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Filled Under: Financial

What is the Indian Financial Code? | Latest News & Updates at Daily News …

The Financial Sector Legislative Reforms Commission (FSLRC) was set up on March 24, 2011, for re-writing the Code to regulate the financial sector and introduce principles for financial regulation and the constitution, objectives, powers and interaction of financial agencies. Its aim was also to bring about coherence and efficacy in the financial regulatory framework.

In 2013, the commission, headed by Justice BN Srikrishna, submitted its report in two volumes, which included Analysis and Recommedation and Draft Law. The revised draft in twenty parts will strive to regulate financial agencies.

Under this Act, the Financial Sector Appellate Tribunal was established to exercise the jurisdiction, powers and authority conferred upon it.

According to the Act, the general direction and management of the financial agencies will be vested in the respective boards — the Financial Authority Board for the Financial Authority, the Reserve Bank Board for the Reserve Bank, the Redress Agency Board, with respect to the Redress Agency, the Corporation Board for the Corporation; the Council Board for the Council and the Debt Agency Board, with respect to the Debt Agency.

The Code deals with the establishment of financial agencies, establishment and structure of the tribunal, allocation and regulation of financial services.

A part of it discusses the functioning of financial agencies, such as boards of financial agencies, strength and composition of boards; decision making, advisory councils, accountability mechanisms and funding for financial agencies.

It also mentions the disposal of applications, information and inspections, investigations and offences as executive functions of financial agencies. These financial agencies also have quasi-judicial functions — administrative law, show cause notices and orders, enforcement actions, procedure for enforcement actions and penalties.

Moreover, the Code also clarifies financial consumer protection, prudential regulation, contracts, trading and market abuse, capital controls, resolution of financial service providers, financial stability and development council, development (provisions for review), public debt management agency, offences, functions, powers and duties of tribunal, miscellaneous, and schedules.

After buying the Financial Times, is Nikkei ready to speak truth to Japan’s …

The length of an apologetic bow from a Japanese executive is a pretty good gauge of his embarrassment. And the 15-second bow by disgraced Toshiba CEO Hisao Tanakawho resigned this week over a $1.2 billion accounting scandalwas a doozy.

It was only the latest uproar in corporate Japan recentlysee also the deadly safety lapses at air-bag maker Takata, a botched restructuring at Sharp, and fines for breaking sanctions at Bank of Tokyo-Mitsubishi.

All of which casts Nikkeis $1.3 billion acquisition of the Financial Times in a potentially troublesome light. The paper has a reputation for hard-hitting business coverageand it has not been shy about detailing the shortcomings of the Japanese press.

Illicit Financial Flows: Failure Is Not an Option | Bertrand Badre …

Under the weight of great expectations and the glare of television cameras, delegates gathered last week for the Third International Conference on Financing for Development in Addis Ababa.

Global leaders, civil society and private sector representatives exchanged ideas on financing the ambitious Sustainable Development Goals. The conversation represented a paradigm shift in how we think about development. UN Secretary General Ban Ki Moon spoke of a world, in which both the global population and resource constraints are growing, and consequently one in which, development finance needs a reboot.

A vital component of that reboot is helping developing countries generate and, importantly, retain domestic resources to fund programs and infrastructure. This retaining cant happen without concerted efforts to reduce illicit financial flows (IFFs). Corruption, tax evasion and money laundering are the fuel in the engine of illicit flows. They drive resources from where they are needed into the hands of a corrupt few.

The Addis Ababa Action Agenda set a clear objective: We will redouble efforts to substantially reduce IFFs by 2030, with a view to eventually eliminating them. But how do we make this happen? The World Bank Group has a role to play in this fight, but much needs to be done and we will only get there with more cooperation at an international level.

o First, it is critical to address the sources of IFFs by reducing criminal activity, corruption and tax evasion.
o Second, IFFs need to be halted to prevent illegal money from leaving the country.
o Finally, third parties – especially financial intermediaries and other service providers – need to stop accepting those assets.

To achieve this, developing countries and financial centers must collaborate to adopt and enforce policies that promote good governance, tackle corruption, go after dirty money and implement transparent tax systems. All countries must have the right laws in place, but equally important, the capacity to implement them. Existing rules to identify the beneficial owners of assets and prevent the operations of shell companies and other opaque structures need to be enforced. A system for exchanging tax information is as vital as preventing tax evaders and money launderers from hiding their ill-gotten gains. Ensuring that cross-border financial flows use formal financial systems is also key to tackling IFF – this is the essence of the work the World Bank Group is conducting with the Financial Stability Board and the G20 to address derisking, and preventing international transactions from going underground.

The World Bank Group has the convening power and the technical expertise to help countries achieve these goals. We can bring together developed and developing countries, coordinate global activities, and help shape global standards. The agreement reached in Addis Ababa provides a strong platform to advance this agenda, notably by moving the work to the country level. Our experience and know-how in resource management, financial and fiscal transparency, governance, tax, financial intelligence and regulation, anti-money laundering, and the return of stolen assets can help countries devise tailored solutions to stem IFFs.

We stand ready to collaborate with civil society organizations and the private sector, as private companies must do their part to ensure their tax and trade practices comply with local laws.

In Addis, I participated in a lively discussion at an event we co-hosted with the UNODC and the OECD on IFFs with Oxfam and government representatives from Kenya, the US, UK, Sweden. We sought to identify the concrete actions needed to address IFFs and increase revenue in developing countries.

This discussion was only a starting point on the road to 2030. Declarations, commitments, and intentions will remain just that unless they are followed up with concrete actions to stem IFFs.

This is not an abstract challenge, but one that affects the lives of millions of people around the world. Every dollar diverted means less money to spend on clean water, health clinics, teachers and more. It strips developing countries of the resources that belong to them and should be spent on their development priorities.

We hope that all countries, international organizations, the private sector and civil society will build on the momentum of Addis Ababa to come together to tackle this critical development challenge. I look forward to continuing the dialogue as we discuss the financing for development agenda. Success lies with all, but failure to address illicit flows will fall upon the poorest and most vulnerable, and we cannot allow that to happen.

Trump on the 2008 financial crisis: “I don’t think the Democrats would have …

Via the Right Scoop, who’s incredulous that Trump could breeze so easily past the history of the CRA and which side of the aisle was more gung ho for subprime lending. Saying that both parties were to blame (as Trump will undoubtedly do once some of his new fans on the right start grumbling about this) would have been unremarkable. Saying I don’t think the Democrats would have done that makes this, shall we say, special.

What happens now? On the one hand, this is a direct challenge to conservative orthodoxy, which holds that the roots of the ’08 crash lie in the left-wing idea that the government should make easy money available to the poor for home-buying regardless of their ability to pay it back. Click the image below and listen not just to Trump but to Mark Levin, making that case at length a few years ago. Giving Democrats a pass on the financial crisis is like giving Bill Clinton a pass on the rise of Al Qaeda in the years before 9/11. If you wanted to choose one single soundbite from the past two months to support the case that Trump’s a Democrat in Republican clothing, this would be it. On the other hand, the way populist hero-worship works is that whatever the hero says is true and correct whether it contradicts ideological orthodoxy or not. If Trump says Republicans alone were to blame for the crash, well that’s just his way of reminding the Beltway RINOs that they’re complicit in the subprime crisis too. He’s trying to tear down the GOP establishment. Why would we begrudge him this hugely damaging lie in service to that noble cause? The most important thing now is to stop Bush; reminding the world that Jeb’s brother presided over the crash helps do that, even if Democrats are destined to pull this soundbite and beat the hell out of the eventual GOP nominee with it in attack ads. The reason it’s called a cult of personality is because, ultimately, it’s about personality, not about correctly apportioning blame for the biggest economic slump since the Great Depression in the middle of a presidential race.

Someone onstage is going to throw this in his face at the first debate and Trump, despite his reluctance to apologize, will certainly retreat from it. I wonder if that’ll pop the bubble. You know what the weirdest part of this is, though? For a guy who’s making lots of noise lately about potentially running as an independent, this is a strange issue on which to take an essentially partisan stance. If there’s any issue of the last, say, 40 years on which a third-party candidate would want to blame both parties, it’s the financial crisis. A pox on both their houses for wrecking Main Street to protect Wall Street; that’s why we need independent leadership in the White House! Instead, Trump’s telling you flat out that the Democrats are more reliable on the economy than Republicans are. Vote Hillary, I guess. Click the image to watch.

Nikkei’s surprising purchase of the Financial Times | The Economist

SPIRITS were high at the prestigious Imperial Hotel in Tokyo on July 24th as the top brass of Nikkei, Japan’s largest media company, gathered before local newspapermen to broadcast their purchase of the Financial Times. “I don’t have the skill to read it but I do gaze upon it,” declared Tsuneo Kita, Nikkei’s chairman. Many big, global names in journalism have at one time or another been outed as imminent buyers for the paper, but never that of Nikkei, which remains relatively unknown in the West. On July 23rd the FT Group’s current owner, Pearson, a British education and media conglomerate, said it would sell the paper to Nikkei for £844m ($1.3 billion). Nikkei narrowly beat Germany’s Axel Springer, a more diversified media group.

In kinder times for newspapers, Marjorie Scardino, a former chief executive of Pearson, said the FT would be sold “over my dead body”. For nearly 60 years the FT has added excitement to Pearson’s more stolid education businesses, and been a potent calling card in countries ready for business expansion, such as America, Brazil and China. The current boss, John Fallon, said the prompt for selling the paper was the growth of mobile and social media platforms which had brought an “inflection point” in the media world. A better home for the FT would be a global, digital news company such as Nikkei, he said.

Yet it is by buying the FT that Nikkei, which for now remains a highly domestic company focused almost exclusively on the Japanese market, will stake its claim to global reach. Its Nihon Keizai Shimbun is the largest business newspaper in Japan, yet the firm is probably best known outside for publishing the Nikkei 225 share index. It has long sought to parlay the newspaper’s domestic dominance of business news into an international presence, with little success. In 2013 it began publishing an English-language magazine, the Nikkei Asian Review, but it has struggled. Nikkei doubtless now also sees itself as joining Japan Inc’s charge abroad–there has been a recent string of acquisitions by Japanese firms in fields as diverse as drinks firms to banking to bathroom equipment–and furthering the aims of Shinzo Abe, the prime minister, to boost Japan’s standing.

The Financial Times Group may see its own global aspirations suffer from its new association, most notably in China, where it publishes a highly respected Chinese edition of the flagship paper. The FT has managed to maintain more cordial relations with China’s hypersensitive leadership than other western publications, including the New York Times and Bloomberg, a newswire, which have investigated top figures’ personal finances. Japan’s badly strained relations with its big neighbour could hurt the group’s prospects. Nikkei, after all, is close to the Japanese corporate and political establishment, and functions as “a machine to make Japan Inc look good” says Jesper Koll, an economist in Tokyo.

The German firm, owner of the newspapers Bild and Die Welt, could have been a more neutral acquirer, but was pipped to the post in the very last hours. It now earns 70% of operating profits from digital businesses and it would have been able to bring much digital experience to the FT. In Japan, print circulations are still astonishingly high by global standards, but they are now slowly and steadily falling because of online media. Nikkei still relies chiefly on paper and ink: of 2.7m subscribers, only some 430,000 access its products digitally. The FT, with two-thirds of its 720,000 paying readers digital, is more advanced in navigating the transition.

Axel Springer was reportedly disappointed to lose the deal. In addition to being willing to pay more, Nikkei was perceived as being more likely to invest generously in the FT, says a person close to the negotiations for the sale. Nikkei is also expected to give the FT’s managers more room to run things as they see fit than the German company, which is known for its rigorous approach.

Nonetheless, the stratospherically high price Nikkei is paying for the FT Group–one that values it at 2.5 times its revenue last year, a reminder of earlier, halcyon days in the newspaper business–may limit its room to invest. The funding for the purchase will be raised chiefly through debt. The deal does not include the FT Group’s headquarters building in central London, nor its 50% share in The Economist Group, the parent of The Economist.

The government of Mr Abe was quick to hail Nikkei’s coup. Akira Amari, the economy minister, said the deal would aid more accurate reporting on what the Abe government is trying to do with the economy, a comment which is likely to have provoked unease in the FT’s newsroom. Nikkei has pledged to respect the paper’s culture, though it adheres to very different journalistic traditions, such as Japan’s system of kisha clubs, or reporters’ clubs, in which media organisations agree to restrict the access of non-affiliated journalists to government ministries and other key institutions.

Nikkei journalists themselves have a reputation for knowing everyone and everything that matters–but holding their punches on controversial stories. One former reporter, Shigeo Abe, who spent 25 years at the paper before leaving to set up Facta, a monthly investigative business magazine, says its journalists are overly timid due to their fear of legal action and losing ad revenues from the big companies they cover.

They could also lose access to the early scoops on company earnings that the Nikkei newspaper excels in, and which have recently aroused controversy, because they seem to trespass on the principle of fair market disclosure. Last year the Tokyo Stock Exchange moved to limit the leaking of market-moving information to the media. It no doubt impressed Nikkei’s top managers that the paper which highlighted the issue last year was none other than the Financial Times.

Wealthy millennials decline financial advisers’ services: survey

More than half the wealthiest young Americans do not use financial advisers, according to a survey released Thursday, and wealth managers may be missing opportunities to discuss health, family and financial values with those and other potential clients.

Just 47% of multimillionaires ages 18 to 34 reported using the services of a wealth manager, broker, financial planner or private banker.

The results came from an online survey of 640 US adults with more than $3 million in investible assets, excluding their primary residence. It was commissioned by US Trust, a wealth management unit of Bank of America Corp., which is based in Charlotte, NC

Estate planning: Your financial inventory

Suppose a friend of yours has just died. You had previously agreed that when this time came, you would settle her estate. Once your initial shock and sadness passes, you might ask yourself, Where do I begin? In this column, we will consider an estate planning document that can help with this question — the financial inventory.

A financial inventory is a listing of all your financial accounts and contact persons. This listing can be an invaluable time saver for your executor (the person charged with carrying out a wills terms) or, in the event of incapacity, your attorney-in-fact. A complete and current financial inventory will minimize the search for assets, liabilities, insurance policies and other items, saving time and money and ensuring that nothing is forgotten. In addition, the compilation of the financial inventory can help with lifetime financial planning by putting all of a persons finances together in one view.

A well-constructed financial inventory will list the date it was compiled. It will also contain three types of information: accounts, papers and persons.

The accounts section of the financial inventory includes all financial accounts. These can be bank, brokerage, mutual fund, credit union, retirement pension and any other accounts. Liabilities like car notes, credit cards or mortgage or student loans should also be included. Very importantly, this section should also contain life, health, property and Social Security insurance information. For each item, it is common to list the name of the institution, the type of account, the account number and the institutions contact information.

The papers section lists the location and description of important estate, financial and personal documents. Important estate documents can include the last will and testament, powers of attorney, trust instruments, marital agreements and military documents. A listing of real property deeds, tangible personal property titles and stock or other security certificates will typically also be included here. For each item, it is useful to list the location of the document and a brief description. For example, one item might read, Prenuptial agreement — right desk drawer, filed under Marriage — limits wifes claim to estate.

Lastly, a financial inventory will include the names and contact information of persons who should be notified at your death. Your estate has an interest in notifying many persons, and many people do not regularly read obituaries, so this contact list will be helpful. In addition to distant friends and relatives, this list could include attorney(s), accountant(s), clergy, employer, former spouse(s) and other interested persons.

Once the financial inventory is completed, it should be stored carefully. The inventory should be kept in a place that can be accessed reasonably easily and quickly when needed. However, because the inventory contains significant and sensitive financial information, it should be stored in a place that is also secure. One or two well-trusted friends should know the location of your financial inventory and how it can be accessed.

Plenty of templates are available to guide the construction of your financial inventory. Two good online templates can be found at http://www.caringinfo.org/files/public/My_Financial_Inventory.pdf and at http://vanguard.com/pdf/amspfi.pdf .

Dr. James Philpot, CFP is associate professor of finance at Missouri State University. Views expressed in this article reflect those of the author, have been distributed for educational and informational use only, and are not to be construed as legal advice.

Consumer Financial Protection Bureau Proposes New Payday Lending Rules

The aim of both rule types is to prevent debt traps, in which borrowers get stuck in a devolving cycle of more borrowing to pay off debt. Since payday loans are unsecured loans, without the ability to simply lend ever-increasing amounts to consumers, the lenders economic incentive is to help the borrower repay the initial loan.

The proposed rules would apply to any loan with a repayment period of 45 days or less, and cover both traditional storefront lenders and online lenders.

President Barack Obama will also speak about the need for increased payday loan regulations during a trip to Birmingham, Alabama, AL.com reported Monday. His comments will add heft to the agencys new proposed rules.

The rules are likely to face strong opposition from the payday lending industry, as well as Congressional Republicans. On Tuesday, House Republicans excoriated the head of the FDIC for his agencys effort to crack down on fraudulent activities in specific, high-risk industries, including payday lenders, gun dealers, assorted financial scammers and escort services.

Mike Calhoun, president of the Center for Responsible Lending, said that if it is made mandatory, forcing lenders to judge if customers can actually repay loans will help millions of borrowers avoid dangerously high-cost payday and other abusive loans. Calhoun worried that there were still loopholes for payday lenders to exploit, and noted the industrys adroitness in adapting abusive practices in response to new regulation. The Washington Posts Jeff Guo chronicled the ways payday lenders have wriggled through state laws meant to regulate payday loans, including issuing simultaneous loans to get around borrowing limits and calling themselves mortgage lenders.

The National Consumer Law Centers Lauren Saunders pointed out that while promising, the agencys proposal would permit a triple-digit six-month installment loan if payments are limited to 5% of the borrower’s gross income,
regardless of the borrower’s expenses or debts. Expenses and other debts, Saunders said, not income alone, are key to understanding if a loan truly is affordable to a borrower.

Dennis Shaul, head of the payday lending industry group the Community Financial Services Association of America, said in a statement that payday loans are a crucial, and sometimes the only, source of credit for millions of Americans, and that any new regulation should take into account decreased consumer access to credit.

In an indication of what the industrys argument against the CFPB rules might be, he also warned that new rules should be grounded in rigorous research, not anecdote or conjecture.

Franklin Financial Network raises $55M in IPO

Franklin Financial Network, the parent company of Williamson County-based Franklin Synergy Bank, made its debut on the public markets Thursday, raising $55.4 million.

Shares of the Franklin bank opened and closed at $21 on the New York Stock Exchange, climbing as high as $21.18 under the ticker FSB.

Thats the reaction we had hoped for, said Richard Herrington, Franklin Financial Network CEO. Based on what we saw today, we feel like we priced it right and we are very satisfied.

Herrington founded the bank in 2007 with the intention of taking it public and merged with Murfreesboro-based MidSouth bank in 2014. The bank, which includes $1.4 billion in assets, posted a $9.4 million profit in 2014. Herrington said the additional capital will support organic growth, and he does not have plans to acquire another bank.

Our growth has been really, really strong over the last couple of quarters, Herrington said. The reason we raised the capital to begin with is we see the growth. We like to be in front of the growth (and) have enough capital to make sure we can continue to grow.

Franklin Financial Network is the second local bank in recent weeks to go public. Avenue Financial Holdings, parent company of Nashville-based Avenue, began trading on the NASDAQ Global Market in February, raising $29.7 million. Of that, $14.7 million was new capital, and the bank subsequently redeemed $18.9 million in preferred stock.

Pinnacle Financial Partners, joined the NASDAQ in 2002, after a 2000 IPO that generated $18 million. Nashville-based CapStar Bank also is expected to pursue an initial public offering.

Franklin Financial shares were previously estimated at $24-$27, but the bank lowered its price Wednesday and increased the number of shares to 2.64 million. The amended pricing may have been influenced by weaker stock market performance in recent days, said Nashville banking analyst Jeff Davis, who describes Franklin Financial as a great growth story.

When you are pricing an IPO in a down market, particularly a market with a lot of pressure on it, most IPOs will have some pressure on the pricing, regardless of the story, Davis said.

Bank of America Merrill Lynch, Raymond James and Sterne Agee were underwriters on the IPO and had the option of buying 390,000 shares.

Shares of Avenue, led by CEO Ron Samuels, have climbed to $12.15 since closing at $11.88 on its first day of trading.

Reach Jamie McGee at 615-259-8071 and on Twitter @JamieMcGee_.

Fed Focuses on Shadow Banking as It Gauges Financial Risk

Worldwide, shadow banking assets have grown, while banking assets stagnated, according to a report by the Financial Stability Board, a global group of regulators. Photographer: Brent Lewin/Bloomberg