After declining to renew the licence for Uber to operate taxis in London in 2017 – a decision which was overturned by a Magistrate - Transport for London (TfL) has repeated that action today and refused to extend the firm’s licence beyond a 15-month extension (with an extra 2-month probationary period added on ) that was granted to it in 2017. As the news broke today, the potential ramifications are yet to be decided, but we shall examine what may happen and the legal processes that are likely to forthcoming. In September 2017, TfL declined to renew Uber’s licence to provide taxi services in London on account of the company’s failure to carry out background checks on its drivers, and also for failing to report serious offences . TfL later granted the firm a 15 month extension, but only on the condition that a number of its practices were improved. A number of those practices focused upon consumer safety and, in today’s announcement, the TfL refused to extend the firm’s extensio

Today’s post is just a small update regarding developments in the sustainability/ESG rating market. We have looked at this growing field before here in Financial Regulation Matters . One of the topics of interest is the movements that the established ‘Big Two’ credit rating agencies – S&P and Moody’s – are making into the market, which experts believe will be worth more than $200 million in annual sales this year and could grow to more than $500 million in the next five years. In the last post, dated the 24 th September, we looked how Moody’s had acquired Video Eiris and Four Twenty Seven as part of their own M&A strategy, whilst S&P had published its own ESG evaluation this year. S&P’s developments come off the back of a number of mergers, with one headline merger including that of TruCost. However, S&P continued that drive over the last few days with the announcement that they were purchasing the ESG-rating arm of RobecoSAM . The terms of the deal have n

It was only earlier in the month that we looked at the comments made by the new Head of the Financial Reporting Council (FRC) regarding the audit oligopoly and the potential of reforms heading its way. In today’s business press, it is being reported that Deloitte – the second-largest British accounting firm – has altered its policies so that now Non-Executive Directors have the final say regarding the level of pay and bonuses that its auditors can obtain. In this short post we will look at these plans and assess the validity of the move with regards to the potential of regulatory reform making its way to the sector. The Financial Times was clear this morning that the move was purely aimed at preventing ‘ the perception of conflicts of interest between its audit and consulting divisions and avoiding a forced split ’. The article says that the Non-Executive Panel – which includes former Barclays Chairman Sir Gerry Grimstone – ‘will review the policies and performance metrics by

In yesterday’s Financial Times , the newspaper ran with a headline that ‘ Leading UK companies at risk of falling short of gender targets ’. Here in Financial Regulation Matters we have discussed the issue of gender diversity within the business arena on multiple occasions, and in relation to a number of different jurisdictions ( here , here , and here ). However, upon reading the article it quickly becomes clear that there are competing narratives at play, whilst there are also narratives and important issues that are not included in the discussion. In this post we will look at the highlights of the article but also the wider issues. The article is based upon the latest report from the Hampton-Alexander Review , a review set up to build on the work developed by the Davis Review . The Davis Review compiled evidence from 2011 onwards regarding the composition of Boardrooms in the largest of FTSE companies (100, 250, and 350) and, in 2015, declared that much improvement had been

Today’s post responds to the news today that a long-running 5-year saga has finally come to an end with the Competition Appeal Tribunal has dismissed the Royal Mail’s challenge to a £50m Ofcom fine for abusing its position . In this post we will review the origins of the fine and the legal developments of the case, up to today’s ruling. In August 2018, the British communications regulator Ofcom announced that it was fining Royal Mail a record £50 million for practices that it undertook to squash the competition being offered by Whistl. Whistl is a delivery management company and was aiming to break into the wholesale mail delivery market in the UK. Whistl had alleged that Royal Mail, in its position as the market leader, had altered its pricing for firms who act as a go-between between businesses and the Royal Mail. Crucially, the Royal Mail had proposed a different set of charges for companies that also wanted to deliver the mail themselves, as well as act as the go-between

In today’s business media, the concept of ‘fuel tankering’ has been highlighted, particularly with regards to the practices of British Airways (although, it is an industry-wide practice) so as to bring forward the story that airlines who claim to consider the environmental impact of their business are, in fact, prioritising profits. In this post we will examine the practice, its effects, and what the industry is claiming it will do to respond to the criticism. ‘ Fuel Tankering ’, as a practice, describes when an aircraft will carry more fuel than is required for the flight in order to reduce the amount required, or remove the need to refuel at all, at a destination airport. The reason that an airline would do this is because different airports charge different prices to refuel at their airport. According to industry research, fuel makes up between 17 and 25% of an airline’s operating expenses, and it has been confirmed that airlines will have software packages that calculate w

After the Financial Crisis, once the actions of the leading credit rating agencies were brought to light, the sense of scepticism and suspicion regarding the actual operating policies of the agencies was at an all-time high. As such, a number of their practices have been scrutinised by onlookers with the view of determining their usefulness, their role, and their overall worth. The most recent example of this can be seen in the recent concerns raised within the business media, and from across the marketplace within certain sectors, regarding how the agencies are viewing something known as ‘add-backs’. In this post we will learn more about these concepts, and evaluate the concerns and their validity. In May, Reuters ran with a story entitled ‘ US investors sound alarm over projected add-backs ’, whilst only on Friday the Financial Times ran with the headline ‘“Add-backs” stoke fears of distorted credit ratings ’. The rating agencies have responded to this issue, with S&P p

The subject of auditors, their regulators, and the conflict of interest that occurs when those auditors provide consultancy services has been well covered here in Financial Regulation Matters . We have examined the issues within the Financial Reporting Council (the UK’s main regulator of audit services) that have seen the regulator’s internal structures change recently. We have also examined a number of issues affecting the audit sector, including the presence and effect of an oligopolistic model , the so-called ‘ expectation gap ’ that exists between how the auditors perceive their role to how the market and society perceives their role, and also how some auditors have started to take voluntary steps to divest or spin-off their consultancy arms . With regards to the last point, we spoke about how either allowing auditors to voluntarily divest, or forcing them to divest with no long-term strategy was a mistake, so the recent comments of the new head of the FRC are worth examining.

Over the years here in Financial Regulation Matters , we have looked at a number of elements of ‘consumer protection’, broadly defined. From predatory lenders to governmental policies that disproportionately affect the poor (and everything in between like the larger culture of credit dependency ), we have seen a number of examples of when capitalism and vulnerable people collide, and vulnerable people are exploited. One area where this concept is visible is within the gambling arena whereby, since 2005 with the Gambling Act , the marketplace for in-person and online gambling has ballooned. However, an influential group of MPs are now seeking to address this issue, and even just that sentiment is already having a demonstrable effect. The headlines in the media run with the fact that, since the influential All Party Parliamentary Group (APPG) for Gambling Related Harm recently published a report calling for the Gambling Act 2005 to be fundamentally reconsidered , shares in Brit

In the second update today, this post will look at two recent stories regarding the credit rating industry. The first update relates to a story we looked at in August which was based on an article I wrote for the Journal of Business Law . The second update relates to the development of a Dodd-Frank era plan that the Wall Street Journal has recently turned its attention to in a particularly scathing manner. Dagong Re-Enters the Chinese Market Last year, one of China’s largest agencies was banned by the China Securities Regulatory Commission from producing ratings for securities for a year, and also from making any changes to its senior management structure for the same period. Additionally, the National Association of Financial Market Institutional Investors suspended Dagong from rating debt instruments for non-financial firms. The agency was criticised for being too close to the rated entities via its consultation services, and also for poor internal management, unqualifi

Here in Financial Regulation Matters we have discussed the potential listing of Saudi Aramco on foreign exchanges on a number of occasions ( here , here , and here ). We have discussed the potential impact that this listing may have had upon the regulatory arenas within a given jurisdiction, but recently the rumours were confirmed in that Saudi Aramco has chosen to list on its own stock exchange. The company will list on the Tadawul – Saudi Arabia’s stock market – but not in a dual-listing with another stock exchange, as New York and London had been hoping for. It has been suggested that the listing, of only 1 or 2 % of the company, will see the company valued at between $1.2 and $2 trillion, making it the most valuable company in the world . Saudi Arabia is hoping to monetise its vast fossil fuel-based reserves and this move will potentially see between $40 and $45 billion raised for the Public Investment Fund, which holds stakes in companies such as Uber. Whilst the claims th