More On Legal & Compliancefrom The Advisor's Professional Library
- The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
Britain faces yet another inquiry into price rigging–this time in energy markets. The Financial Services Authority has said it is investigating allegations that the country’s six largest power companies are involved in rigging the prices of natural gas and that the benchmark prices produced by a single company are unreliable.
Bloomberg reported Tuesday that after price-reporting company ICIS Heren said in October that “unusual trading activity” may have affected gas prices, the FSA undertook an investigation. Next-day natural gas prices in the U.K. have gone up by 24% in 2012 during seasonal demand increases as well as supply disruptions from Norway.
Energy Secretary Ed Davey said in the report that the government is “extremely concerned” about the possibility that manipulations of the wholesale natural gas market may have been perpetrated by some of the largest power companies in the country.
In a statement, Davey said that the FSA had notified the government of its investigation and that his office would not interfere. The statement said in part, “I am extremely concerned about these allegations and will be keeping in close touch with the regulators while they get to the bottom of this.”
A Guardian report said a former trader working as a reporter gathering prices had expressed concern over irregularities he saw on Sept. 28, which is an important date because it is the end of the financial year in the gas industry and can therefore have an outsized influence on future prices.
The report also said that the six largest companies were among those making an effort to boost or cut gas prices. The report also said that key benchmarks in the market are arrived at by a single price-reporting company, which makes them both unreliable and vulnerable to interactions between traders and reporters.
Energy regulator Ofgem said in the report that it had been provided data "relating to trading in the gas market and is looking into the issue." It added that, while it had limited powers in that venue, it would "consider carefully any evidence of market abuse brought to our attention as well as scope for action under all our other powers."
The energy secretary’s office has said that it is “in the process of giving Ofgem more powers to tackle abuses.”