a supreme court for the uk August 29, 2009
Posted by Bradley in : dispute resolution , comments closedIn just over a month’s time the UK’s new Supreme Court will start work in a new building (well, a repurposed older building), and it has a new website. In a very British sort of a way, the new website emphasises both continuity and change:
1 October 2009 marks a defining moment in the constitutional history of the United Kingdom: transferring judicial authority away from the House of Lords, and creating a Supreme Court for the United Kingdom in the historic setting of the former Middlesex Guildhall on Parliament Square.
The old Law Lords will move to the new building, becoming the first Justices of the Supreme Court, and they will also sometimes be operating as the Judicial Committee of the Privy Council. But whereas there was just one House of Lords they will now be among a number of Justices of different Supreme Courts around the world.
The aims of the website seem a bit confused. Bits of it seem to be designed to attract attention rather than to assume that people will pay attention because the court is important. The US Supreme Court’s website makes this assumption, and seems more serious by doing so. In contrast, I find the UK Supreme Court page about the significance of the court to the UK to be a bit weird:
The Supreme Court has been established to achieve a complete separation between the United Kingdom’s senior Judges and the Upper House of Parliament, emphasising the independence of the Law Lords and increasing the transparency between Parliament and the courts….
For instance, in their previous role as the Appellate Committee of the House of Lords, the Justices gave landmark rulings on the legality of the Hunting Act 2004 under European law, and whether or not a schoolgirl could be prevented from wearing traditional cultural dress.
The House of Lords never seemed to have much of a problem with independence (although the Law Lords did sometimes interfere a bit in the legislative process and then of course they would have to interpret the results of the legislative process…) but what does this “increasing the transparency between Parliament and the courts” language mean? And doesn’t the reference to just two high profile cases make it seem like what the court will do is just more reality tv (proceedings will be filmed)?
The UK Supreme Court’s website is also very corporate, telling us about the Court’s Executive Team and providing an organisational chart. I care much more about the substance of what the new court does than about who its administrators are.
tracking consultations August 24, 2009
Posted by Bradley in : consultation , comments closedIt would be easier to track consultations if the lists Governments maintain were kept current. The UK’s directgov website (“public services all in one place”) has a page dedicated to a list of government consultation websites. But whereas the link to the Department of Business Enterprise and Regulatory Reform works – when they made the change to the Department for Business Innovation and Skills they put the new name on the top of the old web page, other links don’t work so well. So clicking on the Department for Constitutional Affairs takes you to a page that states that as of 2007 the responsibilities have been transferred to the Ministry of Justice. You have to click again to get to the new page. But the maintenance of the inaccurate list at directgov bothers me. People who know what they are looking for are likely to go straight to the Ministry of Justice website, but others who aren’t sure where to look may get put off by the outdated departmental designations and the need for extra clicking (and this from the successors to the people who promised joined-up government!).
oft proposes expanding use of disqualification for competition violations August 24, 2009
Posted by Bradley in : regulation , comments closedThe UK’s Office of Fair Trading is seeking comments on proposals to improve competition law enforcement by expanding its use of director disqualification. The OFT says that the current approach:
may not sufficiently encourage directors to take positive steps to uncover potentially anticompetitive behaviour or monitor their companies’ competition law compliance. Under the current approach a director who did not know (but ought to have known) that the conduct of the undertaking constituted a breach of competition law is less likely to be subject to a CDO application than one who had reasonable grounds to suspect that it constituted a breach (but who took no steps to prevent it) or one whose own conduct contributed to a breach.
fsa on shareholder activism and regulation August 19, 2009
Posted by Bradley in : consultation , comments closedToday the FSA published on its website a “Letter sent out to trade associations” which discusses “how its rules apply to activist shareholders who wish to work together to promote effective corporate governance in companies in which they have invested”. I assume the reference to trade associations in the plural is to the ISC’s members: ABI, AIC, IMA and NAPF. Others who are interested find out via the web site.
lobbying and transparency August 17, 2009
Posted by Bradley in : consultation , comments closedBodies which seek comments on regulatory proposals don’t always make public the comments they receive, and they are not necessarily consistent in how they deal with comments. Comments are sometimes published by the recipients, sometimes not. Similarly, trade associations which make comments sometimes publish the full text and sometimes do not. For example, I have noted in the past that ISDA makes public only some of its comment letters. But that doesn’t explain why a joint submission to the EU Commission on European financial supervision by SIFMA, LIBA and ISDA should be made public by LIBA, but presented by SIFMA Europe as being only available to its members. And, as of today, the comment letter doesn’t even appear in ISDA’s list of comment letters.
lobbying against financial regulation reform August 14, 2009
Posted by Bradley in : lobbying , comments closedThe Florida Bankers’ Association’s form email for lobbying against regulatory reform has some pretty incoherent sections. For example:
I look forward for the opportunity to work to ensure the regulatory restructuring is properly targeted to the “Shadow Banking Industry”, it carefully be thought out, and to strike the right balance between risk and regulation.
I guess they were in a hurry.
a need for public truth-telling August 14, 2009
Posted by Bradley in : ethics , comments closedThis week I am very troubled by the willingness of public figures to mislead the public about facts (I suppose I should be used to this by now, but I’m not). The debate about health care here in the US isn’t focusing on how to achieve the best care for most people at the lowest cost, but on telling lies about what the government’s proposals involve. It’s bad enough when journalists tell lies (for example the IBD editorial which argued that Stephen Hawking wouldn’t be alive today if he had had to rely on the UK’s NHS). Although given that journalists claim to be subject to ethical standards, perhaps it is that bad.
The IBD’s follow-up to that story provides selected information suggesting that the UK health system is worse than that in the US, referring to OECD data. But the story doesn’t say that, although the US spends more than the UK on healthcare, life expectancy in the US is 78.1 years, almost one year below the OECD average of 79.0 years, whereas in the UK life expectancy was just above the OECD average. In the US, infant mortality was at 6.7 deaths per 1 000 live births in 2006 (higher than the OECD average) whereas the UK was at 4.8 deaths per 1 000 live births in 2007.
But it’s not just about health care, and it’s not just in the US. The UK Food Standards Agency’s statements about the conclusions of a review of organic foods (that “there is little, if any, nutritional difference between organic and conventionally produced food”) seem to be another example. And discussions of the financial crisis also involve manipulations of the facts. For example, Sheila Bair is reported as saying that “the ability to choose between federal and state regulatory regimes played no significant role in the current crisis. But the OCC’s efforts to pre-empt state control of predatory lending was surely a factor in the generation of unsustainable mortgage loans which were used to back securities which turned out to be less reliable than their ratings would have predicted, undermining confidence in asset-backed securities generally and banks’ willingness to lend to other banks.
Of all of these manipulations, those which involve government agencies seem to me to be the most troubling.
the eu, consultation and the crisis August 10, 2009
Posted by Bradley in : consultation , comments closedMeasures which are designed to respond to the financial crisis have been proposed in ways that short-circuit normal processes. The EU’s consultation on proposals to amend capital requirements, for example, has a consultation period of less than eight weeks because:
These amendments form part of the ongoing response of the European Union to the financial crisis and a proposal is scheduled for adoption by the Commission in October. A shorter consultation period is necessary to meet that timetable.
But the political process sometimes slows down the adoption of measures prompted by crisis. A Credit Ratings Regulation, for example, was proposed in November last year but it has not yet been adopted. The consultation for that measure, which began in July 2008 was also truncated:
It was not possible for Commission services to start the consultation period earlier given the fact that the advice of the Committee of European Securities Regulators (CESR) and the report of European Securities Markets Expert group (ESME) were delivered only in May and June this year respectively. These contributions had been prepared on the request of the Commission and offered the necessary basis for the Commission services’ work in this area. Moreover, a substantial amount of time in the preparatory phase has been devoted to eventually unsuccessful attempts to create a self-regulatory solution for the CRA industry.
Neither is it possible to extend the consultation period later in September: in view of the forthcoming elections, the European Parliament has agreed with the European Commission to accept the Commission proposals to be dealt in co-decision only by October 2008 at the latest. This implies that the Commission services will need to launch and finalise an Interservice Consultation in September 2008 in order to meet this deadline. Commission services will compensate the short consultation period by individually encouraging important stakeholders (including regulators, Member States and the CRAs) to participate in the public consultation.
It would be nice to think that the later delays redress some of the defects of the initial consultation, but I’m not so sanguine. Commentators suggest that the Commission may be trying to influence the Basel capital review process by moving quickly.
making trading suspensions effective August 4, 2009
Posted by Bradley in : financial regulation , comments closedThe UK Government is consulting on the idea of making it easier for the FSA to communicate trading suspensions with respect to the OTC market to market participants by making general announcements (by Regulatory Information Service (RIS)) rather than by issuing individual instructions to prevent specific market participants from trading. However, under the new rules the FSA would retain the ability to direct a trading suspension to groups of market participants or to individual firms rather than issuing a general order. The consultation document suggests this power is likely to be used very rarely, in contrast to suspension of trading on regulated markets, and it doesn’t seem to be sensible to require the FSA to send out individual notices where market participants could reasonably be expected to pay attention to regulatory announcements. The way that the document assumes that suspensions directed to some part only of the market contrasts with how I have always thought about suspensions (and see the SEC on suspensions here). And the draft statutory instrument in the document suggests that individual firms may be able to challenge a suspension with respect to their trading. But this suspension power is, under Mifid, an incident not of the regulation of regulated markets but of the regulation of investment services businesses. Despite all the talk about transnational agreements about financial regulation, comparing financial regulation across borders doesn’t get any easier!