Institutional pressures on financial services firms: the role of information systems in regulatory compliance

The financial crisis of 2008 led to new international regulatory controls for the governance, risk and compliance of financial services firms. Information systems play a critical role here as political, functional and social pressures may lead to the deinstitutionalization of existing structures, processes and practices. This research examines how an investment management system is introduced by a leading IT vendor across eight client sites in the post-crisis era. Using institutional theory, it examines changes in working practices occurring at the environmental and organizational levels and the ways in which technological interventions are used to apply disciplinary effects in order to prevent inappropriate behaviors. The results extend the constructs of deinstitutionalization and identify empirical predictors for the deinstitutionalization of compliance and trading practices within financial organizations.

The role of rules-based compliance systems in the new EU regulatory landscape: perspectives of institutional change

Purpose The research objective of this study is to understand how institutional changes to the EU regulatory landscape may affect corresponding institutionalized operational practices within financial organizations. Design/methodology/approach The study adopts an Investment Management System as its case and investigates different implementations of this system within eight financial organizations, predominantly focused on investment banking and asset management activities within capital markets. At the systems vendor site, senior systems consultants and client relationship managers were interviewed. Within the financial organizations, compliance, risk and systems experts were interviewed. Findings The study empirically tests modes of institutional change. Displacement and Layering were found to be the most prevalent modes. However, the study highlights how the outcomes of Displacement and Drift may be similar in effect as both modes may cause compliance gaps. The research highlights how changes in regulations may create gaps in systems and processes which, in the short term, need to be plugged by manual processes. Practical implications Vendors abilities to manage institutional change caused by Drift, Displacement, Layering and Conversion and their ability to efficiently and quickly translate institutional variables into structured systems has the power to ease the pain and cost of compliance as well as reducing the risk of breeches by reducing the need for interim manual systems. Originality/value The study makes a contribution by applying recent theoretical concepts of institutional change to the topic of regulatory change uses this analysis to provide insight into the effects of this new environment

Salt forms of Amides: protonation and polymorphism of Carbamazepine and Cytenamide

In situ generation of HCl or HBr in alcohol leads to O-protonation of the amide group of carbamazepine. Six salt phases have been produced using this method and their crystal structures determined by single crystal diffraction. A new polymorph of carbamazepine hydrochloride is described as are two polymorphs of carbamazepine hydrobromide. All are protonated at the amide O atom to give RC(OH)NH2 cations. Prolonged exposure to air results in addition of water to the solid salt forms. Such hydration of carbamazepine hydrobromide simply gives a monohydrated phase, but similar treatment of the equivalent hydrochloride results in partial loss of HCl and the transfer of the remaining proton from the amide group to water to give [carbamazepine][H3O]0.5[Cl]0.5·H2O. A similar hydronium chloride species is the only product isolated after reaction of the carbamazepine analogue cytenamide with HCl generated in methanol.

Parabens can enable hallmarks and characteristics of cancer in human breast epithelial cells: a review of the literature with reference to new exposure data and regulatory status

A framework for understanding the complexity of cancer development was established by Hanahan and Weinberg in their definition of the hallmarks of cancer. In this review, we consider the evidence that parabens can enable development in human breast epithelial cells of 4/6 of the basic hallmarks, 1/2 of the emerging hallmarks and 1/2 of the enabling characteristics. Hallmark 1: parabens have been measured as present in 99% of human breast tissue samples, possess oestrogenic activity and can stimulate sustained proliferation of human breast cancer cells at concentrations measurable in the breast. Hallmark 2: parabens can inhibit the suppression of breast cancer cell growth by hydroxytamoxifen, and through binding to the oestrogen-related receptor gamma (ERR) may prevent its deactivation by growth inhibitors. Hallmark 3: in the 10nM to 1M range, parabens give a dose-dependent evasion of apoptosis in high-risk donor breast epithelial cells. Hallmark 4: long-term exposure (>20weeks) to parabens leads to increased migratory and invasive activity in human breast cancer cells, properties which are linked to the metastatic process. Emerging hallmark: methylparaben has been shown in human breast epithelial cells to increase mTOR, a key regulator of energy metabolism. Enabling characteristic: parabens can cause DNA damage at high concentrations in the short term but more work is needed to investigate long-term low-doses of mixtures. The ability of parabens to enable multiple cancer hallmarks in human breast epithelial cells provides grounds for regulatory review of the implications of the presence of parabens in human breast tissue.

Managing governance, risk and compliance for post-crisis regulatory change: a model of IS capabilities for financial organizations

The 2008-2009 financial crisis and related organizational and economic failures have meant that financial organizations are faced with a ‘tsunami’ of new regulatory obligations. This environment provides new managerial challenges as organizations are forced to engage in complex and costly remediation projects with short deadlines. Drawing from a longitudinal study conducted with nine financial institutions over twelve years, this paper identifies nine IS capabilities which underpin activities for managing regulatory themed governance, risk and compliance efforts. The research shows that many firms are now focused on meeting the Regulators’ deadlines at the expense of developing a strategic, enterprise-wide connected approach to compliance. Consequently, executives are in danger of implementing siloed compliance solutions within business functions. By evaluating the maturity of their IS capabilities which underpin regulatory adherence, managers have an opportunity to develop robust operational architectures and so are better positioned to face the challenges derived from shifting regulatory landscapes.

The APOB insertion/deletion polymorphism (rs17240441) influences postprandial lipaemia in healthy adults

BACKGROUND: Apolipoprotein (apo)B is the structural apoprotein of intestinally- and liver- derived lipoproteins and plays an important role in the transport of triacylglycerol (TAG) and cholesterol. Previous studies have examined the association between the APOB insertion/deletion (ins/del) polymorphism (rs17240441) and postprandial lipaemia in response to a single meal; however the findings have been inconsistent with studies often underpowered to detect genotype-lipaemia associations, focused mainly on men, or with limited postprandial characterisation of participants. In the present study, using a novel sequential test meal protocol which more closely mimics habitual eating patterns, we investigated the impact of APOB ins/del polymorphism on postprandial TAG, non-esterified fatty acids, glucose and insulin levels in healthy adults. FINDINGS: Healthy participants (n = 147) consumed a standard test breakfast (0 min; 49 g fat) and lunch (330 min; 29 g fat), with blood samples collected before (fasting) and on 11 subsequent occasions until 480 min after the test breakfast. The ins/ins homozygotes had higher fasting total cholesterol, LDL-cholesterol, TAG, insulin and HOMA-IR and lower HDL-cholesterol than del/del homozygotes (P < 0.017). A higher area under the time response curve (AUC) was evident for the postprandial TAG (P < 0.001) and insulin (P = 0.032) responses in the ins/ins homozygotes relative to the del/del homozygotes, where the genotype explained 35% and 7% of the variation in the TAG and insulin AUCs, respectively. CONCLUSIONS: In summary, our findings indicate that the APOB ins/del polymorphism is likely to be an important genetic determinant of the large inter-individual variability in the postprandial TAG and insulin responses to dietary fat intake.

Polymorphism and optical properties in [NH4][InSe2]

The solvothermal synthesis and characterization of two indium selenides with stoichiometry [NH4][InSe2] is described. Yellow [NH4][InSe2] (1), which exhibits a layered structure, was initially prepared in an aqueous solution of trans-1,4-diaminocyclohexane, and subsequently using a concentrated ammonia solution. A red polymorph of one-dimensional character, [NH4][InSe2] (2), was obtained using 3,5-dimethylpyridine as solvent. [NH4][InSe2] (1) crystallizes in the non-centrosymmetric space group Cc (a=11.5147(6), b=11.3242(6), c=15.9969(9) Å and β=100.354(3)°). The structural motif of the layers is the In4Se10 adamantane unit, composed of four corner-linked InSe4 tetrahedra. These units are linked by their corners, forming [InSe2]− layers which are stacked back to back along the c-direction, and interspaced by [NH4]+cations. The one-dimensional polymorph, (2), crystallizes in the tetragonal space group, I4/mcm (a=8.2519(16), c=6.9059 (14) Å). This structure contains infinite chains of edge-sharing InSe4 tetrahedra separated by [NH4]+ cations.

Evolutionary rewiring of bacterial regulatory networks

Bacteria have evolved complex regulatory networks that enable integration of multiple intracellular and extracellular signals to coordinate responses to environmental changes. However, our knowledge of how regulatory systems function and evolve is still relatively limited. There is often extensive homology between components of different networks, due to past cycles of gene duplication, divergence, and horizontal gene transfer, raising the possibility of cross-talk or redundancy. Consequently, evolutionary resilience is built into gene networks – homology between regulators can potentially allow rapid rescue of lost regulatory function across distant regions of the genome. In our recent study [Taylor, et al. Science (2015), 347(6225)] we find that mutations that facilitate cross-talk between pathways can contribute to gene network evolution, but that such mutations come with severe pleiotropic costs. Arising from this work are a number of questions surrounding how this phenomenon occurs.

Evidence for interplay between genes and maternal stress in utero: monoamine oxidase A polymorphism moderates effects of life events during pregnancy on infant negative emotionality at 5 weeks

The low activity variant of the monoamine oxidase A (MAOA) functional promoter polymorphism, MAOA-LPR, in interaction with adverse environments (G × E) is associated with child and adult antisocial behaviour disorders. MAOA is expressed during foetal development so in utero G × E may influence early neurodevelopment. We tested the hypothesis that MAOA G × E during pregnancy predicts infant negative emotionality soon after birth. In an epidemiological longitudinal study starting in pregnancy, using a two stage stratified design, we ascertained MAOA-LPR status (low vs. high activity variants) from the saliva of 209 infants (104 boys and 105 girls), and examined predictions to observed infant negative emotionality at 5 weeks post-partum from life events during pregnancy. In analyses weighted to provide estimates for the general population, and including possible confounders for life events, there was an MAOA status by life events interaction (P = 0.017). There was also an interaction between MAOA status and neighbourhood deprivation (P = 0.028). Both interactions arose from a greater effect of increasing life events on negative emotionality in the MAOA-LPR low activity, compared with MAOA-LPR high activity infants. The study provides the first evidence of moderation by MAOA-LPR of the effect of the social environment in pregnancy on negative emotionality in infancy, an early risk for the development of child and adult antisocial behaviour disorders.

Evidence for interplay between genes and parenting on infant temperament in the first year of life: monoamine oxidase A polymorphism moderates effects of maternal sensitivity on infant anger proneness

Background The low expression polymorphism of the MAOA gene in interaction with adverse environments (G × E) is associated with antisocial behaviour disorders. These have their origins in early life, but it is not known whether MAOA G × E occurs in infants. We therefore examined whether MAOA G × E predicts infant anger proneness, a temperamental dimension associated with later antisocial behaviour disorders. In contrast to previous studies, we examined MAOA G × E prospectively using an observational measure of a key aspect of the infant environment, maternal sensitivity, at a specified developmental time point. Methods In a stratified epidemiological cohort recruited during pregnancy, we ascertained MAOA status (low vs. high expression alleles) from the saliva of 193 infants, and examined specific predictions to maternal report of infant temperament at 14 months from maternal sensitivity assessed at 29 weeks of age. Results Analyses, weighted to provide general population estimates, indicated a robust interaction between MAOA status and maternal sensitivity in the prediction of infant anger proneness (p = .003) which became stronger once possible confounders for maternal sensitivity were included in the model (p = .0001). The interaction terms were similar in males (p = .010) and females (p = .016), but the effects were different as a consequence of an additional sex of infant by maternal sensitivity interaction. Conclusions This prospective study provides the first evidence of moderation by the MAOA gene of effects of parenting on infant anger proneness, an important early risk for the development of disruptive and aggressive behaviour disorders.

Economic evidence in regulatory disputes: revisiting the court-regulatory agency relationship in the US and the UK

This article examines the issue of the appropriate scope of review of economic evidence enshrined in the discretionary assessments of utility regulators in the US and the UK. It advances a balance of institutional competencies approach to the question of the degree of deference owed to the regulatory agency’s economic assessments. In doing so, it revisits the doctrinal positions advanced in the US and UK for the substantive review of administrative discretion, so as to become attuned to the challenges posed by economic evidence. Drawing on insights from political science and economics, the suggested approach illuminates the institutional disadvantages of the courts that may warrant a high degree of deference. At the same time, however, it remains sensitive to the polycentric elements of regulatory disputes as well as to a number of institutional realties that may attenuate the weight of such comparative institutional disadvantages.

Legal and regulatory barriers to effective public-private partnership governance in Kazakhstan

Purpose – The purpose of this paper is to provide a critical assessment of legal and regulatory impediments to effective governance of public-private partnerships (PPPs) in Kazakhstan. Design/methodology/approach – The qualitative study develops propositions from the PPP literature and then tests them against findings from in-depth interviews. Interviewees have been selected by a purposeful sampling from PPP projects in Kazakhstan as well as from national and regional PPP centres. Findings – The identified barriers to effective PPP management include irregularities in the PPP legal framework, such as lack of legal definition of a PPP and controversy with the government guarantee’s legal status for its long-term payments to partnerships; bureaucratic tariff setting for partnership services; non-existent opportunity for private asset ownership; and excessive government regulation of PPP workers’ wage rates. Practical implications – The partners’ opposing perspectives on a number of PPP issues show that management needs to identify and carefully reconcile stakeholder values in a partnership in order to achieve more effective PPP governance. Practitioners, particularly those in the public agencies, have to be concerned with ways to reduce the government overregulation of the private operators, which is likely to result in greater PPP flexibility in management and, ultimately, higher efficiency in delivering the public services. Originality/value – By elucidating multiple examples of overregulation and PPPs’ inefficiency, the paper demonstrates that the government dominance in PPP management is conceptually inappropriate. Instead, the government should adopt the concept of co-production and manage its relations with the private sector partner in a collaborative fashion.