CLOs

The UK government has for the first time issued a set of standards for asset managers engaged in the sustainable investment sector, reports Reuters (28 October, Jessop). “Transforming our financial system for a greener future is crucial as we build back better from COVID-19 and to meet our legally binding target for net zero carbon emissions by 2050,” said Kwasi Kwarteng, minister of state for business, energy, and clean growth. Hammered out by the United Kingdom's national standards body, the BSI, along with the Department for Business, Energy, and Industrial Strategy (BEIS) and representatives of the UK financial services industry, the new voluntary standard sets out the requirements to establish, implement, and manage the process of integrating responsible and sustainable considerations into investment management. Data from the Investment Association show what it termed responsible investment funds under management in UK funds stood at US$47 billion as of the end of August, with total funds under management in these type of funds increasing 89 percent over the 18 months to June 2020.

From "United Kingdom Issues Sustainable Finance Best Practice for Asset Managers"
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Lloyd's of London has launched an internal investigation into its role in the transatlantic slave trade in part to determine whether it is on the hook to pay reparations, according to the Wall Street Journal (28 October, Clark). The insurance market faces pressure from Black employees and racial-equality campaigners to open up about the slave trade in the 18th and 19th centuries. Lloyd's Chairman Bruce Carnegie-Brown said he is talking to academic and cultural institutions to investigate its archive, but he said that the risk of reparations was unclear because the company is comparable to a stock market "that just convenes the buying and selling of insurance by other entities." Lloyd's was unsuccessfully sued by descendants of slaves in the United States more than a decade ago.

From "London's Centuries-old Insurance Market Investigates Its Slavery Role"
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Warehouse operators have moved seasonal hiring earlier in the year because of surging online sales, according to employers and staffing firms canvassed by Bloomberg (27 October, Dmitrieva). Many are also converting gig-economy positions to full-time roles at a faster rate, raising wages, and lowering education and experience requirements. In September, 1.25 million people were on payrolls in the warehousing and storage industry, about 46,000 more than in February. The industry is one of the few sectors where employment is higher than before the pandemic. Clients in the logistics industry are cutting experience requirements and boosting recruitment budgets, signaling higher wages, said Todd Bavol, CEO of Integrity Staffing Solutions. While some of the hiring activity is seasonal, the higher rate of conversion to full-time work bodes well for the labor market long term.

From "Warehouse Jobs Top Pre-COVID-19 Levels as Online Sales Boom"
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The Italian Competition Authority on Wednesday opened an investigation into Google over alleged abuse of its dominant role in the country’s online ad market, reports the Associated Press (28 October), adding to the global scrutiny the US tech giant is currently experiencing. The watchdog said it suspects Google is using the vast amount of personal data it collects to prevent rivals in the digital advertising market from competing effectively. On Tuesday the competition authority and the Italian tax police carried out a joint inspection of Google’s offices. The authorities are reportedly focusing on the availability and use of data for display ads, and are also probing whether Google discriminated against competitors by refusing to allow them to use third-party tracking tools. Google pledged to "continue to work constructively with the Italian authorities," adding that it follows EU data privacy rules.

From "Italian Regulator Investigates Google Over Digital Ads"
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A lawsuit filed by former JPMorgan Chase secretary Wanda Wilson test the limits of race discrimination in the workplace, reports the New York Times (28 October, Flitter). Wilson, who is Black, alleged that she spent almost 20 years brushing aside workplace remarks about her race before raising concerns after a new colleague started bullying her in 2016. Wilson said she complained to superiors and tried to find a new job at the bank, but after JPMorgan fired her, she filed suit on allegations of race discrimination and retaliation. JPMorgan, which has defended its conduct, attempted to have the lawsuit dismissed, but a judge ruled the two parties should engage in mediation. Wilson's experience highlights the complicated nature of race discrimination suits, as casual interactions between colleagues can carry racist undertones. Such allegations of racism can be difficult to verify. The JPMorgan lawsuit comes as Wall Street sustains criticism for how it treats people of color, and Black employees in particular.

From "What Counts as Race Discrimination? A Suit Against JPMorgan Is a Test"
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A coalition of trade groups in online advertising has asked France's competition authority to stop Apple from applying privacy controls early next year that would cripple targeted advertising on iPhones, reports the Financial Times (28 October, Barker, McGee, Abboud). Under Apple's plans, many apps will need to explicitly ask users whether they agree to their behavior being tracked across other apps and websites, a move that would likely reduce access to the identifiers that are the backbone of mobile advertising. The complaint to the French Competition Authority claims that Apple is using the guise of protecting privacy to stifle competition by going beyond European data protection laws. Apple said its plan has received support from privacy watchdogs and advocates. "A user's data belongs to them and they should get to decide whether to share their data and with whom," the tech giant said.

From "Apple Hit with Antitrust Complaint in France Over Privacy Controls"
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Australia’s two biggest share listings this year will highlight a polarized investment landscape: the strong, expanding allure of high-growth technology, versus entrenched demand for coal-linked assets that offer a steady stream of high dividends, reports Reuters (28 October, Duran). Early next month, Canada's Brookfield Asset Management will offer investors a coal terminal in Queensland that could be valued at up to A$3.5 billion, in what is widely expected to be Australia's biggest IPO of the year. Not long after, Macquarie Group will take its Nuix software firm public. Nuix could be a more attractive investment, given that it has boosted sales at average compound rates of over 15 percent for the past two years. But in spite of concerns over climate change, the Brookfield terminal will likely see healthy demand. Australia’s IPO market ground to a halt earlier this year as a result of the COVID-19 pandemic, but a surge of tech IPOs globally has helped kickstart listings of domestic small and mid-sized ecommerce and tech-related firms.

From "Australia's Big IPOs Split Investors Between Tech Growth Seam and Coal-powered Dividends"
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The BBC (28 October) is reporting that Boeing will cut another 7,000 jobs as its losses mount amid the ongoing coronavirus pandemic. The US planemaker has already announced deep cuts to its workforce, and now says its staff will number about 130,000 by the end of 2021. That would be down 20 percent from the 160,000 it employed before the coronavirus outbreak. The pandemic as well as safety concerns over its 737 Max jet have contributed to a slump in orders, prompting Boeing to post a fourth-consecutive quarterly decline in September. Boeing does not expect air travel to return to pre-pandemic levels until 2023. Still, CEO Dave Calhoun said he believes the company's "diverse portfolio, including our government services [and] defense and space programs, continues to provide some stability for us."

From "Boeing to Cut 20 Percent of Workforce by End of 2021"
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Callaway Golf Co. has confirmed its plans to purchase the remainder of closely held Topgolf Entertainment Group, Yahoo! Finance (27 October, Turner) reports. The deal values the driving-range chain at around US$2 billion. Callaway, the maker of Big Bertha drivers and other equipment, already owns 14 percent of Topgolf. Topgolf driving ranges feature food, drinks, and kids' games. They're seen as a way to bring younger players into the game of golf, which has suffered from aging demographics and the closing of hundreds of courses in recent years. Such ranges, though, have held up remarkably well during the COVID-19 crisis because golfers can practice their swing while remaining socially distant. The two companies expect pro forma revenue to grow from US$2.8 billion to US$3.2 billion by 2022. The deal is on track to close in the first quarter of 2021.

From "Callaway Confirms It Will Buy Rest of Range Chain Topgolf"
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The Italian tire manufacturer Pirelli on Wednesday lost an appeal against a European Union cartel ruling after Europe's highest court rejected its argument that it should not bear liability for its former subsidiary and cartel member Prysmian, according to Reuters (28 October, Chee). The European Commission in 2014 fined Prysmian, Nexans, Goldman Sachs, and eight cable firms a total of €301.6 million for operating a 10-year power cable cartel. Pirelli, which sold Prysmian to Goldman Sachs in 2005, challenged the antitrust decision, claiming there were no grounds to charge it with parental liability. Pirelli sought to convince European courts that the company directly involved in the cartel should bear sole responsibility. But the EU Court of Justice dismissed the tire maker's appeal, saying there was already well-established case law that competition violations by subsidiaries can be imputed to the parent company.

From "Pirelli Loses Appeal Against EU Cartel Ruling on Former Unit"
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The US Department of Justice (DOJ) called on social media platforms to be more transparent about how and why they wield their power over the spread of information, according to the Wall Street Journal (28 October, Kendall, Viswanatha). In a letter to congressional leaders ahead of testimony by tech giant CEOs, Assistant Attorney General for Legislative Affairs Stephen Boyd said it is "critical that [online platforms] can be held accountable" for their decisions. Boyd alluded to the decision by Twitter and Facebook to restrict access to recent New York Post stories containing allegations about the son of presidential nominee Joe Biden, suggesting the DOJ does not believe that decision is covered under the legal protections afforded online platforms. Boyd's letter came one month after the DOJ sent a legislative proposal that calls for Congress to curb longstanding legal protections for online platforms under Section 230 of the Communications Decency Act of 1996.

From "US DOJ Calls for Limits on Legal Immunity for Platforms"
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The Wall Street Journal (28 October, Kendall) reports that a federal appeals court on Wednesday refused to reconsider its earlier decision to toss out a US government antitrust case against Qualcomm Inc. The Federal Trade Commission (FTC) had alleged the dominant cellphone chip maker engaged in illegal monopolization, but a three-judge panel on the Ninth US Circuit Court of Appeals ruled two months ago that the federal government had not proven its case. The circuit said the FTC failed to demonstrate that Qualcomm's core business practices related to its cellphone chips and patents were anything more than lawful attempts at maximizing profits. Qualcomm, meanwhile, maintained that it acquired its market position through ingenuity and its licensing practices were fair and sensible. The FTC asked the Ninth Circuit to rehear the case with more judges taking part. The court denied that request Wednesday without comment on the case, indicating that no judge on the court called for a vote on the FTC's request to reconsider. Wednesday's ruling also wiped clean a sweeping antitrust decision from 2019 that would have forced Qualcomm to adjust its business practices. The ease of the Ninth Circuit’s rejection came in spite of the fact that dozens of antitrust scholars, as well as several companies, had filed amicus briefs urging the appeals court to reconsider. The FTC's only remaining option now is to seek review from the Supreme Court, a request that could face long odds.

From "FTC Request to Reconsider Qualcomm Antitrust Case Rejected by US Appeals Court"
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Reuters (26 October) reports that India's Future Retail will examine an order by an arbitration panel to halt its US$3.38 billion asset sale to Reliance Industries. While announcing its intention to take a closer look at the order by the panel, Future Retail also said it would take steps in enforcement proceedings to close the deal without delay. A source with direct knowledge of the situation told Reuters that Amazon received an emergency order from a Singapore arbitration panel to halt the two Indian companies from proceeding with the deal until an arbitration tribunal is formed. Amazon has alleged the deal would breach existing agreements. The US tech giant last year bought a 49 percent stake in Future Coupons Ltd., which owns a 7.3 percent stake in Future Retail. The investment reportedly came with contractual rights that include a right of first refusal and a non-compete-like pact.

From "India's Future Retail Says It Is Examining Order Against Reliance Deal"
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Southern California Edison (SCE) acknowledged its equipment may have sparked a fast-moving wildfire that forced evacuation orders for some 100,000 people and seriously injured two firefighters on Monday, reports the Associated Press (27 October, Weber, Rodriguez). The fire broke out around dawn Monday in Orange County, south of Los Angeles. In a report to the state Public Utilities Commission, SCE said it was investigating whether its electrical equipment caused the blaze. The brief report said it appeared that a “lashing wire” that tied a telecommunications line to a support cable may have struck a 12,000-volt conducting line above it, and an investigation was underway. SCE shut off power to about 38,000 homes and businesses in five counties as a safety precaution against gusts knocking down equipment or hurling tree branches or other vegetation into power lines. Other California utilities took similar steps, including PG&E, which shut off power to an estimated one million people across 34 counties amid powerful winds.

From "Utility Says Its Equipment May Have Sparked California Blaze"
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Insurance conglomerate American International Group Inc. (AIG) is taking steps to split off its life insurance business into a separate company, leaving it to focus on property-casualty insurance, reports the Wall Street Journal (27 October, Scism). The separation will be made under the direction of a new chief executive, as the company said Monday current CEO Brian Duperreault will hand over his title on 1 March to Peter Zaffino, currently the company’s president. The hiving off of the life-and-retirement operations would be the latest dramatic change at a company that in the early 2000s was a financial-services behemoth with globe-straddling operations, including airplane leasing, a financial-derivatives business, and prosperous life-insurance units in far-flung locations. Duperreault said in a Monday press release that AIG is now positioned to pursue a separation in which both parts of AIG could “prosper as stand-alone entities.” Zaffino said a separation “will enable each entity to achieve a more appropriate and sustainable valuation.”

From "American International Group to Divest Life Insurance Business"
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Merck & Co. said Tuesday it expects to report results from early-stage studies of two potential COVID-19 vaccines before the end of the year, reports Reuters (27 October, Maddipatla). The company also said it has advanced an experimental antiviral drug into late-stage testing. Merck was late to join the race for a COVID-19 vaccine, and its rivals Pfizer, AstraZeneca, and Moderna are already well into late-stage testing. Merck began recruiting participants for an early-stage study of its vaccine candidate in September, and initial data showing whether the vaccine triggers an immune response in the participants is expected by the end of the year. The drugmaker is also collaborating with the research nonprofit IAVI on a second vaccine candidate that uses the same technology as Merck's Ebola vaccine. Merck said it has been building facilities to be able to manufacture many millions of doses of the two vaccines.

From "Merck Says Early Data From COVID-19 Vaccines Expected This Year"
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The UK Information Commissioner's Office (ICO) has told the credit reference agency Experian to stop sharing the personal information of millions of people without their consent, according to the BBC (27 October). Experian sold the data to political parties as well as businesses looking to identify consumers who could afford goods and services. The ICO warned that Experian must make significant changes to the way it handles personal data or else it will face a large fine. The company must inform people that it holds their personal data and explain how it plans to use it, stop the processing of any personal data that has been collected unlawfully, and stop screening out prospective customers from marketing lists on the basis of financial status. Experian now has nine months to satisfy the watchdog or else it will be fined £20 million or four percent of its global turnover, whichever is higher. Experian said it believes the ICO overstepped its authority and plans to appeal. The ICO's two-year investigation was prompted by a complaint from the campaign group Privacy International.

From "Experian Told to Stop Sharing Data Without Consent"
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Unilever will push ahead with its plans to unify its legal structure in the United Kingdom, reports the Financial Times (27 October, Evans), despite the threat from Dutch politicians of a multibillion-euro "exit tax" in the Netherlands. Unilever, which produces products ranging from Dove soap to Ben & Jerry's ice cream, said Tuesday the boards of both its UK and Dutch entities have decided to unify in a single London-based company. The company will now ask the UK High Court to approve the change, which is structured as a merger. Unilever hopes to gain approval on 2 November and formalize the change on 29 November. Unification as a UK-based company has proved popular with shareholders, but Dutch politicians have sought to discourage the move by threatening an exit tax. The Dutch Green Party proposed a bill to introduce the tax earlier this month despite independent legal advice that it could break EU law.

From "Unilever to Become UK Company Despite Dutch Tax Threat"
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Amazon is looking to hire 100,000 new workers for the holiday season, according to CNN (27 October, Benveniste). Amazon is hiring for both full-time and part-time roles in jobs spanning all skill levels, the company said, and there are opportunities to turn the seasonal positions into full-time, long-term jobs. This is not the first time Amazon has embarked on a hiring spree in 2020. Earlier this year, Amazon hired 175,000 temporary employees to stay ahead of soaring demand at the start of the COVID-19 pandemic, and later retained 70 percent of those employees permanently. In September, the company announced plans to hire an additional 100,000 employees across its operations in the United States and Canada. News of Amazon's seasonal hiring plans comes as consumers start to buzz about holiday shopping, which is projected to start earlier than ever this year.

From "Amazon Plans to Add 100,000 Seasonal Workers in Holiday Hiring Blitz"
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Charles Schwab on Sunday announced that it will soon lay off 1,000 employees mere weeks after completing its acquisition of TD Ameritrade, confirms CNN (26 October, Goodwin). The dismissals are part of efforts to reduce overlapping or redundant roles across both companies. "We have begun notifying individuals that their roles have been eliminated and they will be leaving the firm," the Schwab Executive Council wrote in an official statement to employees. "This will result in a reduction of approximately . . . three percent of the combined workforce of Charles Schwab and TD Ameritrade." It was not clear as of press time which teams and roles will be eliminated. The job cuts are likely to be the only company-wide reductions in 2020.

From "Charles Schwab Plans to Lay Off 1,000 Employees Following TD Ameritrade Merger"
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