Pub Date : 2020-11-23DOI: 10.1108/joic-08-2020-0015
Alja Poler De Zwart
Purpose To describe the new EU Whistleblowing Directive and its implications. Design/methodology/approach Describes organizations to which the Directive applies, the scope of reportable whistleblowing concerns, whistleblowers’ reporting channels and mechanisms, whistleblower protections, how organizations should respond to whistleblower reports and how organizations should prepare for the new rules. Findings The new Directive will require Member States to create rules for organizations with more than 50 workers, will mandate such organizations to implement whistleblowing hotlines for reporting a broad range of EU law violations, and will contain minimum standards on how to respond to and handle any concerns raised by whistleblowers. Practical implications Organizations in the EU can and should start taking initial steps to prepare for the new rules as soon as possible. There will likely be some differences among whistleblower rules in individual EU Member States. Originality/value Practical guidance from experienced corporate, technology, media, telecommunications and compliance lawyer.
{"title":"EU whistleblowing rules to change in favor of whistleblowers","authors":"Alja Poler De Zwart","doi":"10.1108/joic-08-2020-0015","DOIUrl":"https://doi.org/10.1108/joic-08-2020-0015","url":null,"abstract":"\u0000Purpose\u0000To describe the new EU Whistleblowing Directive and its implications.\u0000\u0000\u0000Design/methodology/approach\u0000Describes organizations to which the Directive applies, the scope of reportable whistleblowing concerns, whistleblowers’ reporting channels and mechanisms, whistleblower protections, how organizations should respond to whistleblower reports and how organizations should prepare for the new rules.\u0000\u0000\u0000Findings\u0000The new Directive will require Member States to create rules for organizations with more than 50 workers, will mandate such organizations to implement whistleblowing hotlines for reporting a broad range of EU law violations, and will contain minimum standards on how to respond to and handle any concerns raised by whistleblowers.\u0000\u0000\u0000Practical implications\u0000Organizations in the EU can and should start taking initial steps to prepare for the new rules as soon as possible. There will likely be some differences among whistleblower rules in individual EU Member States.\u0000\u0000\u0000Originality/value\u0000Practical guidance from experienced corporate, technology, media, telecommunications and compliance lawyer.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123992128","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-23DOI: 10.1108/joic-09-2020-0025
Sonali Dohale, Kara M. Bombach, Cyril T. Brennan, Renée A. Latour, Axel S. Urie
Purpose The article examines the sweeping changes to the review process undertaken by Committee on Foreign Investment in the United States (CFIUS) as a result of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). The Article specifically reviews the long-awaited final sets of regulations, effective as of February 13, 2020, and analyzes their impact on the CFIUS process, as well as considers the implications of FIRRMA for parties to foreign acquisition, control, and investment transactions. Design/methodology/approach The Article begins with an overview of the CFIUS framework and a general explanation of FIRRMA. It then moves to an analysis of FIRRMA and the resulting changes to the prior CFIUS regime. The Article concludes with general considerations and provides recommendations for parties who may find themselves analyzing the potential applicability of CFIUS to foreign acquisition and investment transactions. Findings FIRRMA resulted in significant changes to the existing CFIUS regulatory framework. Practical implications Parties should learn the CFIUS changes as a result of FIRRMA, including the new mandatory filing requirements as well as implications for non-controlling investment transactions. Parties should include CFIUS analysis and planning in the earliest stages of deal planning and due diligence. Originality/value The article provides an in-depth review of the changes to CFIUS resulting from FIRRMA. The changes to the existing CFIUS landscape have resulted in new mandatory filing requirements and expanded jurisdiction over non-controlling investment and real estate transactions, which are discussed in the article.
{"title":"CFIUS issues final regulations on national security review of foreign investments in the United States under FIRRMA: broader reach, mandatory filings, and limited exceptions","authors":"Sonali Dohale, Kara M. Bombach, Cyril T. Brennan, Renée A. Latour, Axel S. Urie","doi":"10.1108/joic-09-2020-0025","DOIUrl":"https://doi.org/10.1108/joic-09-2020-0025","url":null,"abstract":"\u0000Purpose\u0000The article examines the sweeping changes to the review process undertaken by Committee on Foreign Investment in the United States (CFIUS) as a result of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). The Article specifically reviews the long-awaited final sets of regulations, effective as of February 13, 2020, and analyzes their impact on the CFIUS process, as well as considers the implications of FIRRMA for parties to foreign acquisition, control, and investment transactions.\u0000\u0000\u0000Design/methodology/approach\u0000The Article begins with an overview of the CFIUS framework and a general explanation of FIRRMA. It then moves to an analysis of FIRRMA and the resulting changes to the prior CFIUS regime. The Article concludes with general considerations and provides recommendations for parties who may find themselves analyzing the potential applicability of CFIUS to foreign acquisition and investment transactions.\u0000\u0000\u0000Findings\u0000FIRRMA resulted in significant changes to the existing CFIUS regulatory framework.\u0000\u0000\u0000Practical implications\u0000Parties should learn the CFIUS changes as a result of FIRRMA, including the new mandatory filing requirements as well as implications for non-controlling investment transactions. Parties should include CFIUS analysis and planning in the earliest stages of deal planning and due diligence.\u0000\u0000\u0000Originality/value\u0000The article provides an in-depth review of the changes to CFIUS resulting from FIRRMA. The changes to the existing CFIUS landscape have resulted in new mandatory filing requirements and expanded jurisdiction over non-controlling investment and real estate transactions, which are discussed in the article.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124829132","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-23DOI: 10.1108/joic-09-2020-0026
D. A. Nathan, Nikiforos Mathews
Purpose To summarize and explain the U.S. Commodity Futures Trading Commission’s (CFTC’s) guidance regarding whether cryptocurrency is subject to CFTC jurisdiction. Design/methodology/approach The article reviews the CFTC’s March 24, 2020 final interpretive guidance, summarizes the history of the agency’s jurisdiction over leveraged, margined or financed retail transactions, and relates it to the CFTC’s guidance and judicial decisions regarding cryptocurrency. Findings We found that the CFTC, in carrying out its leadership role related to developments in the fintech industry, had provided clarity about its jurisdiction over cryptocurrency. The CFTC defines virtual currency as a “commodity,” even if intangible, and finds that many transactions in virtual currency satisfy the exception to the CFTC’s jurisdiction over leveraged retail commodity transactions because “delivery” can be said to occur within 28 days. Originality/value The article provides a useful summary of an important pronouncement from the CFTC in a manner that is readily understandable and relatable to industry participants and legal practitioners in this field.
{"title":"In or out? – the CFTC explains when virtual currencies come within its jurisdiction","authors":"D. A. Nathan, Nikiforos Mathews","doi":"10.1108/joic-09-2020-0026","DOIUrl":"https://doi.org/10.1108/joic-09-2020-0026","url":null,"abstract":"\u0000Purpose\u0000To summarize and explain the U.S. Commodity Futures Trading Commission’s (CFTC’s) guidance regarding whether cryptocurrency is subject to CFTC jurisdiction.\u0000\u0000\u0000Design/methodology/approach\u0000The article reviews the CFTC’s March 24, 2020 final interpretive guidance, summarizes the history of the agency’s jurisdiction over leveraged, margined or financed retail transactions, and relates it to the CFTC’s guidance and judicial decisions regarding cryptocurrency.\u0000\u0000\u0000Findings\u0000We found that the CFTC, in carrying out its leadership role related to developments in the fintech industry, had provided clarity about its jurisdiction over cryptocurrency. The CFTC defines virtual currency as a “commodity,” even if intangible, and finds that many transactions in virtual currency satisfy the exception to the CFTC’s jurisdiction over leveraged retail commodity transactions because “delivery” can be said to occur within 28 days.\u0000\u0000\u0000Originality/value\u0000The article provides a useful summary of an important pronouncement from the CFTC in a manner that is readily understandable and relatable to industry participants and legal practitioners in this field.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127559451","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-23DOI: 10.1108/joic-09-2020-0028
Melody H. Yang
Purpose To explain the key amendments to China’s rules governing fund custody business and highlight the implications for private fund managers. Design/methodology/approach The article analyses, from the perspective of private fund managers, the key amendments to the rules governing fund the custody business in China in terms of custody of fund assets, the fund settlement and clearing process, valuation, disclosure and reports, investment supervision, review of distributions and governance. Findings The revised rules governing the fund custody business allow private fund managers to use their global custodian in China locally and leave room for managers and custodians to agree on their responsibilities and risk allocation in the fund contract. Originality/value The article offers practical guidance on how private fund managers may contractually allocate responsibilities and risks between themselves and fund custodians in the fund contract.
{"title":"China’s new fund custodian rules","authors":"Melody H. Yang","doi":"10.1108/joic-09-2020-0028","DOIUrl":"https://doi.org/10.1108/joic-09-2020-0028","url":null,"abstract":"\u0000Purpose\u0000To explain the key amendments to China’s rules governing fund custody business and highlight the implications for private fund managers.\u0000\u0000\u0000Design/methodology/approach\u0000The article analyses, from the perspective of private fund managers, the key amendments to the rules governing fund the custody business in China in terms of custody of fund assets, the fund settlement and clearing process, valuation, disclosure and reports, investment supervision, review of distributions and governance.\u0000\u0000\u0000Findings\u0000The revised rules governing the fund custody business allow private fund managers to use their global custodian in China locally and leave room for managers and custodians to agree on their responsibilities and risk allocation in the fund contract.\u0000\u0000\u0000Originality/value\u0000The article offers practical guidance on how private fund managers may contractually allocate responsibilities and risks between themselves and fund custodians in the fund contract.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130009482","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-11-23DOI: 10.1108/joic-08-2020-0014
K. Breen, Phara Guberman
Purpose To analyze the U.S. Securities and Exchange Commission (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”) June 2020 Risk Alert, which identified three categories of deficiencies that the SEC regularly finds in its reviews of advisers to private funds, in order to understand its guidance and recommend best practices. Design/methodology/approach The study discusses the categories of deficiencies that the SEC regularly finds in its reviews of private fund advisers, current SEC enforcement trends, and recommendations for disclosures, internal controls, policies and procedures. Findings The SEC will expect private funds to identify and remedy regular deficiencies in three primary categories: gaps in client and investor disclosures regarding conflicts of interest; deficiencies in disclosures related to fees and expenses; and issues with policies and procedures regarding the treatment of material nonpublic information. Practical implications Private fund advisers should expect increased scrutiny during examinations on the identified deficiencies and use this opportunity to be proactive in addressing these issues. Originality/value Expert analysis and guidance from experienced securities enforcement attorneys.
{"title":"2020 SEC risk alert provides guidance for private fund advisers","authors":"K. Breen, Phara Guberman","doi":"10.1108/joic-08-2020-0014","DOIUrl":"https://doi.org/10.1108/joic-08-2020-0014","url":null,"abstract":"\u0000Purpose\u0000To analyze the U.S. Securities and Exchange Commission (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”) June 2020 Risk Alert, which identified three categories of deficiencies that the SEC regularly finds in its reviews of advisers to private funds, in order to understand its guidance and recommend best practices.\u0000\u0000\u0000Design/methodology/approach\u0000The study discusses the categories of deficiencies that the SEC regularly finds in its reviews of private fund advisers, current SEC enforcement trends, and recommendations for disclosures, internal controls, policies and procedures.\u0000\u0000\u0000Findings\u0000The SEC will expect private funds to identify and remedy regular deficiencies in three primary categories: gaps in client and investor disclosures regarding conflicts of interest; deficiencies in disclosures related to fees and expenses; and issues with policies and procedures regarding the treatment of material nonpublic information.\u0000\u0000\u0000Practical implications\u0000Private fund advisers should expect increased scrutiny during examinations on the identified deficiencies and use this opportunity to be proactive in addressing these issues.\u0000\u0000\u0000Originality/value\u0000Expert analysis and guidance from experienced securities enforcement attorneys.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"80 4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128131299","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-09-18DOI: 10.1108/JOIC-05-2020-0005
A. Al-Hadrami, Ahmad Rafiki, A. Sarea, M. Nasution
Purpose This study aims to investigate the impact of the audit committee’s (AC’s) independence and competence in the company’s investment decision-making in Bahraini- and Indonesian-listed firms, then to compare the two results Design/methodology/approach A quantitative method is used and cross-sectional data are collected through a self-administered questionnaire survey. A stratified random sample technique is adopted with a total of 409 respondents from 39 listed companies in Bahrain and 303 respondents from 27 companies listed on the Indonesia Stock Exchange (IDX). A descriptive analysis is used to identify the characteristics of the respondents, while a correlation analysis, linear regression and t-test analyses are used to test the model, explain the relationships among variables and compare the two studies (Bahrain vs Indonesia). Findings It is found that the AC independence and AC competence have a positive and significant influence on investment decision-making for both the Bahrain and the Indonesia studies Practical implications The current study’s results have implications for the process of appointing and nominating the AC members, since this would affect an investor’s investment decision. Investors’ perception of the independence and competence of ACs will make a difference in their investment decisions. Originality/value AC independence and competence are importantly crucial for the decision-makers in improving the quality of financial reporting, internal control, and audit. This may lead to an increase in investors’ trust in financial reports and their ability to make favorable investment decisions.
{"title":"Is the investment decision affected by the independence and competence of the audit committee? A comparative study between Bahrain and Indonesia","authors":"A. Al-Hadrami, Ahmad Rafiki, A. Sarea, M. Nasution","doi":"10.1108/JOIC-05-2020-0005","DOIUrl":"https://doi.org/10.1108/JOIC-05-2020-0005","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate the impact of the audit committee’s (AC’s) independence and competence in the company’s investment decision-making in Bahraini- and Indonesian-listed firms, then to compare the two results\u0000\u0000\u0000Design/methodology/approach\u0000A quantitative method is used and cross-sectional data are collected through a self-administered questionnaire survey. A stratified random sample technique is adopted with a total of 409 respondents from 39 listed companies in Bahrain and 303 respondents from 27 companies listed on the Indonesia Stock Exchange (IDX). A descriptive analysis is used to identify the characteristics of the respondents, while a correlation analysis, linear regression and t-test analyses are used to test the model, explain the relationships among variables and compare the two studies (Bahrain vs Indonesia).\u0000\u0000\u0000Findings\u0000It is found that the AC independence and AC competence have a positive and significant influence on investment decision-making for both the Bahrain and the Indonesia studies\u0000\u0000\u0000Practical implications\u0000The current study’s results have implications for the process of appointing and nominating the AC members, since this would affect an investor’s investment decision. Investors’ perception of the independence and competence of ACs will make a difference in their investment decisions.\u0000\u0000\u0000Originality/value\u0000AC independence and competence are importantly crucial for the decision-makers in improving the quality of financial reporting, internal control, and audit. This may lead to an increase in investors’ trust in financial reports and their ability to make favorable investment decisions.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"126 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128444589","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-08DOI: 10.1108/joic-08-2019-0051
G. Pavlidis
Purpose To critically examine two significant developments for the regulation and supervision of virtual assets and virtual assets services providers: the amendment of the Financial Action Task Force (FATF) Recommendation No 15 in October 2018 and the adoption of an Interpretative Note in June 2019. We argue that new FATF standards constitute an appropriate response to money laundering and terrorist financing risks associated with virtual assets, but that they must be followed by firm, consistent and effective implementation at the national level. Design/methodology/approach This paper draws on reports, legislation, legal scholarship and other open source data in order to examine the new FATF standards on virtual assets. Findings The amendment of the FATF Recommendation No 15 in October 2018 and the adoption of an Interpretative Note in June 2019 have been necessary and opportune to forge a global approach to mitigate money laundering risks associated with crypto-assets. The new FATF standards on crypto-asset activities need to be implemented firmly, effectively and consistency to reduce the risk of jurisdiction-shopping by money launderers and terrorism financiers. Originality/value This is one of the first studies examining two important and recent FATF initiatives, the amendment of the FATF Recommendation No 15 in October 2018 and the adoption of an Interpretative Note in June 2019.
{"title":"International regulation of virtual assets under FATF’s new standards","authors":"G. Pavlidis","doi":"10.1108/joic-08-2019-0051","DOIUrl":"https://doi.org/10.1108/joic-08-2019-0051","url":null,"abstract":"\u0000Purpose\u0000To critically examine two significant developments for the regulation and supervision of virtual assets and virtual assets services providers: the amendment of the Financial Action Task Force (FATF) Recommendation No 15 in October 2018 and the adoption of an Interpretative Note in June 2019. We argue that new FATF standards constitute an appropriate response to money laundering and terrorist financing risks associated with virtual assets, but that they must be followed by firm, consistent and effective implementation at the national level.\u0000\u0000\u0000Design/methodology/approach\u0000This paper draws on reports, legislation, legal scholarship and other open source data in order to examine the new FATF standards on virtual assets.\u0000\u0000\u0000Findings\u0000The amendment of the FATF Recommendation No 15 in October 2018 and the adoption of an Interpretative Note in June 2019 have been necessary and opportune to forge a global approach to mitigate money laundering risks associated with crypto-assets. The new FATF standards on crypto-asset activities need to be implemented firmly, effectively and consistency to reduce the risk of jurisdiction-shopping by money launderers and terrorism financiers.\u0000\u0000\u0000Originality/value\u0000This is one of the first studies examining two important and recent FATF initiatives, the amendment of the FATF Recommendation No 15 in October 2018 and the adoption of an Interpretative Note in June 2019.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"78 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122933543","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-06-17DOI: 10.1108/joic-02-2020-0003
Hesham I. Almujamed
Purpose This research aimed to evaluate the predictability of moving-average strategies and examined the validity of the weak form of the efficient market hypothesis (EMH) for securities of banks listed in the Gulf Cooperation Council (GCC) stock markets of Bahrain, Kuwait, Qatar and Saudi Arabia. Design/methodology/approach Several statistical analyses and eight moving-average rules were employed where buy and sell signals were produced by comparing a security price’s short- and long-term moving averages. The study covered the daily closing share prices of 40 GCC-listed banks over the 18-year period ending 31 December 2017. Findings The results suggest that securities of banks in the GCC were not weak-form efficient because share prices were predictable. Investors who traded using moving-average strategies could generate higher profits. Analysis of variance found that securities of Kuwaiti banks were the most efficiently priced. Practical implications The findings supported the idea that profitability depended on the moving-average rules and country chosen. Transaction costs did not affect the returns obtained using different trading rules. Originality/value This work facilitates future evaluation of accounting disclosure environments as well as the market efficiency and the performance of securities in the GCC countries. The performance of moving average rules among representative countries that share similar characteristics was analyzed. Different market participants, including investors, analysts and regulators, can benefit from this study for decision-making. These results suggest that new regulations might be drafted that would improve the timeliness of accounting information and the banks’ level of efficiency.
{"title":"Are share prices of Gulf corporate council banks predictable? A time-series analysis","authors":"Hesham I. Almujamed","doi":"10.1108/joic-02-2020-0003","DOIUrl":"https://doi.org/10.1108/joic-02-2020-0003","url":null,"abstract":"\u0000Purpose\u0000This research aimed to evaluate the predictability of moving-average strategies and examined the validity of the weak form of the efficient market hypothesis (EMH) for securities of banks listed in the Gulf Cooperation Council (GCC) stock markets of Bahrain, Kuwait, Qatar and Saudi Arabia.\u0000\u0000\u0000Design/methodology/approach\u0000Several statistical analyses and eight moving-average rules were employed where buy and sell signals were produced by comparing a security price’s short- and long-term moving averages. The study covered the daily closing share prices of 40 GCC-listed banks over the 18-year period ending 31 December 2017.\u0000\u0000\u0000Findings\u0000The results suggest that securities of banks in the GCC were not weak-form efficient because share prices were predictable. Investors who traded using moving-average strategies could generate higher profits. Analysis of variance found that securities of Kuwaiti banks were the most efficiently priced.\u0000\u0000\u0000Practical implications\u0000The findings supported the idea that profitability depended on the moving-average rules and country chosen. Transaction costs did not affect the returns obtained using different trading rules.\u0000\u0000\u0000Originality/value\u0000This work facilitates future evaluation of accounting disclosure environments as well as the market efficiency and the performance of securities in the GCC countries. The performance of moving average rules among representative countries that share similar characteristics was analyzed. Different market participants, including investors, analysts and regulators, can benefit from this study for decision-making. These results suggest that new regulations might be drafted that would improve the timeliness of accounting information and the banks’ level of efficiency.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"444 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125767543","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-11-04DOI: 10.1108/joic-08-2019-0052
Richard J. Parrino
Purpose This article examines the first action by the US Securities and Exchange Commission to enforce the “equal-or-greater-prominence” requirement of its rules governing the presentation by SEC-reporting companies, in their SEC filings and earnings releases, of financial measures not prepared in accordance with generally accepted accounting principles (GAAP). Design/methodology/approach This article provides an in-depth analysis of the equal-or-greater-prominence rule and the SEC’s enforcement posture in the context of the SEC’s concern that some companies present non-GAAP financial measures in a manner that inappropriately gives the non-GAAP measures greater authority than the comparable GAAP financial measures. Findings Although the appropriate use of non-GAAP financial measures can enhance investor understanding of a company’s business and operating results, investors could be misled about the company’s GAAP results by disclosures that unduly highlight non-GAAP measures. The SEC’s enforcement action signals a focus on the manner in which companies present non-GAAP financial measures as well as on how they calculate the measures. Originality/value This article provides expert guidance on a major SEC disclosure requirement from an experienced securities lawyer.
{"title":"Bringing order to non-GAAP financial measures: SEC sues to enforce “equal-or-greater-prominence” requirement","authors":"Richard J. Parrino","doi":"10.1108/joic-08-2019-0052","DOIUrl":"https://doi.org/10.1108/joic-08-2019-0052","url":null,"abstract":"\u0000Purpose\u0000This article examines the first action by the US Securities and Exchange Commission to enforce the “equal-or-greater-prominence” requirement of its rules governing the presentation by SEC-reporting companies, in their SEC filings and earnings releases, of financial measures not prepared in accordance with generally accepted accounting principles (GAAP).\u0000\u0000\u0000Design/methodology/approach\u0000This article provides an in-depth analysis of the equal-or-greater-prominence rule and the SEC’s enforcement posture in the context of the SEC’s concern that some companies present non-GAAP financial measures in a manner that inappropriately gives the non-GAAP measures greater authority than the comparable GAAP financial measures.\u0000\u0000\u0000Findings\u0000Although the appropriate use of non-GAAP financial measures can enhance investor understanding of a company’s business and operating results, investors could be misled about the company’s GAAP results by disclosures that unduly highlight non-GAAP measures. The SEC’s enforcement action signals a focus on the manner in which companies present non-GAAP financial measures as well as on how they calculate the measures.\u0000\u0000\u0000Originality/value\u0000This article provides expert guidance on a major SEC disclosure requirement from an experienced securities lawyer.\u0000","PeriodicalId":399186,"journal":{"name":"Journal of Investment Compliance","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126995895","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-11-04DOI: 10.1108/joic-08-2019-0048
J. Audette, Walter Draney, J. Koff, Morrison Warren
Purpose To introduce the concepts of interval funds and tender offer funds and compare them to other pooled investment vehicles. Design/methodology/approach This article provides an overview of the interval fund and tender offer fund structures, including the law, regulations and market practices regarding redemptions, liquidity, fees and expenses and other key terms. Findings Interval funds and tender offer funds should be considered by alternative investment managers seeking to expand into public markets or traditional fund managers that seek additional portfolio flexibility. Originality/value In addition to a plain English analysis of the rules and regulations applicable to interval funds and tender offer funds, the article analyzes market practices regarding redemption frequency and amount.
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