FX Sanctions, Europe ABS, BNP Paribas: Compliance

Traders who manipulate currency rates or borrowing costs would face criminal charges under plans to be announced by U.K. Chancellor of the Exchequer George Osborne in a crackdown on bankers less than a year before a general election.

The government is poised to extend laws imposing as much as seven years in jail for Libor manipulation to gauges used in foreign-exchange, fixed-income and commodity markets, according to a statement by the Treasury before Osborne and Bank of England Governor Mark Carney spoke yesterday at London’s Mansion House. The measures are part of a review by the Treasury, BOE and Financial Conduct Authority of how markets operate.

The 12-month Fair and Effective Markets Review will first identify which specific benchmarks will be subject to criminal sanctions, according to a Treasury official. The final list should be submitted later this year, said the official, who asked not to be identified because the information isn’t public.

The measures follow scandals that roiled the country’s financial industry.

Compliance Policy

Banks to Get EU Approval to Use Wider Range of Asset-Backed Debt

European Union banks are set to win the right to use a wider range of asset-backed debt to meet their liquidity requirements as the bloc hunts for ways to boost the market for such securities.

The European Commission is advocating that securitizations of loans to small businesses and consumers including car buyers be allowed to count for as much as 15 percent of the buffers banks will be required to hold under the rule, according to an EU document obtained by Bloomberg News.

For the debt to be eligible, the securities must be from the most senior part of a securitization, which itself needs to be of at least 100 million euros ($135 million), according to the document. The securities also must mature within five years or less.

Securitized debt must be “highly liquid” to count under the rule, according to the commission document.

Support Withers for SEC’s Money Funds Rule as White Pushes Vote

One year after the U.S. Securities and Exchange Commission proposed new protections for money-market mutual funds, support is eroding for the agency’s plan to rein in the riskiest funds.

In recent days, two of the agency’s five commissioners have voiced objections to parts of the proposal that could be voted on as soon as late July.

The SEC is under growing pressure from the Federal Reserve and other U.S. and global regulators to make money funds less vulnerable to investor runs.

The discord has raised the possibility that the rule -- required by the 2010 Dodd-Frank Act and already years overdue -- could be delayed still further. SEC Chair Mary Jo White said last month that the proposal is “front and center” and the commission will vote in the “very near term.”

Commissioner Michael Piwowar, a Republican, said he opposes the agency’s strictest option for regulating money funds and is weighing an approach favored by the companies that manage the funds. In an interview, Piwowar said the agency has yet to justify its move to re-price shares of some money funds to make fluctuations more apparent to shareholders.

Commissioner Kara M. Stein, a Democratic member, also has questioned the proposal and said it falls short of the goal of limiting systemic risk.


Intel Defeat Over Record Fine Strengthens EU Regulator’s Hand

Intel Corp. lost its fight against a record 1.06 billion-euro ($1.4 billion) antitrust fine in a ruling that may embolden European Union regulators in other monopoly investigations.

The EU’s General Court rejected “in its entirety” Intel’s attempt to overturn the penalty for giving rebates to computer makers that favored its chips over the products of its main competitor, Advanced Micro Devices Inc.

Intel argued at a court hearing two years ago that EU regulators ignored exonerating evidence to build an “extreme case.” The company is “very disappointed,” spokeswoman Sophie Jacobs said. “This is a complex case and the decision reflects that.”

The General Court’s decisions can be appealed to the EU’s Court of Justice, the bloc’s highest tribunal.

Sunnyvale, California-based AMD is no longer involved in the EU court case.

The case is T-286/09 Intel v. Commission.

Comings and Goings

BNP Paribas’s Chodron de Courcel to Retire Amid Probe: Video

Georges Chodron de Courcel, a chief operating officer of BNP Paribas SA, will step down this month as U.S. authorities prepare to fine the bank as much as $10 billion for its dealings with sanctioned countries.

Chodron de Courcel hasn’t been accused of wrongdoing.

Mark Barton and Anna Edwards report on Bloomberg Television’s “Countdown.”

For the video, click here.

U.S. CFTC Names Former Prosecutor Goelman to Head Enforcement

Aitan Goelman, a former federal prosecutor and criminal-defense lawyer, was named director of enforcement at the Commodity Futures Trading Commission.

He was appointed by the agency’s new chairman, Timothy Massad.

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