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Remarks By U.S. Department Of The Treasury Assistant Secretary Daniel Glaser At The Atlantic Council And Thomson Reuters "Power Of Transparency" Speaker Series: The Role Of Transparency In Fighting Corruption In Financial Systems"

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Thank you Dawn for that kind introduction – and thank you to both the Atlantic Council and Thomson Reuters for organizing this event today. 
 
As you know, I’ve been asked to speak today about corruption and our efforts to ensure that the financial system is a hostile environment to its proceeds.  It should go without saying that corruption harms the global community for a wide range of reasons: it stifles economic development, impairs democratic institutions, erodes public trust, and impairs international cooperation.  Moreover, corruption creates space for criminals to flourish and abuse the financial system – threatening local, regional, global, and U.S. national security.
 
The eradication of corruption—like the eradication of crime—is a noble pursuit for which we will likely always fall somewhat short.  However, we do have the capacity to reduce corruption, make it less profitable, and bring corrupt officials to justice.  That is why we criminalize corruption, and continue to investigate and prosecute those who engage in it – both here and abroad.
 
But fighting corruption is about more than just prosecutions.  At Treasury, we have the unique ability to make it more difficult for corrupt individuals to use the money that they steal.  The key to doing this is by focusing on strengthening financial transparency – particularly through effective implementation of measures regarding anti-money laundering and countering the financing of terrorism, known as AML/CFT.  Domestically, this work is led by the U.S. Treasury Department in collaboration with a variety of regulatory and law enforcement agencies.  Globally, this work is led by finance ministries throughout the world, working through bodies such as the G-7, G-20, and Financial Action Task Force, as well as the IMF and World Bank.  Today, I would like to talk about these efforts and their importance to our collective fight against corruption.  This is where the work of the Treasury Department and my office – the office of Terrorist Financing and Financial Crimes – is essential.
 
Financial Transparency
 
Financial transparency, at a basic level, means having timely, meaningful, and reliable information about the parties to transactions and assets.  We achieve this through preventive measures on the front end, as well as effective monitoring and reporting on the back end.
 
Financial transparency is essential to the success of corruption investigations and the investigations of many crimes, because it better enables us to trace, identify, and ultimately return assets stolen by corrupt leaders and regimes.  What’s more, financial transparency itself has a strong deterrent effect on criminals, keeping their money out of the financial system to begin with.
 
The U.S. financial transparency framework is already strong and effective.  An interlocking array of identification, recordkeeping, and reporting requirements help shed light on illicit actors and transactions, and ensure the integrity of our efficient financial system.
 
Of course, we recognize there are steps we can and should take to improve our system.  This is a point that I will discuss in a moment, but it is important to first place these legitimate criticisms in the context of the broad U.S. system and in particular our strong enforcement culture.
 
The United States has always pioneered anti-money laundering.  We were the first country to criminalize money laundering and to put in place an anti-money laundering framework, and we continuously work to ensure its effectiveness, and rigorously enforce its requirements.
 
Of note, the United States prosecutes well over 1,000 cases each year for money laundering and related violations.  Each year we seize and forfeit billions of dollars of assets that represent the proceeds of, or were used to facilitate, crimes. 
           
And we diligently and carefully enforce for compliance in financial institutions, matching penalties with the severity of infractions.  Last year alone we assessed total regulatory and criminal penalties of more than $1 billion, imposing criminal fines for particularly egregious, willful behavior and imposing lower regulatory penalties or informal remedial actions for less egregious or unknowing behavior.  And over the past several years, criminal fines imposed against banks for egregious, prolonged, and willfully illegal activity can be measured in the billions of dollars.
 
This is a record that no one in the world can match.  It creates a hostile environment for those who want to hide their assets in our financial system, and sends the message that when we put a law or regulation on our books, it is a serious matter, and we hold people to account for violations.
 
Domestic Implementation
 
Yet, as I noted, we can do better.  We are constantly working to enhance financial transparency to prevent corrupt individuals and other criminals from abusing legal entities in order to conceal their identities and move stolen assets into and through the financial system.
 
One key measure underpinning financial transparency is effective customer due diligence – called CDD for short.  Financial institutions are our front line of defense, and they need to be empowered to identify their customers, verify the information they have, and monitor for suspicious activity. 
 
In order for these relationships to be truly transparent, financial institutions also need to know who is ultimately behind an account, that is, who is the “beneficial owner.”  To further improve our own system in this regard, we are developing a rule to clarify and strengthen financial institutions’ CDD obligations.  Our proposed rule clarifies CDD expectations and includes a requirement to identify and verify beneficial owners of certain legal entity customers.
 
After a careful review of public comments to the proposed rule and related cost-benefit analysis that Treasury prepared, we sent a final draft of the rule to the Office of Management and Budget earlier this month.
 
But financial transparency goes beyond the role of financial institutions alone.  That’s why we are also focusing on improving the transparency of companies themselves.
 
Such a reform requires congressional action, and the Administration continues to advocate for legislation that would require the identification of the beneficial owners of U.S. legal entities and provide law enforcement with ready access to this important information.
 
We are committed to working with Congress to pass meaningful beneficial ownership legislation.  To be effective, this legislation must require that all companies know and disclose adequate and accurate beneficial ownership information at the time of creation, regularly update this information, as well as face penalties for failure to comply with these provisions.
 
Global Implementation
 
Addressing financial transparency is not just a U.S. responsibility.  It is a global responsibility.
 
The international financial system is integrated, leaving us only as strong as our weakest link.  A timely example is the so-called Panama Papers, which  underscore the importance of a broader set of issues that we are working to address alongside our international partners.
 
Only through effective implementation of the international AML/CFT standards around the globe we can address the corruption challenges that we all face.
 
The key here – one that I cannot stress enough – is implementation.  Countries must do more to effectively implement their laws.  When we pass a law in the United States, we implement it.  We have a longstanding record demonstrating the effective implementation of our laws.  Now we need to see our partner countries around the world take this approach and implement strong laws.  
 
One way we do this is by working through the Financial Action Task Force (FATF), the global standard-setting body for AML/CFT and the forum for international dialogue on these issues. The FATF and the FATF regional style bodies are essential to global implementation of the AML/CFT.
 
We also work through the G-20 and the G-7 to advance financial transparency.  Recently, the G-20 anti-corruption working group developed the G-20 High Level Principles on Beneficial Ownership and has pressed members to publish action plans.  Ours was published last October and is available on the White House website.
 
And we maintain close and ongoing bilateral efforts with countries around the world, focused on supporting key partners as they make improvements to their AML/CFT frameworks and advance financial transparency even further. 
 
Conclusion
 
Financial transparency is a key element in the fight against corruption, money laundering, and terrorist financing.  The core elements of financial transparency, provided by international AML/CFT standards, help identify, trace, and ultimately return corrupt proceeds to their rightful owners.
 
It’s clear that there is more work to be done.  At home, we will take steps to clarify and strengthen the diligence performed by financial institutions.  And, at an even more fundamental level, we are seeking to inject transparency into the root of company formation.
 
Just as we have work to do at home, there is much that needs to be done globally.  Countries around the world need establish and implement AMF/CFT regimes that create environments that are hostile to all forms of financial crime, including corruption.
 
Thank you again for inviting me here today.

Matthew J. Eichner Appointed New Director Of Division Of Reserve Bank Operations And Payment Systems

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The Federal Reserve Board on Thursday announced the appointment of Matthew J. Eichner as director of its Division of Reserve Bank Operations and Payment Systems, effective May 1, 2016.

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SEC Issues Order Modifying And Extending The Pilot Period For The National Market System Plan To Address Extraordinary Market Volatility

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The Securities and Exchange Commission today issued an order to extend for one year the pilot period of the National Market System Plan to Address Extraordinary Market Volatility, commonly known as the limit up-limit down (LULD) plan.  

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Canadian Securities Regulators Outline Next Steps In The Implementation Of Enhancements For Regulation Of The Fixed Income Market

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Today the Canadian Securities Administrators (CSA) published CSA Staff Notice 21-317 Next Steps in Implementation of a Plan to Enhance Regulation of the Fixed Income Market, which provides an update on various elements of the CSA’s fixed income regulation plan.

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SIFMA Recommends Early Market Close At 3:00pm JST On May 2 For Trading Of US Dollar-Denominated Fixed-Income Securities In Japan In Observance UK May Day

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SIFMA has updated its previous recommendations for a early market close at 3:00pm JST, Monday, May 2 for the trading of U.S. dollar-denominated fixed-income securities in Japan in observance of UK May Day.

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Canadian Securities Regulators Provide Guidance For Making Prospectus-Exempt Market Offering And Disclosure Filings On SEDAR

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Members of the Canadian Securities Administrators (CSA), except for the British Columbia Securities Commission and the Ontario Securities Commission, have published guidance related to amendments to National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR) and Multilateral Instrument 13-102 System Fees for SEDAR and NRD.

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Optimal trading with online parameters revisions. (arXiv:1604.06342v1 [q-fin.CP])

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The aim of this paper is to explain how parameters adjustments can be integrated in the design or the control of automates of trading. Typically, we are interested by the online estimation of the market impacts generated by robots or single orders, and how they/the controller should react in an optimal way to the informations generated by the observation of the realized impacts. This can be formulated as an optimal impulse control problem with unknown parameters, on which a prior is given. We explain how a mix of the classical Bayesian updating rule and of optimal control techniques allows one to derive the dynamic programming equation satisfied by the corresponding value function, from which the optimal policy can be inferred. We provide an example of convergent finite difference scheme and consider typical examples of applications.

The Impact of Services on Economic Complexity: Service Sophistication as Route for Economic Growth. (arXiv:1604.06284v1 [q-fin.EC])

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Economic complexity reflects the amount of knowledge that is embedded in the productive structure of an economy. By combining tools from network science and econometrics, a robust and stable relationship between a country's productive structure and its economic growth has been established. Here we report that not only goods but also services are important for predicting the rate at which countries will grow. By adopting a terminology which classifies manufactured goods and delivered services as products, we investigate the influence of services on the country's productive structure. In particular, we provide evidence that complexity indices for services are in general higher than those for goods, which is reflected in a general tendency to rank countries with developed service sector higher than countries with economy centred on manufacturing of goods. By focusing on country dynamics based on experimental data, we investigate the impact of services on the economic complexity of countries measured in the product space (consisting of both goods and services). Importantly, we show that diversification of service exports and its sophistication can provide an additional route for economic growth in both developing and developed countries.


Thomson Reuters And Thomson Reuters Foundation Hold Trust Forum Asia Conference In Singapore To Raise Awareness Of Human Trafficking And Modern-Day Slavery - Leading Experts, Business Leaders, NGOs And Activists To Convene At Annual Event Focused On Fighting Human Trafficking And Modern-Day Slavery

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Thomson Reuters, the world’s leading news and information provider, and the Thomson Reuters Foundation will host the second Trust Forum Asia conference in Singapore on April 28. Building on the strengths of the Trust Women Conference, the world’s leading anti-trafficking forum, Trust Forum Asia will bring together more than 200 business and thought leaders, together with human rights advocates and legal experts to explore real solutions to fight human trafficking and modern-day slavery across the region.

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SEC Announces Agenda For April 26 Meeting Of The Equity Market Structure Advisory Committee

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The Securities and Exchange Commission today announced the agenda for its Equity Market Structure Advisory Committee meeting on April 26.  The Commission established the advisory committee to provide a formal mechanism through which the Commission can receive advice and recommendations on equity market structure issues.  

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Cyprus Stock Exchange Monthly Bulletin March 2016

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Click here to download Cyprus Stock Exchange's monthly bulletin for March 2016.

Japan's Financial Services Agency: Administrative Action Against Credit Suisse Securities (Japan) Limited

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The Securities and Exchange Surveillance Commission (SESC) conducted an inspection on Credit Suisse Securities(Japan)Limited (hereinafter referred to as “the Company”), and found violations of the Financial Instruments and Exchange Act (hereinafter referred to as ''FIEA''). On April 15, 2016, the SESC recommended that the Financial Services Agency (FSA) should take an administrative action against the Company.

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Bursa Malaysia Registers Profit After Tax And Minority Interest Of Rm49.9 Million In First Quarter Of 2016

Dubai Sukuk Listings Reach USD 42.61 Billion As Emirate Underlines Leadership In Sector - Islamic Corporation For The Development Of The Private Sector Rings Market Bell To Celebrate Listing Of USD 300 Million Sukuk On Nasdaq Dubai

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Khaled Al Aboodi, Chief Executive Officer of Islamic Corporation for the Development of the Private Sector (ICD), today rang the market-opening bell to celebrate the listing of a 300 million US dollar Sukuk on Nasdaq Dubai.

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HKEX Rolls Out Risk Management System For Its Derivatives Market

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Hong Kong Exchanges and Clearing Limited (HKEX) today (Monday) announced the successful launch of its Pre-Trade Risk Management (PTRM) system, a system that offers tools to help Participants in its derivatives market meet their needs for pre-trade controls while complimenting their in-house risk controls.

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Taiwan Stock Exchange & Cathay Securities Corp. Promotes Growing Electric Vehicle Industry To Foreign Investors - Foreign Investors Now Make Up Almost 30% Of Trading In Taiwanâs Rapidly Internationalizing Capital Market, Attracted To High-Growth Sectors

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The Taiwan Stock Exchange (TWSE) and Cathay Securities Corporation today jointly held the ‘Electric Vehicle Forum’ in Taiwan. The forum bought together TWSE-listed electric vehicle suppliers with leading institutional investors from across the Asia-Pacific looking to benefit from another of Taiwan’s fast-growing technology sectors.

In a keynote luncheon address, Dr. Naikuan Huang, Senior Executive Vice President of the TWSE, said, “We are pleased to see more and more foreign investors playing an active role in Taiwan’s rapidly internationalizing capital market. As of the end of 2015, foreign investors accounted for almost 30% of all trading on TWSE and held close to 40% of Taiwan stocks by market capitalization. Events such as the ‘Electric Vehicle Forum’ are an important opportunity for us to highlight the strong technology clusters available on the TWSE, as well as the good returns and high dividend yields they provide to global investors. We hope that investors will add Taiwan’s growing electric vehicle industry to their investment radar.”

The ‘Electric Vehicle Forum’ also included field trips where investors had an opportunity to view the operations of four leading TWSE-listed electric vehicle suppliers: Actron Technology Corporation (8255), Chang’s Ascending Enterprise Corporation Limited. (8038), Cub Elecparts Inc (2231) and Mobiletron Electronics Corporation Limited (1533). The visits were also an opportunity for investors to gain an appreciation of the high-tech development underpinning Taiwan’s electric vehicle industry and the niches it enjoys across the entire supply chain, including batteries, collision avoidance systems, parking assistance systems, automotive materials and ‘Internet of Vehicles’ (IoV).

Michael Chen, Spokesperson and Senior Vice President of Cathay Securities Corporation, said, “As a company, we have been deeply involved in the Asian markets for a number of years. Since 2014, we have been cooperating with Malaysia’s Maybank Kim Eng to expand our range of services and to host international forums and conference calls to support exchanges between domestic companies and large institutional investors based in South-East Asia and around the world. We hope the ‘Electric Vehicle Forum’ and field visits will increase the global exposure of TWSE-listed companies.”

European Commission: Keynote Speech By Commissioner Jonathan Hill At The Joint ECB-European Commission Conference, Frankfurt, 25 April 2016, Commissioner For Financial Stability, Financial Services And Capital Markets Union, CMU Status Report, Economic And Financial Stability, Integration Review And The Banking Union

CES Shanghai-Hong Kong Stock Connect 300 Index To Be Revamped And Renamed

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Responding to the market’s strong demand for a comprehensive cross-border index related to the Stock Connect programme, China Exchanges Services Company Limited (CESC) today (Monday) announced a revamp of its CES Shanghai-Hong Kong Stock Connect 300 Index (CES SHSC300) to include Shenzhen stocks, with the new name CES Stock Connect 300 Index (CES 300) from 23 May 2016.

The revamped index’s 300 constituents will be composed of the top 100 stocks by market capitalisation (market cap) in each of the two Shanghai-Hong Kong Connect markets, plus the top 100 stocks by market cap in the Shenzhen market.  An overview of the index after the revamp is shown in the Appendix.  

In addition to the CESC SHSC300 changes, the name of the related index series (the Index Series), which now consists of the CES SHSC300 and the CES Stock Connect Hong Kong Select 100 Index, will be changed from CES Shanghai-Hong Kong Stock Connect Index Series to CES Stock Connect Index Series from 23 May.

Separately, the regular reviews of the Index Series will be changed from every March and September to every June and December, and any index reconstitution will be implemented after the market close on the second Friday of the month of the review.

For more information on the CES 300 (the post-revamp CES SHSC300), please refer to the index methodology andconstituent list with proforma weightings on the CESC website (www.cesc.com).

Gonzalo Cuadra to chair LME User Committee

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The London Metal Exchange is pleased to announce the appointment of Gonzalo Cuadra as chairman of the LME User Committee.

Gonzalo Cuadra To Chair LME User Committee

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The London Metal Exchange (LME) is pleased to announce the appointment of Gonzalo Cuadra as chairman of the LME User Committee. Mr Cuadra is CEO of Chile Copper Limited and Managing Director of Codelco Services Limited.

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