News in brief

MIS industry on watch list

Australia's corporate watchdog has put unlisted property schemes, credit ratings agencies, and listed investment funds on its watch list in response to concerns sparked by the ongoing financial market turmoil. The Australian reported that Australian Securities and Investments Commission (ASIC) priorities in the coming months will be its scrutiny of corporate disclosure of complicated financial assets and surveillance of illegal trading activities, including insider trading, market manipulation, and false rumours. ASIC commissioner Belinda Gibson said ASIC is looking closely at sections of the managed investment scheme (MIS) industry to see how businesses operate and 'how the market should be informed about the business models'.

China tops IPO chart

China continues to lead the world in initial public offering (IPO) activity, despite a global slowdown. Ernst & Young reports that while global IPO activity has fallen significantly year on year, it was relatively stable in the second quarter of 2008. Commenting on the China market, Philip Leung, Greater China IPO leader, said: 'The number of China IPOs in the second quarter increased by 90% compared with the first quarter, although total funds raised fell to US$6.2bn. This shows that smaller companies that require funds to finance their next stage of growth are still coming to the market. The pipeline of potential deals remains robust.'

Directors vulnerable to ID theft

Company directors and the self employed are particularly vulnerable to identity theft and related fraud, risk advisers Marsh have warned. The availability of accessible material on the internet has made it much easier to find useable information about them, Marsh believes. 'It does not require much detective work on the part of the fraudster to come up with a convincing insight into a victim,' says Adrian Saunders, Marsh head of private client services.

Reforms praised in Hong Kong

Hong Kong has a good legal structure to combat money laundering and terrorist financing, according to the Financial Action Task Force (FATF).

Recommendations made by the intergovernmental body help bring about legislative and regulatory reform to combat money laundering and terrorist financing globally. After recently completing a standards assessment on the region, FATF concluded that Hong Kong’s money-laundering system meets requirements fully and has a satisfactory conviction rate. Terrorist funds have not been detected in Hong Kong, it noted.

FATF observed that Hong Kong's extradition regime is uncomplicated and not subject to unreasonable grounds for refusal. It said the city's authorities provide a wide range of international cooperation to their foreign counterparts and have effective gateways to facilitate prompt and constructive exchange of information.

UK HMRC accounts qualified for sixth time

HM Revenue & Customs' accounts have been qualified for the sixth successive year because of high levels of error and fraud in the payment of tax credits. Between £1.3bn and £1.5bn were overpaid to claimants in 2006/7, a reduction of £700m against 2005/6. At the end of the 2007/8 financial year, some £4.3bn of overpayments remained outstanding and due for recovery.

Bank fraud losses at record high IN UK

Fraud against banks is at an all-time high and expected to rise further, according to the latest KPMG Fraud Barometer. In the first six months of 2008, more than £630m of fraud cases came to court, compared with £421m in the previous half year. More than half of the 128 cases in the first half of 2008 were against financial services firms, including many involving accounting fraud. More than £20m of mortgage fraud came to court.