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European Edition
23rd June 2022
Tether to launch sterling-pegged stablecoin
Tether is to launch a new stablecoin in July pegged to sterling. The British Virgin Islands-based cryptocurrency company promises that GBP₮ – its fourth pegged cryptocurrency – will be backed one-to-one by the British pound. The Telegraph points out that the launch of a sterling stablecoin should make it easier for British investors to access cryptocurrencies as it will allow trading platforms to more easily accept GBP deposits. However, Tether’s expansion to the UK is likely to draw scrutiny from regulators considering it was fined by US authorities last year for failing to have enough dollar reserves to back its stablecoin one-for-one. A Treasury spokesman said the UK was committed to “putting the UK’s financial services sector at the forefront of cryptoasset technology and innovation” while Tether’s chief technical officer, Paolo Ardoino, said: “We believe that the United Kingdom is the next frontier for blockchain innovation and the wider implementation of cryptocurrency for financial markets.”
The woman who is about to regulate Britain’s internet
Bloomberg profiles Melanie Dawes, the chief executive officer of UK media regulator Ofcom, who will soon be in charge of regulating social media in Britain. The UK is preparing to introduce new legislation designed to protect the public. The Online Safety Bill gives Dawes and Ofcom significant new powers, including to demand information from social media and search engine companies about how they’re tackling illegal and other so-called harmful content. Financial penalties and criminal charges will be handed out to senior managers who don’t comply. Dawes has experienced trolling online, and almost never uses Twitter. “I decided that it wasn’t something that was going to be worth it, to be honest,” Dawes said of Twitter and other social media platforms. “There are a lot of people in public life, including a lot of women in public life, who’ve had a worse time of it than I have.”
FRC proposes auditors publish quality indicators
The UK’s Financial Reporting Council on Wednesday proposed that auditors publish indicators of how well they are performing in a bid to raise standards following a string of corporate failures. "The 11 proposed audit quality indicators (AQIs) would provide stakeholders with a range of comparable indicators on perceived culture within an audit firm, audit quality inspection results, staff workloads, and the level of partners’ involvement in individual audits," the FRC said in a statement. "We propose to also develop a methodological/guidance note to ensure firms describe and measure their AQIs in the same way – we will offer firms the chance to cooperate on developing this guidance after publication of the feedback statement towards the end of 2022."
New subcommittee to scrutinise changes to financial services regulation
A cross-party group of MPs is forming a new subcommittee to scrutinise proposed changes to the way City firms are regulated post-Brexit. The group will be run by Treasury committee members and advised by a panel of experts. “New forms of scrutiny will be required, given the number of regulatory initiatives is likely to grow as regulators assume additional responsibilities following the UK’s exit from the EU,” the Treasury committee said in a statement. Separately, a House of Lords committee has claimed that the breakdown of regulatory co-operation between the UK and EU over financial services has become “collateral damage” in the dispute over the Northern Ireland protocol.
FCA fines insurance broker over corruption failings
The Financial Conduct Authority (FCA) has fined JLT Specialty Ltd £7.9m, stating that the insurance broking firm failed to control financial crimes, including bribery involving over £2.4m. JLT placed business in the London reinsurance market for another company within the group, based in Colombia. The business had been introduced by a third party based in Panama. Between 2013 and 2017 JLT Speciality paid $12.3m in commission to JLT Colombia’s parent company, which in turn paid $10.8m to the third party in Panama, the regulator said. This third party then paid over $3m to officials at a state-owned insurer to help retain and secure their business. Mark Steward, executive director of enforcement and market oversight, said: “Lax controls by JLT Specialty meant, ultimately, that money flowed into the pockets of corrupt officials.”
'We have got to cut taxes to get out of this downturn,' says CBI president
Lord Bilimoria, the outgoing president of the Confederation of British Industry (CBI), has warned that Britain is definitely heading for a recession following the latest inflation data from the Office for National Statistics. In an interview with the Telegraph, Bilimoria says the answer is to cut taxes - more fuel duty cuts and VAT should be cut back from 20% to 5% again for hospitality, replicating the pandemic measure that was restored in April. “The danger of not helping is far worse than the cost of helping,” he says, warning of more “failing businesses and bankrupt individuals” in a deeper recession. The Chancellor needs to stop making the situation worse, Lord Bilimoria continues: “To have the highest tax burden in 70 years I think is absolutely wrong.” It is also wrong to put up corporation tax “in one swoop” from 19% to 25% while the 2.5% increase in National insurance is a tax on jobs – also the wrong thing to do, he says. “This is the time we have got to cut taxes to generate investment and generate growth, because that is what is going to get us out of this.”
Swedish gaming firm hit by war is reorganising
Stockholm-headquartered gaming company G5 Entertainment is overhauling its organisational footprint by opening offices in Georgia, Malta, Montenegro and Turkey after its 1,000-strong workforce, which was split evenly across Russia and Ukraine, was upended by the outbreak of war on February 24th. Vlad Suglobov, the company’s Russia-born CEO who himself is based in California, said the aim of the changes is to diversify the staff base and to offer safe relocation for those forced to flee their home countries. “We will still probably be Eastern European-focused in terms of developer talent,” Suglobov said. “That’s where the company grew out of and this is where people running the company are from.” G5 is a free-to-play gaming specialist with titles such as ‘Sherlock’ and ‘Jewels of Rome.’ The company has significantly more women customers than men.
Crédit Agricole to cut financing of oil and gas emissions
France’s second-biggest listed bank issued a strategy update on Tuesday which includes plans to cut its financing of emissions produced by the oil and gas sector and some other highly polluting industries. Crédit Agricole said emissions produced in the oil and gas sector and financed by the bank will fall 30% by 2030, while the intensity of the emissions it finances in the car industry will drop by half. The lender outlined the plans as part of midterm goals to increase revenues and profits. The bank is now targeting annual net income of €6bn by 2025 in its listed unit, up from €5.4bn in 2021.
German hotel industry says COVID mistakes can’t be repeated
The head of Germany’s DEHOGA hospitality body says lawmakers need to prepare now to be ready for the coming winter, as the country’s hotels seek to recover after the pandemic. "The mistakes of the past cannot be repeated," said DEHOGA president Guido Zoellick, as he urged the state and federal governments to issue clear rules and a unified course on COVID-19 policy for the winter. Zoellick said a lack of workers continues to be a major hurdle to recovery. He wants labour immigration rules for non-EU countries to be simplified. There were roughly 1 million full-time workers in the industry recorded in March 2022, he said - 63,700 fewer than the in same month in 2019 but 61,000 more than in March 2021. "This is encouraging and shows quite a few employees are returning and new employees are also being recruited," said Zoellick.
JD Sports pledges governance overhaul
JD Sports is to overhaul its corporate governance and internal controls following the departure of executive chair Peter Cowgill. The athleisure retailer said that “a number of regulatory issues” had highlighted the need for “a more formalised approach to governance, risk management and the documentation and appraisal of internal controls.” As part of the changes it is splitting the position of chair and chief executive officer, and is currently in the process of filling the positions. JD announced the overhaul along with its results for the year to January 29th.
Investors flag concerns over weakening pay rules for non-execs
Investors have warned government ministers not to water down rules on how non-executives are paid because of concerns that any changes could compromise the independence of their watchdog role.
UK officials weigh options to force London IPO for Arm
The government has considered using the new National Security and Investment Act to coerce SoftBank to list the computer chip designer Arm in London, rather than New York, as officials fear a further weakening of the British tech sector. The Guardian’s Nils Pratley comments on the issue, asserting that the legislation wasn’t designed for such a move. Besides, if the UK was really bothered about long-term ownership of Arm, why did Theresa May’s government approve the sale in the first place? Pratley goes on to recommend a primary London listing plus US-listed depositary receipts, claiming this offers a “best of both worlds” option.
Unilever secretly fought ban on plastic sachets
An investigation by Reuters reveals that Unilever privately lobbied against a ban on plastic sachets used for soap while publicly describing the packaging as “evil” because it could not be recycled. The CEO of the consumer goods giant, Alan Jope, said the business “had to” stop using the sachets to package small portions of soap, detergent and shampoo two years ago but behind the scenes, the company privately lobbied against bans on the packaging that had been proposed in India, the Philippines and Sri Lanka, where they were contributing to mountains of plastic waste and pollution. Separately, Jesse Fried, the Dane Professor of Law at Harvard Law School, writes in the Telegraph on how Unilever’s capitulation to the demands of an anti-Israel lobby group to stop selling Ben & Jerry’s ice cream in the Jewish state has led to the collapse of the business set up by licensee Avi Zinger, who employs hundreds of Arabs, Jews, and Sudanese refugees in Israel to distribute and sell the product.
Credit Suisse and Citco face £430m lawsuit over Chelsea property deal
Anglo-Italian financier Raffaele Mincione’s WRM Group has filed a €500m lawsuit against Credit Suisse and Citco over claims the banks failed to disclose that the €350m used to buy 60 Sloane Avenue in Chelsea came from the Vatican’s “Peter’s Pence” charitable fund. The lawsuit has led to calls for greater transparency around the “origins of money used to purchase high-value property” in Britain.
Most UK employers failing to act against ageism, survey shows
The vast majority of UK employers claim to care about ageism in the workplace but are not acting to combat it, according to research by the Chartered Management Institute.

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