Introduction

Welcome to the May 2008 edition of our Financial Services Briefing.

On 8^th April this year the Department of Business, Enterprise and Regulatory Reform (BERR) announced that the Government will in future ensure that important laws come into force on only two dates per year, allowing firms to plan ahead and save time and money.  When we first read this here we checked that BERR's Press Release was not dated 1^st April.  However, it is true and will be widely welcomed.

Business has apparently estimated that up to 10 per cent of time costed at £628 million per year can be saved through changes to the law being announced on two common commencement dates, one in April and one in October each year.

Business and Competitiveness Minister Shriti Vadera is reported as saying:

"We have been working across Government to ensure that these important laws come into force at the same time.  Introducing business regulations on only two dates per year helps companies to plan ahead, save money and encourages greater compliance.

"Certain regulation is necessary to provide vital protections and benefits for people across the UK.

"It also protects businesses, ensuring a level playing field, promoting competition and allowing markets to operate effectively.

"However, we do understand that regulation is a concern for business.  This is why we are driving through one of the most ambitious programmes to ease the burden of regulation on business launched by any government."

It is understood that the key government departments which are to introduce business regulations on the 6^th April and 1^st October are BERR, DEFRA, Communities and Local Government, the Home Office, and the Food Standards Agency.  The Treasury, and the Government's designated agency under the FSMA, the other FSA, do not appear in this list.  Imagine the cost savings that might have been achieved in the financial services industry had they been so included.

Articles

This edition of the Briefing contains in Part II, an analysis by George Walker of the principal UK, EU and international regulatory developments that have taken place in the last two months.

In Part III is a summary of a lecture which Mr Kazuhiko Koguchi, Minister (Finance) at the Embassy of Japan in London gave to a joint meeting of the British Japanese Law Association and the Business Group of the Japan Society in the City of London on 16^th April this year, and which includes discussion of the new Financial Instruments and Exchange Law of Japan.  We are grateful to the Minister for allowing us to reproduce this summary in this issue of Financial Services Briefing.

In Part IV, is an article by John Carrell, Head of Tax at Farrers, and Martin Day on the proposals contained in the 2008 Budget likely to be of interest to fund managers.

In Part V, is an article by Martin Day on Sovereign Wealth Funds, considering their advantages as well as some of the challenges to regulation which they may cause, including  an analysis of the European Commission's and the International Monetary Fund's recent proposals in this area.

In Part VI we include an article by Martin Day on the Société Générale rogue trader affair in France, in which he includes a potted history of rogue trading and poses the question as to whether the affair could have happened here.

In Part VII is an article which Susan Gordon of Deacons has kindly written on the private placement of investment fund securities in Hong Kong, which we hope will also be of particular interest to our funds clients.

In Part VIII is a further article by George Walker which considers the FSA's own review of its supervision of Northern Rock.

Finally, in Part IX is an article by Claudia Rooney of our Employment Team which considers the role of "Without Prejudice" negotiations in employment disputes and some recent case law on the subject.

Our Seminars

As our regular readers will know we run a seminar programme on topical issues in the Spring and Autumn of each year.

Details of our Autumn 2008 programme of seminars will be included in the next issue of the Briefing.

We hope you find this Briefing useful.

Jonathan Bayliss

Financial Services Team

Farrer & Co