Law and regulation

CHICAGO - It often takes an economic crisis before firms really start thinking about risk management.

The Royal Bank of Canada has pledged $35 million to help cover clients invested in a money market mutual fund that recently broke the buck, Reuters reports.

The Federal Reserve has moved to ease bank ownership thresholds, allowing private equity firms to acquire larger-sized stakes in banking companies along with board representation.

Sallie Krawcheck, the chief executive officer and chairman of Citi Global Wealth Management, is set to leave the firm, according to a statement from Citigroup, the parent company.

Investors began a run on The Reserve's Primary Fund last Monday when Lehman's bankruptcy news made them fearful about the money market funds' $785 million exposure to the investment bank's previously blue-chip commercial paper and medium-term notes that had fallen to zero value.

Fidelity Investments reached agreements with New York and Massachusetts officials to buy back at par $300 million of auction-rate securities from its customers by the end of the year, becoming the first retail brokerage firm to settle alleged fraudulent sales practices in the ARS market.

CHICAGO - In the coming weeks and months, financial officials and members of Congress will be scrambling to revisit a spate of sunsetting tax and accounting laws before the new presidential administration and Congress take over next year.

Identity theft, data loss and other privacy violations are among the leading threats faced by financial institutions. Depending on their nature, they can inflict reputational and brand damage, cause revenue losses and prompt civil liability suits by customers. What's more, regulators are taking an increasingly hard line in these matters. Two new regulatory measures to safeguard investor privacy have far-reaching implications for investment companies, and executives need to take steps to comply.

The Securities and Exchange Commission plans to propose as early as the end of the month rules that would enhance municipal disclosure, SEC Chairman Christopher Cox said in an interview.

Mark Schonfeld, the high-profile New York regional director of the Securities and Exchange Commission, has left the SEC after 12 years of service to join Gibson Dunn as co-chair of the securities enforcement practice group. In this position, he will also work closely with the crisis management and white collar defense and investigations groups.

Taking dead-aim at Middle America, Allstate Corp. has added guaranteed lifetime withdrawal benefits to its target funds.

MINNEAPOLIS - Sen. John McCain is the better choice for the financial services industry not for what he would do as president, but rather for what he would refrain from doing, GOP lawmakers said here this week during the Republican National Convention.

An obscure book about mutual funds has begun to arouse the ire of the industry.

AUSTIN, Texas - Making sure your company's 403(b) retirement plan is in compliance by Jan. 1, 2009 can be a daunting task, especially if you haven't gotten started yet.

AUSTIN, Texas - New 403(b) regulations are coming, whether or not plan sponsors and vendors are ready for the changes.

Although Roth 401(k) features became effective Jan. 1, 2006, few employers immediately implemented them, since they were new and recordkeepers were still developing systems to accommodate the new feature.

PIMCO has named Mohamed El-Erian chief executive officer, a position he currently shares as co-CEO with Bill Thompson, who will be retiring at the end of the year.

Goldman Sachs has gained approval to launch mutual funds in India, joining AIG and JPMorgan, Reuters reports.Adam Broder will lead Goldman Sachs Asset Management Company (India) Pvt Ltd, with Prashant Khemka taking the chief investment officer post, according to a statement from Goldman."India is one of the most important countries to our Asian business and we have a long-term strategic commitment to this market," Broder said.According to data from the Association of Mutual Funds in India, the country's 35 member funds industry managed about $125 billion at the end of July.

England's Financial Services Authority has found no evidence of a "concerted attempt by individuals" to alter share prices in Halifax Bank of Scotland (HBOS) during the raid of its shares earlier this year, according to the Mondaq Business Briefing.HBOS' shares fell by 17% in 20 minutes on March 19 after someone spread false rumors that the bank had asked the Bank of England for an emergency loan. The panic came just days after the collapse of Bear Stearns in the U.S.Many officials suspect that hedge funds may have played a large role both incidents, though regulators have not been able to pin the blame on anyone yet.After four months of investigating, the FSA found no evidence of abuse. The agency stated that it would continue to watch for rumor-mongering "at a high level of intensity," and will take action if any evidence is found.The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

The chairman of Credit Suisse Group's alternative investments business said that his unit plans an international expansion for the recently acquired Asset Management Finance Corp., using joint ventures to enter new regions and sectors.Chairman Brian Finn said that by early next year Credit Suisse needs to put some Asset Management Finance executives internationally in cities like London or Zurich and eventually in Asia, possibly in Singapore or Hong Kong.He discussed the plans in an interview last week, after the Zurich firm bought 80% of the New York investment manager from National Bank Financial of Canada for $384 million of stock.Finn said that he hopes to have some international customers for Asset Management Finance by late next year."We think that there is a big global opportunity," Finn said. "We have developed a lot of joint ventures in Latin America, China, and the Middle East, but as a general matter as we look at investment managers in the U.S., we think the next few deals will be in more-developed markets."