The Federal Reserve Board on Friday announced it is broadening the scope of post-employment restrictions applicable to Federal Reserve Bank senior examiners and officers.
By law, senior bank examiners are prohibited for one year from accepting paid work from a financial institution that they had primary responsibility for examining in their last year of Reserve Bank employment. This post-employment restriction has applied primarily to central points of contacts (CPCs) at firms with more than $10 billion in assets.
The revised policy expands the number of Reserve Bank examiners subject to this one-year post-employment restriction to include CPCs, deputy CPCs, senior supervisory officers (SSOs), deputy SSOs, enterprise risk officers, and supervisory team leaders. The new policy will more than double the number of senior examiners subject to this post-employment restriction from about 100 employees to about 250 employees.
In addition, a new policy prohibits former Federal Reserve Bank officers from representing financial institutions and other third parties before current Federal Reserve System employees for one year after leaving their Federal Reserve position. The new policy also imposes a one year ban on current Reserve Bank employees discussing official business with these former officers.
The restriction on former officers will be effective on December 5, 2016, and the revised senior examiner policy will be effective on January 2, 2017.
Foto: Michael Mayer
. Las inversiones sostenibles crecen el 33% hasta 8,7 billones en 2016
Sustainable, responsible and impact investing assets now account for $8.72 trillion,or one in five dollars invested under professional management in the United States according to the US SIF Foundation’s biennial Report on US Sustainable, Responsible and Impact Investing Trends 2016 which was released last week.
The biennial Trends Report—first conducted in 1995 examines a broad range of significant ESG issues such as climate change, human rights, weapons avoidance, and corporate governance.
“The trend of robust growth in sustainable and impact investing is continuing as investment managers apply ESG criteria across broader portions of their portfolios, often in response to client demand,” said Lisa Woll, US SIF Foundation CEO. “Asset managers, institutional investors, advisors and individuals are moving toward sustainable and impact investing to advance critical social, environmental and governance issues in addition to seeking long-term financial returns.
“A diverse group of investors is seeking to achieve positive impacts through such strategies as shareowner engagement or investing with an emphasis on addressing climate change, corporate governance, and human rights including the advancement of women.”
The significant growth in ESG assets reflects demand from individual and institutional clients, growing market penetration of SRI products, the development of new products that incorporate ESG criteria and the incorporation of ESG criteria by numerous large asset managers across wider portions of their holdings.
The research found the top reasons managers report incorporating ESG factors include client demand (85%), mission (83%), risk (81%), returns (80%), social benefit (79%) and fiduciary duty (64%).
The number of investment vehicles and financial institutions incorporating ESG criteria continues to grow and includes mutual funds, variable annuities, ETFs, closed-end funds, hedge funds, VC/private equity, property/REIT, other pooled investment vehicles, and community investing institutions.
The leading ESG criteria that institutional investors consider are restrictions on investing in companies doing business in regions with conflict risk (particularly in countries with repressive regimes or sponsoring terrorism) and consideration of climate change and carbon emissions.
Vontobel Asset Management has appointed Patrick Sege as Sales Head of the Thematic boutique, including the mtx Global Leaders Fund range, to drive further the boutique’s global expansion.
Patrick will also be heading the Swiss Intermediary team to support the growing demand for the firm’s offering in its home market. Patrick brings to his new role over 22 years of industry experience.
He joins from the global multi boutique AMG (Affiliated Managers Group) where, as Country Head for Switzerland, Austria and Liechtenstein, he was responsible for business development and relationship management. Prior to that, Patrick worked as Head of Business Development for Switzerland and Continental Europe at Liongate Capital Management.
Patrick holds an M.A. in Economics and a PhD from the University of St. Gallen. “Vontobel’s multi boutique model is the foundation for the strong consistent growth we have enjoyed with our clients over recent years. As passion for performance and specialist product knowledge is at the core of our relationship management culture, Patrick is a perfect addition to our team. His appointment allows us to prudently manage further growth and enhance the level of service we provide to our clients.” said Marko Röder, Head of Global Sales at Vontobel Asset Management.
Foto: Christine und Hagen Graf
. La SEC aprueba que FINRA solicite información sobre mark-ups en operaciones de deuda
The Securities and Exchange Commission has approved FINRA’s proposal requiring its member firms to disclose on retail customer confirmations the “mark-up” or “mark-down” for most transactions in corporate and agency debt securities. The SEC at the same time has approved a similar proposal from the Municipal Securities Rulemaking Board, which harmonizes the requirements across the FINRA and MSRB rulebooks and eases implementation for the securities industry.
The new rule will require that if a firm sells or buys a corporate or agency fixed-income security to or from a retail customer and on the same day buys or sells the same security as principal from another party in an equal or greater amount, the firm would have to disclose on the customer confirmation the firm’s mark-up or mark-down from the prevailing market price for the security. The confirmation would also have to include the execution time and a reference (and hyperlink if the confirmation is electronic) to trade-price data in the security from TRACE, FINRA’s Trade Reporting and Compliance Engine.
The disclosure requirement will not apply to securities acquired in a fixed-price offering and sold the same day to the retail customer at the fixed price offering price, or in situations where the firm does not have an offsetting principal trade in the bonds sold to the retail customer on the same day. An implementation date for the new rule will be announced in an upcoming regulatory notice.
According to Joachim Fels, PIMCO’s global economic advisor, after a short initial post-election shock, many financial market participants seem to have adopted a Dr. Strangelove attitude toward the election of Donald Trump. Developed market (DM) equities, bond yields and the U.S. dollar rallied on hopes for fiscal stimulus and less regulation. (Fels notices that the exception to this apparent market optimism is in emerging market (EM) assets, which dropped sharply on fears of more U.S. protectionism and adverse repercussions from a stronger dollar and higher “risk free” rates.)
“I’m not Dr. Strangelove, and I believe it’s too early to stop worrying. A more differentiated view of the potential long-term economic and policy consequences of President-elect Trump must take on board both the considerable uncertainties still surrounding the next U.S. administration’s economic policies and the global links between economies and markets (which have become closer over the years).” He mentions
Fels strongly believes that there are five things investors may want to consider before “embracing the bomb”:
First, both right-tail and left-tail risks for the global economy and markets will likely become fatter under President Trump. If the new administration focuses on reforming taxes, increasing infrastructure spending and easing regulations, both demand and potential output growth could be lifted without creating excessive inflation. Conversely, a strong focus on punitive tariffs and immigration bans could risk retaliatory responses from other nations and potentially provoke a trade war that fuels deglobalization. It is too early to tell which of these two scenarios, if either, will prevail. In the meantime, markets are likely to oscillate between hope and fear.
Second, while a U.S. recession over the next year or two may now look less likely, the risk that the current expansion ends in tears in 2019 or 2020 has increased. This is because more fiscal stimulus will lift demand at a time when the labor market is close to full employment and the first signs of wage pressures have already started to emerge. Wage and inflationary pressures would be exacerbated if President Trump gets serious about the curbs on trade and immigration he campaigned on. It is possible the Federal Reserve would initially welcome higher inflation and tolerate an overshoot of the target for some time. However, under that scenario the Fed eventually would likely need to raise rates more aggressively than in a scenario without fiscal stimulus and cost-push inflation through protectionism, which could push the economy into recession in 2019 or 2020.
Third, central bank independence as we know it is likely to come under further attack, given both the long-standing criticism of the Fed in conservative Republican circles and the President-elect’s attacks on the Yellen Fed. At a minimum, the new administration is likely to appoint two hawkish candidates to the two vacant seats on the Federal Reserve Board. Also, a new Fed chair might be appointed when Janet Yellen’s term at the helm expires in February 2018. All of this would be common and legitimate practice and does not, per se, constitute an attack on the Fed’s independence. However, it remains to be seen how closely the policy promoted by any new appointees will hew to the new administration’s views. More importantly, the Republican majority in Congress may well start to push forward some of the proposals to narrow the Fed’s mandate that conservative circles have made in the past. The mere rumor of changing the Fed’s mandate may have an impact on monetary policy decisions.
Fourth, in the face of the sharp sell-off in bond markets, the Bank of Japan’s new strategy of “yield curve control” looks even smarter now and might become a blueprint for other central banks, potentially including the Federal Reserve. Consider a scenario where a large fiscal stimulus (or the expectation of such stimulus) pushes up bond yields so sharply that risk assets and the economy suffer. To prevent a bond tantrum, the central bank may want to limit the rise in yields by intervening in the bond market directly. The cleanest way to do this is to announce a cap on yields and stand ready to buy unlimited amounts to preserve the cap if needed.
Fifth, the market reaction to Donald Trump’s election provides a serious test case for the “Shanghai co-op,” as I have called an informal understanding by the world’s major central banks that excessive dollar strength is bad for everyone and should be avoided. The dollar strengthened not only against emerging market currencies but also against the euro and the yen in recent days. While the European Central Bank and the Bank of Japan probably welcome some weakening of their currencies given persistent “lowflation,” too much dollar strength would hurt the dollar debtors in EM, commodity prices and the U.S. energy sector, and could induce China to aim to devalue the yuan more aggressively against the dollar in order to prevent a sustained appreciation against the currency basket.
In the wake of Donald Trump’s election, Mexico, together with China, appears to be the country most exposed to Trump’s economic policy.
According to AXA IM, Trump’s proposed fiscal stimulus has already led to a strong increase in inflation expectations, and his pledges to restrict imports and immigration has spurred a record broad EM selloff.
Manolis Davradakis, Research and Investment Strategy at AXA IM says: “Mexico has been at the eye of this storm given its vicinity and close trade relations with the US. The Mexican peso has depreciated by 10% relative to its pre-election day closing level, the stock market is down 6% and the local currency sovereign 10-year rate has shot up by 112bps. The Mexican central bank had already pre-emptively tightened policy rates to mitigate the impact of a declining peso on headline inflation.”
Since election day, the president-elect has adopted a more reconciliatory tone, downplayed trade protectionism, and focused on deporting illegal immigrants and securing the US/Mexico border. Davradakis believes downside risks for Mexico are mainly exports and remittances, with implications on the current account deficit and economic growth. The US is Mexico’s main trading partner, shipping 81% of its total exports, or 27% of GDP, to the US, mainly consisting of machinery and transport equipment. Mexican exports to the US stood at 10% of GDP in 1994, before the implementation of the North American Free Trade Agreement that president-elect Trump argued in favour of renegotiating during the election campaign.
Remittances are an important component of Mexican household income, and a significant source of the hard currency flows which support the current account balance. The latter recorded a deficit of 2.8% of GDP in 2015, which would have been 5% of GDP without the remittances from the US. Remittances from Mexicans living abroad equate to 2%-3% of GDP over the last decade. Of these Mexicans living abroad, 95% reside in the US, 23% of which do so as illegal immigrants. “Remittances to Mexico from the US would be curbed, also, if levies on remittances for securing the US-Mexican border were to be imposed.”
He believes FX forwards suggest that the Mexican peso will depreciate (against the US dollar) by another 2.5% by year- end, bringing total year-to-date peso depreciation to 25%. This could top up inflation by 0.4pp to 3.4% in 2017 after 2.9% in 2016.
Paris-headquartered boutique Amiral Gestion is set to open an office in Singapore in 2017, the firm’s chairman François Badelon has announced during a conference earlier this month.
Amiral Gestion runs the Sextant fund range that includes four France-domiciled equity funds (Sextant PEA, Sextant Europe, Sextant PME, Sextant Autour du monde) and one diversified strategy (Sextant Grand Large).
Its investment team has a focus on small and mid-cap European stocks.
The manager is already established in Barcelona since 2013.
Founded in 2003, Amiral Gestion has over €1.9bn of assets under management.
Foto: LincolnGroup11. Bill Gross dice que los inversores deben estar satisfechos con retornos anuales de entre el 3 y 5%
In his latest monthly outlook, titled Populism Takes a Wrong Turn,Bill Gross mentioned that President elect, Donald Trump will be a one term president, whose “tenure will be a short four years but is likely to be a damaging one for jobless and low-wage American voters.”
The Bond Guru believes that while Trump “promised jobs and to make America great again, his policies of greater defense and infrastructure spending combined with lower corporate taxes to invigorate the private sector continue to favor capital versus labor, markets versus wages, and is a continuation of the status quo.” Mentioning that Trump’s plan to repatriate corporate profits to the US for infrastructure spending would doubtly succeed, favoring instead dividends, corporate bonuses, and stock buybacks.
However, he doesn’t believe a Clinton Administration could have done much better. He did not vote for either of them given “both the Clinton Democrats and almost all Republicans represent the corporate status quo that favors markets versus wages; Wall Street versus Main Street.”
In his mind, there are better solutions than either party’s election platform. He mentions a “Keynesian/FDR job corps or a Kennedyesque AmeriCorps that puts people to work helping other people” as an example of this. According to him, the government must step in, not by reducing taxes, which will only increase profits at the expense of labor, but by being the employer of last resort in hopefully a productive way.
So he warns that “unless the worker’s share of GDP reverses its downward trend, and capital’s share peaks, then populists worldwide will reject establishment parties in almost every future election – initiating in some cases growth-negative policies revolving around trade, immigration, and yes, in Trump’s case, lower taxation that may lower GDP growth, not raise it.”
He believes investors must drive with caution, understanding that higher deficits resulting from lower taxes raise interest rates and inflation, which in turn have the potential to produce lower earnings and P/E ratios. “There is no new Trump bull market in the offing. Be satisfied with 3-5% globally diversified returns.” He mentioned before warning that the Populist sunrise has barely broken the horizon.
MIPIM Asia Summit, the annual property leaders’ meeting in Asia Pacific organised by Reed MIDEM, will feature the world’s leading real estate execution and experts operating in the Asia Pacific region for a two-day summit.
The 2016 edition will examine emerging industry trends of real estate disruption and property technology innovation, under the theme “Real Estate Disruption: Take a Step Ahead.”
The event will be held 29-30 November 2016 at the Grand Hyatt, Hong Kong.
MIPIM Asia has been established as the premier industry event for professionals and companies operating within Asia’s property industry. It draws over 900 attendees from 30 countries, including international real estate executives, corporate business leaders, public and government sector representatives and academics.
“Asian real estate faces a perfect storm of rising demand from urbanisation even as the working population ages and technology changes the nature of both demand and supply for construction,” Jonathan Woetzel, Director of McKinsey & Company, China said. “MIPIM Asia will examine how Asian companies respond, what will be the breakthroughs that reshape the industry, and who will be the sustainable winners?”
George Hongchoy, Executive Director and CEO, Link Asset Management Limited, said “This year’s MIPIM Asia Summit will explore worldwide developments that are triggering economic and technological disruption in the property industry. At Link, we view disruption as an opportunity to pioneer new strategies, from Big Data and e-commerce to O2O, as a way to enhance shoppers’ experience. The Summit will provide the perfect stage for us to collaborate with our peers on these topics.”
Lombard International, a global leader in wealth structuring solutions for high-net-worth individuals, has appointed Andreas Meier as Head of Latin America. This appointment is the group’s ninth senior level hire since the global relaunch in September 2015 and highlights Lombard International’s continued commitment to servicing the Latin American market.
In this newly created role, Andreas, who will be based in Luxembourg, will report to Axel Hörger, CEO Europe and Ken Kilbane, Executive Vice President, Head of Global Distribution. Drawing on his 24 years of experience of working in the Latin American market, Andreas will be responsible for Lombard International’s business development for the region, combining the wealth structuring expertise and local knowledge of teams based in the USA and Europe.
According to a press release, this is a strategically important region for the Group and Andreas will be instrumental in growing new opportunities, both for the offshore market via key hubs in Miami and Switzerland, and in leading the sales and implementation strategy for the onshore market in the region. Andreas will take up his newly created role on the 1st January 2017.
“I’m delighted to welcome Andreas to the team. His knowledge of the LatAm market will prove invaluable as we continue to expand our proposition in this region,” commented Hörger. “The experience Andreas brings to the role will enable us to deliver best-in-class wealth structuring expertise that we have become synonymous with, not just for our Latin American clients but also for our clients globally.”
Andreas joins Lombard International from UBS Deutschland AG, where he was Head of Wealth Management for Latin America. As Managing Director and Member of the Management Committee Germany and Austria, he was responsible for leading advisor-teams with clients from 14 Latin American countries across all client segments. Andreas has held previous senior positions at UBS Group, including Head of Latin America Southern Cone, Head of Financial Intermediaries and Regional Head of Northern Germany Domestic.
“I am excited to be joining Lombard International and leading the LatAm team.” said Andreas. “This is a growing market, which I know well, where high-net-worth individuals and their families are looking for wealth solutions to support them through a complex and ever changing world.”
