Latest news with #regulation
Bloomberg
4 hours ago
- Business
- Bloomberg
Italy's Market Authority Mulls Pausing UniCredit's Banco BPM Bid
Italy's market regulator Consob is analyzing whether to suspend UniCredit SpA's takeover bid for Banco BPM SpA, after an Italian court challenged some of the requirements imposed by the government on the deal. 'We are reviewing' the matter, Consob Chairman Paolo Savona told reporters in Rome, answering questions on whether the regulator may further delay the deadline for the bid, newswire Radiocor reported. The offer period is currently set to end July 23.
Times
7 hours ago
- Business
- Times
How the FCA uses sandboxes to dig out AI fintech solutions
Zilch, a high-flying consumer credit firm that was founded in 2018 and is valued at more than £1.5 billion, first tested out its services in the 'childlike' safety of what is known as a sandbox. The parent of this play area is the City regulator, the Financial Conduct Authority (FCA), and it allowed Zilch, and the dozens of other fintech firms that took part, to play around, or experiment, without causing consumers any harm or falling foul of any regulations. Zilch's rapid rise since illustrates the valuable role that regulators can play to encourage innovative start-ups to disrupt existing markets with new approaches. Sandboxes are also a vital tool in the armoury of policy makers in their attempts to protect Britain's competitive edge in fast-moving sectors, ranging from life sciences to space exploration. After using the sandbox for 12 months, Zilch launched in 2020 with a licence from the FCA and has since been used by over 4.5 million customers. Desmond McNamara, its chief risk officer, said: 'The sandbox programme allowed us to go through that process of regulation whilst we were building the business. If we had to build the whole business, then apply, it would have been harder.' The FCA has doubled down on its approach with financial services, launching last month what it has called a 'supercharged sandbox' to help facilitate the rapid introduction of AI-powered financial services. In essence, a sandbox gives technology companies a controlled environment to test systems safely. In the case of the AI sandbox, announced last month, the FCA is letting businesses test AI applications such as fraud detection, real-time credit scoring and enhanced customer service. Companies use dummy data created by the FCA, such as fake card numbers and bank account details, and also have access to computing power that they might not otherwise be able to afford. The FCA has struck a deal with the chipmaker Nvidia to provide access to its data centres and also some of its software. The application period is now open and the first companies are expected to start experimenting in October. Alex Kirkhope, partner at Shoosmiths, a law firm which advises companies on how to use sandboxes, said: 'It's a space that allows businesses, especially smaller businesses, the ones who don't have the infrastructure or the access to computing power, to be able to do that themselves, whether they're developing those systems themselves or whether they are looking to deploy them and understand how they operate.' Kirkhope said it was significant that Nvidia has chosen to partner with the regulator on this project. 'Their chips are some of the most advanced processing that exists in the world today. Their involvement, investment and interest in the UK economy and UK fintech space has to be seen as a positive because if they weren't talking to us, they would be talking to China, US, and probably other major European nations,' he said. McNamara from Zilch said the sandbox was particularly attractive to start-ups, which are typically still learning what they can do and what the regulator will allow them to do. 'The regular authorisation process is more naturally tailored to firms who are already authorised and they were adding to their authorisation,' he said. 'Whereas the regulatory sandbox allows firms who are starting out, because there is a more natural startup culture, you don't have to come with the answer to everything at the start, it's much more of an interactive process.' Francesco Fulcoli, the chief compliance and risk officer at Flagstone, a savings platform, is one of those considering using the new testing environment. Flagstone already manages £16.2 billion in people's savings and it is hoping to use the FCA sandbox to test its use of AI for customer support, anti-money laundering and a fully automated process for new customers starting an account. 'Working with many other regulators across the globe, this was a good move. Not many regulators are going that direction,' he said. 'I think it's a good step ahead and will help the fintech environment to keep growing in the UK.' Nicky Goulimis, co-founder of Tunic Pay, a fintech company that helps banks stop fraudulent bank transfers, is another hoping to use the sandbox to help build out its AI. Goulimis said she was particularly encouraged by the FCA's inclusion of agentic AI, which uses reasoning to autonomously make decisions and perform tasks. 'It's going to massively encourage innovation because it's unlocking new use cases that would otherwise not be possible. My interpretation is that this is the FCA saying, we are open for business around agentic systems, which has historically not been the perspective,' said Goulimis. Tunic Pay has already started using AI and is hoping access to the sandbox will help the company collaborate with the government and 'push the imagination' of what can be done with AI agents for scam detection and prevention. • Mandelson wants the UK to make a tech 'moonshot'. Can we do it? Financial services is not the only area of the economy where regulators are using sandboxes to let startups experiment. The Department for Science, Innovation and Technology has funded sandboxes to help industry and academics work on wireless technology, engineering biology and novel space activities. Kirkhope said the latest AI sandbox is just one piece of the puzzle for harnessing AI. 'The government needs to invest in and encourage the build-out of AI infrastructure, particularly compute and data processing, data centre capacity within the UK. And I don't think we should underestimate that challenge. Unless it all works together, we can only get so far,' he said.
Zawya
10 hours ago
- Business
- Zawya
Kuwait tightens grip on foreign property access
KUWAIT CITY - In a new regulatory move aimed at organizing the real estate market and improving the investment environment, Minister of Justice Counselor Nasser Al-Sumait announced that a draft decree has been submitted to the Fatwa and Legislation Department regarding controls on real estate ownership by foreigners through companies listed on the Boursa Kuwait and real estate funds. Al-Sumait explained that the draft decree was prepared under the provisions of Decree-Law No. 7/2025, which regulates real estate ownership, and is now pending approval by the Council of Ministers. The objective is to strike a delicate balance between attracting organized real estate investment and protecting the demographic structure as well as preventing the exploitation of residential properties for purely commercial or investment purposes. The decree takes into account the legal frameworks specific to citizens of the Gulf Cooperation Council countries and preserves the privileges granted to them regarding real estate ownership in Kuwait. The decree includes the following articles: Article 1: Companies listed on the stock exchange with non-Kuwaiti shareholders, as well as licensed real estate funds with non-Kuwaiti unit holders, may own real estate if their objectives include real estate dealings. The provisions of this paragraph do not affect the right of units supervised by the Central Bank of Kuwait or others to own real estate, per the law of the Central Bank of Kuwait or any other applicable legislation. Article 2: Persons licensed by the Capital Markets Authority (CMA) to practice the activity of investment portfolio managers may open and manage investment portfolios for non-Kuwaiti clients. These portfolios may include securities issued by companies listed on the stock exchange whose objectives include real estate dealings or units of real estate funds. Article 3: Listed companies, real estate funds, and investment portfolios licensed by the relevant regulatory authorities in Kuwait are prohibited from engaging in any transactions involving real estate, plots, or land designated for private residential purposes, whether by sale, purchase, mortgage, transfer of rights, authorization to dispose of the property to a third party, or acceptance of such authorization on behalf of a third party, except for the exceptions granted to units supervised by the Central Bank of Kuwait or any other exceptions specified by law. Article 4: Ownership of any real estate shares in kind may not be transferred to non- Kuwaitis in the event of the liquidation of a listed company or real estate fund, without prejudice to their right to receive an amount equivalent to their share of the liquidation proceeds, unless they have legal grounds permitting such ownership following the applicable laws. Article 5: The provisions of this decree shall not affect the treatment of Gulf Cooperation Council (GCC) citizens as Kuwaitis, per the relevant regulations. Nor shall they affect any provisions regulating real estate ownership contained in other laws. Such cases shall remain subject to the provisions of the laws, regulations, and decisions governing them. Article 6: Each minister, within their respective jurisdiction, shall implement this decree, which shall take effect from the date of its publication in the official gazette 'Kuwait Al-Youm'. Arab Times | © Copyright 2024, All Rights Reserved Provided by SyndiGate Media Inc. (
Yahoo
11 hours ago
- Business
- Yahoo
Why Jane Street, a US trading giant is in trouble in India
New York based trading giant Jane Street has been in the eye of a storm over the past few weeks after India's market regulator banned it from the securities market. The regulator Securities and Exchange Board of India (Sebi) has accused Jane Street of indulging in a "sinister scheme", alleging that its "manipulation" of India's stock market has led to small investors trading at "unfavourable and misleading prices". Jane Street has not responded to the BBC's request for comment, but according to the Financial Times, the firm has told staff in an internal email that it was "beyond disappointed" by Sebi's order and planned to challenge it. So who is Jane Street, and what are they accused of? Who is Jane Street? Jane Street was founded by a small group of traders and technologists in a tiny New York office. It is a quantitative trading firm which uses mathematical models and algorithms to decide trading strategies. The company has more than 3000 employees who trade in a broad range of asset classes across 45 countries. According to the Financial Times, the firm accounted for over 10% of North America's equity trading volume in 2023, making it a significant player on Wall Street. What is Jane Street accused of doing? India's stock market has two main segments. The cash market is where investors buy and sell actual shares of companies, owning a piece of the business. And the derivatives market is where traders use tools like futures and options to bet on stocks or commodities, without owning the underlying shares. Sebi claims the suspicious trading activity by Jane Street happened on India's Bank Nifty index which tracks the performance of 12 large Indian banks. The regulator alleges that Jane Street operated in both the cash and derivatives market through different entities. So on a very basic level what is alleged is, one entity bought large quantities of bank shares – pushing up the price of Bank Nifty when the market opened in the morning. Simultaneously, it's claimed, the second entity would bet on the decline in Bank Nifty's value in the derivatives market. On the day of expiry - when the contracts are settled in the derivative market - as the trading session inched towards close of day, Jane Street, it's claimed, dumped the bank shares it bought in the cash market, causing the bank index price to plunge. This, in turn, would pay off the bet taken by its other entity in the derivatives market on a decline in prices, Sebi says. "Such a trade is called 'marking the close' which is considered illegal even in the US," says Deepak Shenoy, CEO, Capitalmind Asset Management Pvt Ltd in Bengaluru city. Mom and pop investors lost money because during the day they'd bought shares at higher levels, as they were pushed up because of the big volumes bought by Jane Street. What has Sebi said? Sebi basically said Jane Street's activities created "a false or misleading appearance of market activity" and attracted "unsuspecting" investors to trade at levels that were "artificial and temporary". By doing this, it was enticing unsuspecting investors to trade in Bank Nifty index options at interim levels that were artificial and temporary. On 3 July, in a lengthy order, Sebi concluded that "the integrity of the market, and the faith of millions of small investors and traders, can no longer be held hostage to the machinations of such an untrustworthy actor". What is Jane Street's defence? As per several global media reports, Jane Street has denied all these allegations of wrongdoing and described the trades as "basic index arbitrage" - the price differential between the price of a stock in the cash market and its corresponding derivatives contract - saying it plans to challenge SEBI's order. What do independent experts think? "Index arbitrage is legal and even Indian broking firms have done this for ages and used algorithms and machines to trade in the market. But what they (Jane Street) did is not index arbitrage," claims says Mr Shenoy. "What they have done is taken a position in two different markets. And this is not arbitrage. You took X on one side and 7X on other side. You sold that X and gained from 7X. That is the problem," he explains. "The same script would play out every week on expiry day when index contracts are settled," says Mayank Bansal, a UAE-based investor who operates in India's derivatives market . "While retail investors lost money expecting a strong finish, Jane Street would have profited by betting on a fall and we are talking of a trade of millions of dollars." "It is not illegal to be smarter than your counterparties in a swap transaction. However if you read the allegations made in the Sebi filing, the whole thing appears to stink very badly," Alexander Gerko, CEO of XTX, a rival firm of Jane Street, wrote on his LinkedIn account. What impact will this have on the broader markets? According to recent data from the regulator, there are nearly 10 million retail investors in the derivatives market. In FY25 they lost 1.05 trillion rupees ($11.6bn, £8.6bn) up from 750bn rupees in FY24. On average, each retail investor lost 110,069 rupees ($1,283; £958) last year. While these losses cannot be attributed to Jane Street directly, Sebi says the firm made $4.3bn from India in a little over two years while small investors were bleeding. "They've rigged the prices for their own convenience," a Mumbai-based investor, who didn't want to be named, alleged to the BBC. "On 17 January 2024, Sebi says Jane Street had its most profitable day. I lost nearly $7,000, my worst single-day loss in a year." The episode exposes deeper regulatory concerns say experts. "SEBI should have acted before so many people lost their money," says Mr Bansal. "The surveillance systems must be strong enough to detect and stop manipulation in real time. Who knows how many more players are operating like this here," he says. So, what happens next? The Indian market regulator says Jane Street has deposited just over $560mn in an escrow account with a lien marked in favour of Sebi, requesting it to lift the temporary trading ban. Sebi says Jane Street's request to remove the trading ban is currently "under examination". But under Indian laws, if these allegations of market manipulation are proven, the US trader could face a fine that is up to three times this amount. Sign in to access your portfolio
The Guardian
11 hours ago
- Politics
- The Guardian
Labour backbench MPs push for tough, wholesale changes to gambling regulation
The embattled Labour leadership is facing a challenge from backbench MPs pushing for wholesale reform of gambling regulation, putting Keir Starmer on a potential collision course with some of the party's largest donors. The Guardian understands that a large and growing group of backbenchers are concerned that ministers may pull punches on further regulation of the UK's betting and gaming sector, which took a record £11.5bn from punters last year. Weeks after Starmer and Rachel Reeves's chastening climbdown on welfare reform, the group are expected to push for a rethink of the government's approach to tackle concerns that more than a million people in Britain may be suffering from a gambling problem. The group's proposals include drafting an entirely new Gambling Act to replace the much-criticised legislation introduced by Tony Blair's government in 2005, including measures to address high volumes of gambling advertising. Sources said there have also been discussions in Westminster about moving responsibility for gambling policy into the department for health, rather than the departure for digital, culture, media and sport, effectively treating it as a public health issue, rather than a leisure pursuit. MPs who won their seats in 2024 are among those making the case for a tougher stance, via the all-party parliamentary group (APPG) on gambling harm, which will launch a wide-ranging inquiry into the future of regulation on Thursday. The group is chaired by Tory grandee Iain Duncan Smith but features a bevy of new Labour MPs, including Beccy Cooper, Sarah Coombes, Alex Ballinger and Andrew Pakes. They have also won support from party veterans such as Dawn Butler and the mayor of Greater Manchester, Andy Burnham, on a parallel drive to hand more power to councils to block the spread of 24-hour slot machine venues. The Fabian Society, the socialist thinktank that co-founded the Labour party, has also published a pamphlet calling for some of the most addictive gambling products to be banned. The groundswell of support for more extensive reforms appears to be at odds with how the government has approached gambling since assuming power. While ministers have rubber-stamped some of the previous government's policies, such as a cap on slot machine stakes and a statutory levy on betting firms, the government has shied away from imposing more controls on advertising, or tackling permissive licensing laws. Labour has longstanding ties to the gambling industry, including the receipt of donations worth more than £400,000 in the four years leading up to the 2024 election. Both Starmer and Reeves have received donations from gambling firms including Bet365 in recent years, while several senior party figures are close to former MP Michael Dugher, who now chairs the betting industry lobby group. Tom Watson, the former Labour deputy leader, became an adviser to Flutter, the owner of Paddy Power, Betfair and SkyBet, after leaving politics. Many backbenchers with an interest in gambling regulation, including several who won their seats in 2024, do not have such connections. They now have a stronger bargaining position after the Labour leadership's authority was weakened by this summer's successful rebellion over welfare reforms. Cooper said: 'I think a new Gambling Act will be needed to meet our manifesto commitment to reducing gambling-related harm. 'To future proof a new Gambling Act – as with the tobacco industry before it – we need to be able to ban the most harmful products, remove all advertising aimed at children and stop sports marketing that minimises the harmful nature of this addictive product. Pakes and Ballinger agreed on the need for a new Gambling Act. Ballinger, a former Royal Marine who has raised concerns about gambling addiction among ex-servicemen and women, said he was particularly concerned about advertising. He said the APPG would 'make the case to our colleagues and we can make the same case to ministers collectively'. Ballinger also said there was a case for discussing whether the health department takes over gambling policy. The Guardian has approached the Department for Culture, Media and Sport for comment.
