Iran Oil Demand, Hanergy Trading, Bond Liquidity: Compliance

Updated on

The National Iranian Oil Co. will meet with customers in Asia and in the Mediterranean region to gauge customer demand amid plans to boost oil sales once sanctions are lifted, according to three company officials.

The state-run company, known as NIOC, will assess whether former customers upgraded refinery configurations or changed the quality of crude used since the last time Iran supplied them, said the people, who asked not to be identified, citing company policy. NIOC officials will ask buyers to take delivery of oil at Iranian ports after restrictions on shipping insurance are eased, they said.

Iran previously supplied about 500,000 barrels a day to Mediterranean buyers, including in Italy, Greece and Spain, they said. Under the international sanctions, Iran was allowed some sales to buyers in Asia and Turkey. Two calls to NIOC’s public relations department in Tehran weren’t answered.

OPEC’s fourth-largest member agreed with the U.S., China, Russia and three European countries on Tuesday on measures designed to curb its nuclear program in exchange for ending the sanctions.

Iran’s oil reserves are estimated at 157.8 billion barrels by BP Plc.

For more, click here.

Compliance Action

Qualcomm Faces EU Antitrust Investigations Into Chip Pricing

EU Competition Commissioner Margrethe Vestager added Qualcomm Inc. to her growing list of fights with U.S. technology companies, saying the chipmaker may be abusing its market power to undercut competitors.

Qualcomm, the maker of chips that power most of the world’s smartphones, may have deployed predatory pricing practices for certain chipsets and offered unfair rebates to customers in a bid to thwart competitors, the European Commission said Thursday as it started two probes into the company.

The commission, the antitrust agency for the 28-nation EU, in 2009 dropped a four-year probe into the company that started after competitors complained the chipmaker was charging excessive royalties on patents.

“While we were disappointed to hear this, we have been cooperating and will continue to cooperate with the commission, and we continue to believe that any concerns are without merit,” Qualcomm said in an e-mailed statement.

The probes add to a growing list of European Union cases targeting U.S. companies. The commission has no deadline to finish the investigations and said the opening of the probes means it will “examine the cases as a matter of priority.”

For more, click here.

Hong Kong Regulator Orders Suspension of All Hanergy Trading

Hong Kong’s stock watchdog took the rare step of saying trading in Hanergy Thin Film Power Group Ltd. shares can’t resume without its approval, raising the prospect they’ll remain suspended for the foreseeable future.

The suspension by the Securities & Futures Commission falls under a rule allowing it to call for a halt when it believes that misleading, false or incomplete information has been included in documents and statements.

Regulators were already investigating Hong Kong-listed Hanergy, which hasn’t traded since it requested a halt on May 20 after its shares lost almost half their value in less than half an hour.

FTSE said on its website Wednesday that it was dropping Hanergy from its FTSE China 50 Index and other indexes effective July 20 because of the suspension.

Liu Yanjun, a public relations manager at Hanergy Thin Film’s Beijing-based parent, Hanergy Holding Group Ltd., declined to comment on the order by the regulator.

An SFC spokesman, Ernest Kong, declined to comment.

Shares in Hanergy continued to change hands over the counter since May 20, although Hong Kong stock exchange trading remains suspended, according to July 14 reporting by the Central Clearing and Settlement System.

For more, click here.

Courts

Rand Paul Sues IRS Over Foreign Account Taxes, Disclosures

Republican presidential candidate Rand Paul sued the Treasury Department and Internal Revenue Service over rules on how Americans abroad are taxed and what foreign banks must disclose about U.S. customers.

The Foreign Account Tax Compliance Act is supposed to make it harder to hide assets overseas, yet its regulations are unconstitutional and violate privacy rights of U.S. citizens, Paul said in the complaint.

The tax act, or Fatca, severely impinges on the ability of Americans to live and work abroad, according to the complaint.

The suit, brought by the U.S. senator from Kentucky and six others, requires millions of Americans living abroad to report accounts above $50,000 with their annual tax returns. Fatca also requires foreign banks to report any account held by a U.S. taxpayer.

Justice Department representatives didn’t immediately respond to an e-mail after regular business hours seeking comment on the lawsuit.

The case is Crawford v. U.S. Department of Treasury, 15-cv-00250, U.S. District Court, Southern District of Ohio (Dayton).

Interviews/Commentary

Bond Swings Studied Enough, Time for Rules, SEC Official Says

The feverish price swing for Treasuries last October, and repeated warnings from investors that there are liquidity problems in the U.S. bond market drew a response this week from regulators for more study.

One member of the U.S. Securities and Exchange Commission took exception with that approach, arguing that it’s time for action. Luis Aguilar, a Democrat serving his final months as a commissioner at the agency, wants electronic trading of Treasuries to come under SEC rules designed for brokers and exchanges that trade stocks and corporate debt.

“The Treasury market now faces many of the same challenges that confront the equity market, including the ascendancy of high-frequency trading,” Aguilar said in a Tuesday statement that indicated an attempt to prod bolder steps by regulators.

In a report issued Monday, agencies including the Federal Reserve, SEC and Treasury Department found no single cause for the rapid rise and fall of Treasury yields during a 12-minute period on Oct. 15. The group reviewed the possible role of high frequency trading in that event.

Treasury officials and financial regulators said in their report that they will continue to review the evolution of the Treasury market and assess whether new rules are needed. Electronic trading now accounts for more than 50 percent of trading volume in cash Treasuries, with some regulators expressing surprise at the finding.

For more, click here.

Separately, the Fed doesn’t see signs of liquidity problems in U.S. bond markets, despite warnings from investors to the contrary.

Despite market commentary pointing to a possible deterioration in liquidity, a variety of metrics -- including bid-asked spreads and bid sizes -- have displayed no notable signs of liquidity pressures over the past half-year, the Fed board said Wednesday in a semi-annual report to Congress.

For more, click here, and click here.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE