balances.”

The first quarter issue of The Cerulli Edge-Managed Accounts Edition analyzes direct providers and eRIAs including the impact of the direct channel on traditional broker/dealers.

“Many traditional firms already maintain a packaged mutual fund advisory (MFA) program,” Newcomb explains. “MFAs make up the largest assets within the direct channel, and many broker/dealers have an existing MFA program.”

Cerulli warns that firms outside of the direct channel need to tread carefully when entering the direct space. If positioned incorrectly, it could appear that the home office is trying to compete with its advisors, instead of offering them an additional service.

Clinical Research Global Compliance Just Got Easier
Global ComplianceRegulation

Clinical Research Global Compliance Just Got Easier

Provision offers global consultancy services for the development and implementation of Good Clinical Practice (GCP) and Human Research Protection (HRP) procedural standards and programs for the conduct of clinical
research studies.

“There has never been a collaboration of GCP and HRP industry leaders specifically focused on meeting the compliance needs of research institutions around the world,” said Schulman Associates IRB President, Chief Executive Officer and Institutional Official Michael Woods. “Provision makes it easier for institutions to achieve their compliance goals and to engage in global development programs. It also helps study sponsors follow a simpler path to consistent compliance practices across a global network of research institutions. Global compliance just
got easier.”

Today, clinical trials are global, involving potentially hundreds of sites in a dozen or more countries. Pharmaceutical, biopharmaceutical and medical device sponsors need consistent quality and ethical standards for human subject protection and compliance to minimise regulatory risk.

Consistency is key to making a clinical trial as meaningful as possible, and the data as useful as possible. Meeting global compliance standards has been challenging because of outsourcing and the increasing complexity of the research. The approach to global compliance has often been very fragmented, and Provision offers a more comprehensive solution to achieving global compliance standards.

Enhanced Compliance for Integrity and Quality

The pharmaceutical, biopharmaceutical and medical device industries rely heavily on third parties to assist in the advancement of clinical research programs. Global contract research organizations (CROs) provide fundamental services for protocol development, study conduct, clinical program management, pharmacovigilance and data management, all directed to regulatory submissions and product approvals. Academic research institutions in locations around the world are responsible for study conduct and subject recruitment, according to the protocol as well as International Conference on Harmonisation (ICH) GCP standards and guidelines.

While there are regulations and local customs unique to countries and regions around the world, research institutions still strive to conduct research consistent with ICH GCP standards. An alignment of GCP and HRP practices provides the essential regulatory compliance and significantly improves performance of clinical studies.

Experienced Research Compliance Leaders

While Provision Research Compliance Services is new, the two organizations behind Provision are industry leaders, with proven expertise in clinical quality assurance and human research protection.

Provision provides services that combine the extensive GCP quality assurance expertise of Falcon Consulting Group with the HRP expertise of Schulman Associates IRB. This new joint venture provides comprehensive solutions to improve overall quality standards for clinical studies and data integrity, and maximizes the protection of human research subjects. Provision’s services are available in more than 30 countries.

By improving GCP quality assurance and human research protection programs, clinical study data becomes more reliable and human subject protection is strengthened. This leads to more compliant submissions and more rapid approvals for patient therapies.

Regulatory Change Slowing Growth
Corporate GovernanceRegulation

Regulatory Change Slowing Growth

 

New research from one of the world’s leading software and technology services companies has highlighted how regulatory change is second only to market volatility as an executive issue for financial services firms.

According to a survey, carried out by SunGard, with many new regulations taking effect during the course of 2014, in some cases it is even considered the number one strategic risk.

Senior executives are now concerned that regulatory change is distracting attention from core business activities and potentially hindering companies’ ability to grow.

Adapting to new regulations is also causing financial services firms to rethink their approach to compliance and restructure their organizations accordingly. Many, however, still do not feel ready for the changes taking effect
this year.

Key findings of the survey include:

Regulation is high on the executive agenda

• The pressure of dealing with change has expanded beyond compliance departments into the C-suite. One in two respondents warns that dealing with regulatory change has impacted shareholder returns and the ability to invest for the future.

• Almost half of respondents describe themselves as “highly stressed” by the current pressure of regulatory change, with little prospect of imminent improvement.

• The broad nature of regulatory change is driving a more cross-functional response within businesses. Best-in-class institutions are breaking through siloes, allowing for a more efficient response to the issue.

Despite ongoing efforts, readiness levels remain relatively low

• Only one in two companies say they are highly ready for the regulatory changes that they must confront throughout 2014 and 2015.

• Financial services firms plan to continue investing heavily in technology, people and processes over the next two years to cope with regulatory change.

Firms are starting to move beyond checking the box

• While recognizing the benefits of a culture change to compliance, forty percent of respondents are finding it challenging to move beyond a checking the box approach.

• Despite concerns that the degree of regulatory change is overblown, most firms responded in the survey that they accept the need for change and are moving along with their responses to new regulations.

Jeffrey Wallis, managing partner and president of SunGard Consulting Services, said: “The definition of what regulators are becoming concerned about is broadening to include areas such as operational risk, adding extra strain to the financial services industry.

“Our survey demonstrates that executives at the highest levels are struggling to marry ensuring regulatory readiness with maintaining a focus on day-to-day operations. In our work with firms on regulatory compliance, we see the most success when a business takes a combined approach to the twin challenges of growth and compliance.”

Sang Lee, managing partner, Aite Group, added: “Regulatory reform is putting the financial services industry under intense pressure, and the situation will not change in the near future.

“This pressure is being felt all the way up to the C-suite and the board. Regulatory uncertainty has forced some companies to put off key investments in new industries and geographies at a time when they are increasing their investment in compliance across departments.

“Regulations may be putting a strain on the industry, but we are starting to see some companies use them as an opportunity to reorganize themselves along more efficient lines. These businesses will be the future leaders in
the industry.”

Weil Appoints Chris McLaughlin
LegalRegulation

Weil Appoints Chris McLaughlin

International law firm Weil, Gotshal & Manges has announced that Chris McLaughlin will join its London office as a partner in the Banking & Finance practice.

Chris, who was most recently a partner at Hogan Lovells, has extensive experience acting for banks and borrowers on the financing of cross-border private equity buyouts, European real estate acquisitions, and restructurings.

Chris’ arrival comes on the back of a period of strong growth for Weil’s London and wider European leveraged finance practice, following the recruitment of Chambers Band 1 ranked Stephen Lucas in 2011, along with Mark Donald and James Hogben in London, and Olivier Jauffret and James Clarke in Paris, over the last three years. In addition to the now 12-strong partner-led European leveraged finance group, Weil also boosted its high yield practice with the recruitment in June 2013 of Gil Strauss. His addition also follows that of financing expert Courtney Marcus, who rejoined the Firm as a partner based in the Dallas office in November.

Barry Wolf, Weil’s Executive Partner, said, “We are delighted that Chris is joining Weil to further enhance the growing European Finance practice. In a short space of time, Stephen Lucas and the London team, working with our teams in Paris, the rest of Europe and the US, have established a leading reputation for sophisticated leveraged finance work.”

London Managing Partner, Mike Francies, added, “We are one of the few firms with a Chambers Band 1 ranking in the UK both for Sponsor Finance and for Private Equity thereby offering clients the full range of European leveraged financing solutions covering loans, high yield and yankee loans. We look forward to Chris being part of the team expanding this further.”

The announcement follows a successful twelve months for the London Banking team and the office in general. The Banking team have acted on a number of deals recently including the following in 2013: European sponsor-side deals for Avista Capital and Nordic Capital on their Swiss take-private of Acino Holding; OMERS Private Equity on its £390 million acquisition of Civica, and Ontario Teachers’ Pension Plan on its acquisition of Busy Bees, and bank-side representations for the mandated lead arrangers on Advent International’s £1.16 billion public-to-private bid for Unit4 and Hellman & Friedman’s £1.5 billion buyout of Scout24; and Yankee loan sponsor financings for Charterhouse Capital Partners on its €500 million acquisition of Armacell, Advent International portfolio company Oberthur on its debt refinancing and acting for the lenders on Carlyle’s yankee loan acquisition of Chesapeake.

Weil’s London office has received a host of awards and recognition for its lawyers in the past twelve months including: retaining its Band 1 rankings for Sponsor Finance and Private Equity in Chambers UK 2014; top tier rankings in Chambers 100 and Legal 500 this year; and awards including “Most Innovative Firm in Corporate Law” at the FT Innovative Lawyers Awards Europe 2013, with standout entries and commendations in a further three categories including Finance law. With recent growth, we now have top ranked practices in Sponsor Finance, Restructuring and Fund Formation, to complement our existing top ranked Structured Finance and Private Equity practices.