FT : FCA to delete most emails after 12 months

FCA to delete most emails after 12 months
Campaigners say the policy risks hampering probes into the regulator that rely on historic email exchanges

The UK financial watchdog has decided to start deleting many emails a year after it receives them, raising concerns among staff and campaigners that it could frustrate efforts to hold the regulator to account.

The Financial Conduct Authority told staff last week it would start automatically deleting emails that remained in their inbox for more than 12 months unless they were considered important enough to be saved in its data repositories.

A notice on the regulator’s intranet page said the new policy “reduces the legal and reputational risk we face” and would start on April 1, according to an employee.

They added that concerns had been raised internally about how the change would affect responses to Freedom of Information Act requests and potential future investigations of the FCA’s conduct.

The FCA said in an emailed statement that the change was “about deleting unnecessary emails, which means we will be able to retrieve information more efficiently”. 

“Any emails that should be retained to comply with regulatory and legal requirements, including the Freedom of Information Act, will be saved,” it said.

The policy would only apply to emails sent or received after April 1, so older emails should not be automatically deleted, the regulator added.

Campaigners said the automatic deletion of emails that are not considered important risked hampering probes into the FCA that often rely on historic email exchanges with the regulator.

“If it transpires that the FCA is attempting to delete emails over 12 months old, then those who believe the FCA to be dishonest will wonder if their motivation for doing so is to cover up dishonesty; and if so there could be one or more scandals that it is trying to hide its handling of,” said Andy Agathangelou, head of campaign group Transparency Task Force.

FCA staff are being trained on the policy to make them aware of which emails need to be stored under the Financial Services and Markets Act. Any information created or received in the course of discharging its regulatory duties must be stored for 25 years.

The regulator requires the companies it regulates to keep their records for a minimum period of time — at least five years for investment companies subject to market rules, indefinitely for pension transfer specialists and three years for other companies.

However, the FCA’s policy on disclosing information is already under scrutiny after the Financial Times reported last month that an internal review had found that it failed to follow FOI rules in 2020 by “inappropriately” delaying responses to requests for months.

Ashley Alder, FCA chair, was also criticised last year after he was found to have broken its rules on disclosing the identity of two internal whistleblowers by sharing emails from them with colleagues.

FT : UK to change ‘unintended’ non-dom hit to overseas bank accounts

UK to change ‘unintended’ non-dom hit to overseas bank accounts
The effect of the provision would be reversed pending ministerial sign-off, a Treasury official said

UK ministers are expected to reverse a technical element of Labour’s non-dom tax changes relating to money held in overseas bank accounts as they steer legislation to enact the October Budget through parliament.

A provision in the Finance Bill would have meant non-doms who stayed in the UK past April incurred tax on money moved through overseas bank accounts which they had earned in prior years when they had been exempt from UK taxes, according to lawyers.

A Treasury official on Monday said changes to reverse the effect of the provision were pending ministerial sign-off.

The Treasury said: “We are committed to engaging with stakeholders to ensure the non-doms reforms work as well as possible. As is usual we are considering any technical comments on the legislation as part of this process.”

The expected change would be the latest tweak to chancellor Rachel Reeves’ move to abolish non-dom status, which also introduced tax on offshore trusts and made non-doms’ worldwide assets liable to inheritance tax.

Last month Reeves announced a minor change to the controversial policy, which tax advisers say has spurred an exodus of the wealthy, to make it easier for non-doms to bring back foreign income and gains at a favourable tax rate.

For years, the UK offered non-doms — wealthy foreigners resident in the UK — the opportunity to avoid British taxes on their overseas income and gains by claiming the “remittance basis”, which meant they only paid UK taxes on monies brought onshore.

As part of her Budget, Reeves abolished the remittance basis so non-doms who remain in the country have to pay tax on new foreign income and gains, like ordinary UK-domiciled taxpayers.

But foreign income and gains previously earned by non-doms under the remittance basis are meant under Labour’s plans to remain untaxed unless brought into the UK.

As part of the non-dom changes in the Finance Bill, the UK would have applied statutory, rather than common-law, rules about capital gains tax to debts. This change would mean debts were considered as situated wherever the creditor is resident.

Money in bank accounts is considered debt owed to the account holder, so making a deposit in a foreign bank account would create a new debt, which the provisions would have classed as bringing the money back into the UK and therefore incurring tax.

The Treasury official said the planned amendments to the Finance Bill would avoid this outcome. They did not specify what change would be made.

Christopher Groves, a partner at law firm Withers, said it was “obviously wrong” if the change meant money put into a bank account anywhere in the world by a non-dom would be treated as having been brought into the UK.

Groves added he thought the change was most likely to be an “unintended consequence” rather than a strategy: “I think that the first draft of the legislation is not perfect, which, given how complicated it is, is not hugely surprising.”

Dominic Lawrance, a partner at law firm Charles Russell Speechlys, told HMRC in a letter earlier this month that it was “astounding” if a non-dom who had used the remittance basis became liable for tax “by transferring cash to a non-UK bank account in his or her name”.

Professional bodies Step, which represents lawyers and accountants, and the Chartered Institute of Taxation have both made representations to HMRC to warn about the change.

The CIOT wrote that “there should not be such different and complicated rules introduced at this late stage to determine what is a taxable remittance”.

FT : Let the OpenAI takeover games begin

Let the OpenAI takeover games begin

Elon Musk, weeks into launching what the FT has dubbed a “hostile takeover” of the US government, has set his eyes on another target: OpenAI, the artificial intelligence start-up that has spurred billions in investment and calls for a new technological age.

Musk, the richest person in the world, and a group of co-investors submitted a near-$100bn bid for the non-profit that controls OpenAI on Monday, throwing a wrench in Sam Altman’s plan to convert the start-up into a for-profit entity.

This isn’t Musk’s first foray with the ChatGPT maker, and in fact, it’s just the latest salvo in a lengthy, bitter rivalry between the Tesla boss and Altman.

Their history goes back to when Musk co-founded OpenAI and invested tens of millions of dollars into the fledgling company before leaving its board in 2018.

Since then, he’s been a vocal critic of Altman’s attempt to convert it into a for-profit business, with Musk saying the plan betrays the company’s founding mission.

On top of all that, the former collaborators are competing to dominate AI — with Musk running his own company xAI — as they each race to raise tens of billions of dollars and build vast data centres.

Shortly after the news broke on Monday, the feud between Musk and Altman spilled further into the open. Or rather, the sparring of words made its way to where so many things are duked out nowadays: social media platform X, formerly called Twitter.

Altman soon posted on the site: “no thank you, but we will buy Twitter for $9.74 billion if you want.”

There are a few big caveats here. “OpenAI doesn’t have to sell,” said Ann Lipton, a law professor at Tulane University. “The non-profit controls [OpenAI], and until that structure changes, it has obligations as a non-profit to pursue its mission.”

There was “nothing Musk can do but use soft persuasive power”, she added.

But with Musk’s plum post at the centre of Donald Trump’s White House — as the leader of the Department of Government Efficiency — that soft power could be significant.

WSJ : China’s Cabinet Pledges to Boost Spending, Attract Foreign Investment

China’s Cabinet Pledges to Boost Spending, Attract Foreign Investment
It will intensify support for trade-in programs while boosting spending in the cultural, sports and inbound-tourism sectors

China’s cabinet pledged to boost domestic consumption this year while vowing to stabilize foreign capital crucial for job creation.

In a weekly meeting chaired by Premier Li Qiang, the State Council said Monday that it will work to increase residents’ incomes, promote sustainable income growth and expand property-related income channels, all of which are aimed at stimulating domestic consumption.

The government didn’t provide specific details on how it plans to raise incomes, but analysts expect that the central government will likely propose enhanced pension and healthcare coverage at the coming annual legislative meeting in March. Next month’s meeting is also expected to unveil China’s economic growth target along with other supporting policies.

As the trade dispute with the U.S. intensifies, Beijing faces mounting pressure to reduce its heavy reliance on exports while bolstering domestic spending, a challenge compounded by weak consumer demand since the end of the Covid-19 pandemic.

In Monday’s meeting, the State Council said the government will intensify support for trade-in programs this year while boosting spending in the cultural, sports and inbound-tourism sectors.

According to data released Monday by the National Development and Reform Commission, the trade-in initiatives launched so far have spurred sales of automobiles, home appliances, furniture and various digital products.

During the eight-day Lunar New Year holiday, these programs generated more than 31 billion yuan in revenue, equivalent to $4.24 billion, with home-appliance and mobile-phone sales surging 166% and 182%, respectively, compared with the previous year.

While these trade-in programs have temporarily lifted spending, economists warn that their impact may gradually fade as the year progresses.

Meanwhile, China’s cabinet reaffirmed its commitment to attracting more foreign investment, a key element in creating jobs, stabilizing exports and upgrading industries.

The government plans to bolster the reinvestment of foreign capital in China, encourage foreign investors to undertake equity investments and broaden the range of industries in which foreign investment is welcomed.

Amid slowing economic growth and rising geopolitical tensions, China’s foreign direct investment fell by 27.1% in 2024, following an 8.0% decline in 2023.

>>> US After Hours Summary: LSCC +10.8% up on earnings, SLQT +34.2% soaring on s

After Hours Summary: LSCC +10.8% up on earnings, SLQT +34.2% soaring on strategic investment; FLNC -37.7% and HLIT -32.6% plunge following quarterly results

After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: LSCC +10.8%, NTB +7.6%, CMP +6.6%, CINF +4.3%, WTS +1%

Companies trading higher in after hours in reaction to news: SLQT +34.2% (signs $350 mln strategic investment), GOLF +7.3% (replacing ROIC in the S&P SmallCap 600), AGEN +5.6% (enters into license agreement with Incyte), NVNI +2.6% (stock offering), IONQ +2.4% (partners with General Dynamics), BKSY +1.3% (establishes launch window with Rocket Lab), INMD +0.9% (enters into license agreement with Great Ormond Street Hospital NHS Foundation Trust), ALSN +0.6% (awarded new contract), LUV +0.4% (appoints new CFO), YEXT +0.2% (acquires Places Scout), MARA +0.2% (postpones special meeting of stockholders)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FLNC -37.7%, HLIT -32.6% (also announces $200 mln buyback plan), AMKR -9.7%, ACLS -9.6%, MITK -8.3%, MEDP -6.3%, ALAB -5.1%, CXW -4.4%, INSP -4.3% (also receives civil investigate demand), SPSC -2.4%, VNO -1.7%, ARWR -1.6%, SSD -1.5%, CMCO -1.4% (also to acquire Kito Crosby Limited from KKR for $2.7 bln), BRX -1.3%, COTY -1%, VRTX -0.6% (also, COO to retire)

Companies trading lower in after hours in reaction to news: SERA -6.7% (stock offering), POWW -4.5% (to delay 10-Q filing), HLNE -2.7% (stock offering), HESM -2.5% (stock offering), UVV -0.2% (to delay 10-Q filing; provides DecQ guidance), MSFT -0.1% (Sam Altman rejects Elon Musk's buyout offer in X post)

>>> US Close Dow +0.38% S&P +0.67% Nasdaq +0.98% Russell +0.36%

Closing Stock Market Summary
The stock market kicked off the week with an upbeat start, bouncing back from Friday's declines in a buy-the-dip trade. The Nasdaq Composite jumped 1.0%, the S&P 500 rose 0.7%, and the Dow Jones Industrial Average closed 0.4% higher. The major indices closed their highs of the day with many stocks participating in index gains.

Mega-cap stocks played a crucial role, leading the upside charge. NVIDIA (NVDA 133.57, +3.73, +2.9%), Microsoft (MSFT 412.22, +2.47, +0.6%), and Amazon.com (AMZN 233.14, +3.99, +1.7%) were standouts from the space. The Vanguard Mega Cap Growth ETF (MGK) closed 1.0% higher.

Earnings reports also fueled buying interest. McDonald's (MCD 308.42, +14.12, +4.8%) posted strong results, along with Rockwell Automation (ROK 302.34, +33.94, +12.7%) and Monday.com (MNDY 326.58, +68.34, +26.5%).

Sentiment wasn't impacted by President Trump's announcement of new 25% tariffs on steel and aluminum. Stocks directly linked to these metals saw noticeable gains. Nucor (NUE 137.53, +7.27, +5.6%) and Alcoa (AA 36.92, +0.80, +2.2%) were among the winners.

The New York Fed's Survey of Consumer Expectations also had little impact on the equity market. Inflation expectations remained stable, with one-year and three-year projections unchanged at 3.0%, while five-year expectations edged up by 0.3% to 3.0%.

On the bond side, yields were steady. The 10-year Treasury yield settled one basis point higher at 4.49%.
There was no US economic data of note today and tomorrow's calendar is limited to the January NFIB Small Business Optimism survey at 6:00 ET.
  • Dow Jones Industrial Average: +4.5% YTD
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