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U.S. SEC to tighten insider trading rules, boost money market fund resilience

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The U.S. Securities and Exchange Commission (SEC) on Wednesday proposed tightening a legal safe-harbor that allows corporate insiders to trade in a company’s shares, and other rules to improve the resilience of money market funds.

The agency also unveiled measures to increase transparency around share buybacks and the complex derivatives at the center of New York-based Archegos Capital Management‘s meltdown earlier this year.

The slew of long-awaited changes mark a milestone for SEC Chair Gary Gensler who has outlined an ambitious agenda to crack down on corporate wrongdoing, improve corporate governance and address inequities in the markets.

The changes, which are subject to public consultation, will affect a swathe of corporate America, from publicly traded companies and their top executives, to banking groups and asset managers including BlackRock, Vanguard, Fidelity and Goldman Sachs.

The proposed tightening of “10b5-1” corporate trading plans in particular was pushed by progressives who have long criticized the rules, saying they allow insiders to game the system and reap windfalls at the expense of ordinary investors.

The plans allow insiders to trade in a company’s stock on a pre-determined date, providing legal protection against potential allegations of insider trading. Critics say it is far too easy to adopt, amend or cancel trades with little scrutiny.

Wednesday’s proposal requires executives to disclose those plans and any modifications. For executives, the SEC also wants a “cooling-off” period of 120 days between the adoption of a plan and the first trade. For companies trading in their own securities, the cooling-off period would be 30 days.

The proposal would also bar insiders from having several overlapping plans, which Gensler said could allow them to cherry-pick favorable plans as they please.

While critics have long said the plans are flawed, trades by executives at Pfizer and Moderna during the COVID-19 vaccine development process renewed scrutiny of such plans and highlighted transparency issues, said Daniel Taylor a professor with expertise on issues related to financial disclosures at the University of Pennsylvania’s Wharton School.

“There is mounting evidence that these plans are, at best, being used in a manner in which they were not intended, and at worst, being abused to enrich corporate insiders,” Taylor said.

The SEC also said it wants companies to disclose share buybacks one business day after execution, in contrast to the current quarterly disclosure rule.

Investor groups welcomed the changes.

“Cleaning up practices that can be a pathway for abusive trades will help restore trust in our markets,” said Amy Borrus, head of the Council for Institutional Investors.

The SEC also detailed changes to address systemic risks in the $5 trillion U.S. money market fund sector, which was bailed out for a second time during the 2020 pandemic-induced turmoil.

Critics say the sector enjoys an implicit government guarantee.

SEC proposed new liquidity requirements, scrapping redemption fees and restrictions, and adjusting funds’ value in line with dealing activity, a process known as “swing pricing.”

While the funds industry has conceded changes are necessary, corporate groups may oppose some of the trading disclosures.

“Some of this appears to be overkill,” said Howard Berkenblit, partner at law firm Sullivan and Worcester. “A long cooling-off period and limits on the number of plans will be less popular and could cause a decrease in use of these plans.”

The SEC also outlined a plan to stamp out misconduct via security-based swaps.

Such derivatives were at the center of the Archegos meltdown, which left Wall Street banks on the other side of the family office’s trades with $10 billion in losses.

Under the new rule, investors will have to publicly disclose such trades.

 

(Reporting by Katanga Johnson in Washington; Editing by Michelle Price, Nick Zieminski, Cynthia Osterman and Leslie Adler)

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Canada’s Denis Shapovalov wins Belgrade Open for his second ATP Tour title

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BELGRADE, Serbia – Canada’s Denis Shapovalov is back in the winner’s circle.

The 25-year-old Shapovalov beat Serbia’s Hamad Medjedovic 6-4, 6-4 in the Belgrade Open final on Saturday.

It’s Shapovalov’s second ATP Tour title after winning the Stockholm Open in 2019. He is the first Canadian to win an ATP Tour-level title this season.

His last appearance in a tournament final was in Vienna in 2022.

Shapovalov missed the second half of last season due to injury and spent most of this year regaining his best level of play.

He came through qualifying in Belgrade and dropped just one set on his way to winning the trophy.

Shapovalov’s best results this season were at ATP 500 events in Washington and Basel, where he reached the quarterfinals.

Medjedovic was playing in his first-ever ATP Tour final.

The 21-year-old, who won the Next Gen ATP Finals presented by PIF title last year, ends 2024 holding a 9-8 tour-level record on the season.

This report by The Canadian Press was first published Nov. 9, 2024.

The Canadian Press. All rights reserved.



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Talks to resume in B.C. port dispute in bid to end multi-day lockout

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VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.

The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.

The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.

The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.

The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.

MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.

In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.

“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.

“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”

In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.

“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.

The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.

“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”

The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.

The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.

A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.

This report by The Canadian Press was first published Nov. 9, 2024.

The Canadian Press. All rights reserved.



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The Royal Canadian Legion turns to Amazon for annual poppy campaign boost

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The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.

Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.

Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.

Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.

“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.

“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”

Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.

“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.

Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.

“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”

But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.

Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.

“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.

Paddon said the initiative is a great idea, but she would like to have known more about it.

The legion also sells a larger collection of items at poppystore.ca.

This report by The Canadian Press was first published Nov. 9, 2024.

The Canadian Press. All rights reserved.



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