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Oct 16, 2018

Theresa May appeals to EU to keep Brexit door open | Politics I The Guardian

Heather Stewart

Theresa May will urge EU leaders in Brussels on Wednesday to keep the door open to continuing Brexit negotiations, after a two-and-a-half hour cabinet meeting that underscored the challenge of bridging the gap between London and Brussels in the days ahead.
May told her colleagues on Tuesday: “If we as a government stand together and stand firm, we can achieve this.”
But a string of ministers intervened to stress the importance of time-limiting the Irish backstop and ensuring it did not separate Northern Ireland from the rest of the UK – both areas where the UK and the EU27 remain at loggerheads.
The attorney general, Geoffrey Cox, said any Northern Ireland-only arrangements for customs after Brexit could mean the province was “torn out of the UK” and leave it “controlled by the EU,” according to one source.
No 10 said cabinet members endorsed May’s call to “maintain the integrity of the union” between Great Britain and Northern Ireland, which the prime minister told the cabinet was threatened by the EU’s proposed version of the backstop.
The spokesman said the prime minister had told her political colleagues it was “not possible for her or any UK prime minister to sign up to an arrangement that would lead to a customs border down the Irish Sea”.
One cabinet minister said: “There was a general wish to get the DUP onside, which hopefully our robust line on the integrity of the UK will help with.”
The chief whip, Julian Smith, told ministers that the prime minister would not get House of Commons approval for a backstop that could apply indefinitely.
Cabinet Brexiters believe May’s chief negotiator, Olly Robbins, was prepared to sign up to fresh compromises on Sunday, before the Brexit secretary, Dominic Raab, arrived in Brussels and rejected the latest proposals.
Michael Gove reportedly insisted at Tuesday’s meeting that the government must take legal advice on the implications of any fresh backstop text, which will be enshrined in the withdrawal agreement.
Complaining that the significance of the backstop had been underplayed by officials in December, Gove told colleagues: “Fool me once, shame on you; fool me twice, shame on me.” He warned that if the government accepted getting on the, “customs union train,” it would need to know “when to get off”, according to Tory sources.
Others insisting on assurances that the UK could not become trapped in a customs union indefinitely included Jeremy Hunt, Penny Mordaunt and Andrea Leadsom, sources said.
With May accepting the principle, and no draft text for ministers to scrutinise, there were none of the feared resignations, but the demand for legal advice could limit negotiators’ wriggle room in the days ahead.
Drafting a time-limited backstop creates a formidable conundrum for negotiators because the December agreement, signed up to by both sides, said it must operate “unless and until” alternative arrangements that prevent a hard border had been put in place.
May’s official spokesman said cabinet members had agreed the UK “cannot be kept in the backstop indefinitely” and ministers had discussed “the need for a mechanism to clearly define how that backstop will end”.
Brussels-watchers say any mechanism controlled by the UK would be anathema in Brussels. Mujtaba Rahman, of Eurasia Group, said: “It’s simply inconceivable that the EU will hand the UK the right to exit the backstop at a time of the UK’s choosing.”
Cabinet members had been urged to rise up and rebel against the prime minister’s Brexit strategy by the former Brexit secretary David Davis over the weekend.
Cabinet members including Andrea Leadsom, the leader of the House of Commons, have privately said the UK should insist on a firm date for ending the backstop.
Similar concerns were voiced by Conservative Brexiters in the Commons on Monday, when May updated MPs on the status of the Brexit negotiations, with the former work and pensions secretary Iain Duncan Smith asking the prime minister: “How long does she think this temporary arrangement might last and, most importantly, who would make the final decision on when it ends?”
A backstop is required to ensure there is no hard border in Ireland if a comprehensive free-trade deal cannot be signed before the end of 2020. May has suggested to the EU that the whole of the UK would remain in the customs union after Brexit, but Brussels has said it needs more time to evaluate that proposal.
As a result, the EU is continuing to insist on having its own backstop, which would mean Northern Ireland remaining in the single market and customs union in the absence of a free-trade agreement, prompting fierce objections from Tory hard Brexiters and the Democratic Unionist party, which props up her government.
The shadow Brexit minister, Jenny Chapman, said: “It is simply extraordinary that the cabinet can’t agree what its plan for Brexit is. If the cabinet can’t make a decision on Brexit, then what on earth is the point of it? Theresa May is in office, not in power.”

SEC Provides Regulatory Relief and Assistance for Hurricane Victims I SEC I Press Release.


Washington D.C., Oct. 16, 2018 —
The Securities and Exchange Commission today announced that it is providing regulatory relief to publicly traded companies, investment companies, accountants, transfer agents, municipal advisors, and others affected by Hurricane Michael.  The loss of property, power, transportation, and mail delivery due to the hurricane poses challenges for some individuals and entities that are required to provide information to the SEC and shareholders. 
To address compliance issues caused by Hurricane Michael, the Commission issued an order that conditionally exempts affected persons from certain requirements of the federal securities laws for periods following the weather event.
The Commission also adopted interim final temporary rules that extend the filing deadlines for specified reports and forms that companies must file pursuant to Regulation Crowdfunding and Regulation A.
* * *
In connection with the Commission relief, issued in the order and interim final temporary rules, the Commission staff will take the following no-action positions with respect to affected parties’ obligations under the Exchange Act, the Securities Act, and the Investment Advisers Act:
  • For purposes of eligibility to use Form S-3 (and for well-known seasoned issuer status, which is based in part on Form S-3 eligibility), a company relying on the exemptive order will be considered current and timely in its Exchange Act filing requirements during the relief period if it was current and timely as of the first day of the relief period. After the relief period, a company will continue to be considered current and timely if it files any required report on or before Nov. 23, 2018
  • For purposes of the Form S-8 eligibility requirements and the current public information eligibility requirements of Rule 144(c), a company relying on the exemptive order will be considered current in its Exchange Act filing requirements during the relief period if it was current as of the first day of the relief period.  After the relief period, a company will continue to be considered current if it files any required report on or before Nov. 23, 2018
  • Companies that receive an extension on filing Exchange Act annual reports or quarterly reports pursuant to the order will be considered to have a due date of Nov. 23, 2018.  As such, those companies will be permitted to rely on Rule 12b-25 if they are unable to file the required reports on or before the due date.
  • During the period from Oct. 10, 2018 to Nov. 21, 2018, a registered open-end investment company and a registered unit investment trust will be considered to have satisfied the requirements of Section 5(b)(2) of the Securities Act to deliver a summary or a statutory prospectus, as applicable, to an investor, provided that: (1) the sale of shares to the investor was not an initial purchase by the investor of shares of the company or unit investment trust; (2) the investor’s mailing address for delivery, as listed in the records of the company or unit investment trust, has a ZIP code for which the common carrier has suspended mail service, as a result of Hurricane Michael, of the type or class customarily used by the company or unit investment trust, to deliver summary or statutory prospectuses; and (3) the company, or unit investment trust, or other person promptly delivers the summary or statutory prospectus, as applicable either (a) if requested by the investor, or (b) by the earlier (i) of Nov. 23, 2018 or (ii) the resumption of the applicable mail service.
  • A registered investment adviser will be considered to have satisfied Form ADV filing requirements under Section 204(a) of the Advisers Act and Rule 204-1 thereunder, if:  (1) the registrant’s Form ADV filing deadline falls within the period from Oct. 10, 2018 to Nov. 21, 2018; (2) the registrant was or is not able to meet its filing deadline due to Hurricane Michael; and (3) the registrant makes the required Form ADV filing by Nov. 23, 2018.  
  • During the period from Oct. 10, 2018 to Nov. 21, 2018, a registered investment adviser will be considered to have satisfied the requirements of Section 204 of the Advisers Act and Rule 204-3(b) thereunder to deliver the written disclosure statements required thereunder to its advisory client, provided that:  (1) the client’s mailing address for delivery, as listed in the records of the investment adviser, has a ZIP code for which the common carrier has suspended mail service, as a result of Hurricane Michael, of the type or class customarily used by the adviser to deliver written disclosure statements; and (2) the investment adviser or other person promptly delivers the written disclosure statement either (a) if requested by the client, or (b) at the earlier of (i) Nov. 23, 2018 or (ii) the resumption of the applicable mail service.
Some companies and other affected persons may require additional or different assistance in their efforts to comply with the requirements of the federal securities laws and therefore are encouraged to contact Commission staff.  The Commission staff will address these and any disclosure-related issues on a case-by-case basis in light of their fact-specific nature. 

SEC Investigative Report: Public Companies Should Consider Cyber Threats When Implementing Internal Accounting Controls: SEC I Press Release

Washington D.C., Oct. 16, 2018 —
The Securities and Exchange Commission today issued an investigative report cautioning that public companies should consider cyber threats when implementing internal accounting controls. The report is based on the SEC Enforcement Division's investigations of nine public companies that fell victim to cyber fraud, losing millions of dollars in the process.
The SEC's investigations focused on "business email compromises" (BECs) in which perpetrators posed as company executives or vendors and used emails to dupe company personnel into sending large sums to bank accounts controlled by the perpetrators. The frauds in some instances lasted months and often were detected only after intervention by law enforcement or other third parties. Each of the companies lost at least $1 million, two lost more than $30 million, and one lost more than $45 million. In total, the nine companies wired nearly $100 million as a result of the frauds, most of which was unrecoverable. No charges were brought against the companies or their personnel.
The companies, which each had securities listed on a national stock exchange, covered a range of sectors including technology, machinery, real estate, energy, financial, and consumer goods. Public issuers subject to the internal accounting controls requirements of Section 13(b)(2)(B) of the Securities Exchange Act of 1934 must calibrate their internal accounting controls to the current risk environment and assess and adjust policies and procedures accordingly. The FBI estimates fraud involving BECs has cost companies more than $5 billion since 2013.
"Cyber frauds are a pervasive, significant, and growing threat to all companies, including our public companies," said SEC Chairman Jay Clayton. "Investors rely on our public issuers to put in place, monitor, and update internal accounting controls that appropriately address these threats."
Stephanie Avakian, Co-Director of the SEC Enforcement Division, said, "In light of the facts and circumstances, we did not charge the nine companies we investigated, but our report emphasizes that all public companies have obligations to maintain sufficient internal accounting controls and should consider cyber threats when fulfilling those obligations."
The issuance of the SEC's report coincides with National Cybersecurity Awareness Month.
In consultation with the Division of Corporation Finance and the Office of the Chief Accountant, the SEC's investigations were conducted by Brent Wilner, Creighton Papier, and Maria Rodriguez, and supervised by Diana Tani, John Berry, and Michele Layne of the Los Angeles Regional Office.

After Hours: After-hours buzz: Netflix, IBM and more I CNBC

Christine Wang

Reed Hastings, chief executive officer of Netflix Inc., right, applauses during a news conference in Tokyo, Japan.
Akio Kon | Bloomberg | Getty Images
Reed Hastings, chief executive officer of Netflix Inc., right, applauses during a news conference in Tokyo, Japan.
Check out which companies are making headlines after the bell on Tuesday:
Netflix surged as much as 15 percent after-hours following third-quarter earnings that blew Wall Street estimates out of the water. The streaming giant said it added 1.09 million subscribers domestically and 5.87 million overseas. Analysts had projected just 673,800 and 4.46 million, respectively, according to FactSet consensus estimates.
The company also posted adjusted earnings per share of 89 cents. That figure also topped the 68 cents projected by analysts, according to a Refinitiv consensus estimate.
IBM fell about 4 percent post market, after the company reported lower-than-expected revenue. The legacy technology company reported adjusted earnings of $3.42 per share on revenue of $18.76 billion. Analysts polled by Refinitiv had expected earnings per share of $3.40 on $19.10 billion in revenue.
United Continental gained about 5 percent after reporting a more than 11 percent jump in revenue. The parent of United Airlines reported adjusted earnings per share of $3.06 on $11 billion in revenue. Wall Street had expected earnings of $3.07 a share on revenue of $10.93 billion, according to Refinitiv consensus estimates.
CSX rose as much as 1 percent after the company posted better-than-expected earnings and revenue. The railroad operator reported adjusted earnings of $1.05 a share on $3.13 billion in revenue. Wall Street had projected earnings of 94 cents a share on revenue of $3.05 billion, according to Refinitiv consensus estimates.

EU FX I Currencies I Dollar weakens as stock gains show improving risk sentiment I CNBC


The U.S. dollar index dropped to more than two-week lows on Tuesday while emerging market currencies outperformed, as rising stock markets reflected improving risk appetite.
U.S. stocks opened higher, led by technology stocks, as upbeat earnings from blue-chip companies helped ease jitters over the impact of an ongoing U.S.-China trade war and other global issues on corporate profits.
It seems as if we have a risk on tone. Equity prices seem to be rising globally again and reversing a little bit of the panic that we saw last week, said Mark McCormick, North American head of FX strategy at TD Securities in Toronto.
The greenback was supported last week as benchmark 10-year Treasury yields surged to a seven-year high of 3.26 percent, while stocks tumbled. Yields are now consolidating at around 3.16 percent, reducing demand for the dollar.
The better risk tone on Tuesday also reduced demand for safe haven currencies the Japanese yen and Swiss franc. It's a lack of negative headlines today, which if anything else is just a change from what we've seen, said Erik Nelson, a currency strategist at Wells Fargo in New York.
The risk sensitive emerging currencies are particularly outperforming while the yen and the Swiss franc are on the soft side. Concerns about rising tensions between Western powers and Saudi Arabia weighed on markets on Monday.
Saudi Arabia has been under pressure since a prominent Saudi journalist Jamal Khashoggi, a critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Istanbul.
U.S. Secretary of State Mike Pompeo met Saudi Arabia's king and crown prince to discuss the disappearance of Khashoggi on Tuesday and Turkey's foreign minister said the envoy would bring information about the case to Ankara.
Data on Tuesday showed that U.S. industrial production increased for a fourth straight month in September, boosted by gains in manufacturing and mining output, but momentum slowed sharply in the third quarter.
The New Zealand dollar advanced against the greenback as the domestic inflation rate came in higher than expected in the third quarter.

Bonds & Fixed Income Report: US Treasury yields little changed after job openings hit record in August I CNBC

Thomas Franck

U.S. government debt yields were little changed Tuesday after the Labor Department said that the number of job openings in the United States raced to a record in August.
The number of openings hit a series high of 7.1 million on the last business day of August, the government said, adding to the existing belief that the U.S. labor market is at one of its tightest points in a generation.
The yield on the benchmark 10-year Treasury note initially rose on the back of the data, but later turned lower. At around 1:13 p.m. ET, the yield traded at 3.158 percent, while the yield on the 30-year Treasury bond was also little changed at 3.335 percent. Bond yields move inversely to prices.
In the Bureau of Labor Statistics's most recent report on the employment situation the unemployment rate in the U.S. dropped to 3.7 percent, a level not seen in nearly 50 years. Closely-watched average hourly earnings rose 8 cents — or 0.3 percent — over the month, matching August's gain.
The hot job reports may also portend acceleration in wage growth, which could be a worry for the Federal Reserve trying to keep a lid on inflation.
"The report has been trending higher for a long time now, so I think the markets got immune to a lot of these prints, but I'd like to think the overall data is still fantastic, because the quit rate was higher in the low-wage categories such as leisure and hospitality," said Thierry Wizman, global interest rates and currencies strategist at Macquarie Group.
"There was always sort of a problem trying to fill skilled labor, but now it looks like it's getting a bit more problematic to fill even the lower-paying positions," Wizman added.
The recent economic data helped the Fed's policymaking arm defend its third quarter-point increase to the federal funds rate in September. The central bank also upped its anticipation for economic growth this year to 3.1 percent, citing manageable inflation and an unemployment rate of 3.9 percent.
The Fed and markets both anticipate a fourth rate hike in December.