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

The financial crisis of 2007-2009 and the subsequent reaction of the G20 have created a new global regulatory landscape. Within the EU, change of regulatory institutions is ongoing. 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 and to understand the role of agency within this process. Our motivation is to provide insight into these changes from an operational management perspective, as well as to test Thelen and Mahoney?s (2010) modes of institutional change. Consequently, the study researched implementations of an Investment Management System with a rules-based compliance module within financial organizations. The research consulted compliance and risk managers, as well as systems experts. The study suggests that prescriptive regulations are likely to create isomorphic configurations of rules-based compliance systems, which consequently will enable the institutionalization of associated compliance practices. The study reveals the ability of some agents within financial organizations to control the impact of regulatory institutions, not directly, but through the systems and processes they adopt to meet requirements. Furthermore, the research highlights the boundaries and relationships between each mode of change as future avenues of research.

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

Global oil peaking: responding to the case for 'abundant supplies of oil'

This paper examines aspects of the case against global oil peaking, and in particular sets out to answer a viewpoint that the world can have abundant supplies of oil "for years to come". Arguments supporting the latter view include: past forecasts of oil shortage have proved incorrect, so current predictions should also be discounted; many modellers depend on Hubbert's analysis but this contained fundamental flaws; new oil supply will result from reserves growth and from the wider deployment of advanced extraction technology; and that the world contains large resources of unconventional oil that can come on-stream if the production of conventional oil declines. These arguments are examined in turn and shown to be incorrect, or to need setting into a broader context. The paper concludes therefore that such arguments cannot be used to rule out calculations that the resource-limited peak in the world's production of conventional oil will occur in the near term. Moreover, peaking of conventional oil is likely to impact the world's total availability of oil where the latter includes non-conventional oil and oil substitutes. (C) 2008 Elsevier Ltd. All rights reserved.

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.

Developing “Best Practices” for bankers’ pay in line with Basel III

This paper proposes hybrid capital securities as a significant part of senior bank executive incentive compensation in light of Basel III, a new global regulatory standard on bank capital adequacy and liquidity agreed by the members of the Basel Committee on Banking Supervision. The committee developed Basel III in a response to the deficiencies in financial regulation brought about by the global financial crisis. Basel III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage. The hybrid bank capital securities we propose for bank executives’ compensation are preferred shares and subordinated debt that the June 2004 Basel II regulatory framework recognised as other admissible forms of capital. The past two decades have witnessed dramatic increase in performance-related pay in the banking industry. Stakeholders such as shareholders, debtholders and regulators criticise traditional cash and equity-based compensation for encouraging bank executives’ excessive risk taking and short-termism, which has resulted in the failure of risk management in high profile banks during the global financial crisis. Paying compensation in the form of hybrid bank capital securities may align the interests of executives with those of stakeholders and help banks regain their reputation for prudence after years of aggressive risk-taking. Additionally, banks are desperately seeking to raise capital in order to bolster balance sheets damaged by the ongoing credit crisis. Tapping their own senior employees with large incentive compensation packages may be a viable additional source of capital that is politically acceptable in times of large-scale bailouts of the financial sector and economically wise as it aligns the interests of the executives with the need for a stable financial system.

Agricultural innovations at a Late Iron Age oppidum: archaeobotanical evidence for flax, food and fodder from Calleva Atrebatum, UK

The development of oppida in the late first millennium BC across north-western Europe represents a major change in settlement form and social organisation. The construction of extensive earthwork systems, the presence of nucleated settlement areas, long-distance trade links and the development of hierarchical societies have been evidenced. These imply that changes in the style and organisation of agriculture would have been required to support these proto-urban population centres. Hypotheses of the subsistence bases of these settlements, ranging from a reliance on surplus arable production from local rural settlements, to an emphasis on pastoral activities, are here reviewed and grounded against a wider understanding of the expansion of agriculture in the Late Iron Age. These agricultural models have not been previously evaluated. This paper presents archaeobotanical data from six well fills from large-scale excavations at Late Iron Age and Early Roman Silchester, a Late Iron Age territorial oppidum and subsequent Roman civitas capital located in central-southern Britain. This is the first large-scale study of waterlogged plant macrofossils from within a settlement area of an oppidum. Waterlogged plant macrofossils were studied from a series of wells within the settlement. An assessment of taphonomy, considering stratigraphic and contextual information, is reported, followed by an analysis of the diverse assemblages of the plant remains through univariate analysis. Key results evidence animal stabling, flax cultivation, hay meadow management and the use of heathland resources. The staple crops cultivated and consumed at Late Iron Age and Early Roman Silchester are consistent with those cultivated in the wider region, whilst a range of imported fruits and flavourings were also present. The adoption of new oil crops and new grassland management shows that agricultural innovations were associated with foddering for animals rather than providing food for the proto-urban population. The evidence from Silchester is compared with other archaeobotanical datasets from oppida in Europe in order to identify key trends in agricultural change.

Synthesis and Biological Evaluation of New Ozonides with Improved Plant Growth Regulatory Activity

The iron oxyallyl carbocation generated from 2,7-dibromocycloheptanone was induced to undergo [4 + 3] cycloaddition reactions with various furans, affording a series of 12-oxatricyclo-[4.4.1.1(2,5)]-dodec-3-en-11-one adducts. Similar methodology was used to prepare two additional cycloadducts using menthofuran and two homologous aliphatic dibromoketones. Dipolar cycloaddition of ozone to the adducts afforded the corresponding secondary ozonides (i.e., 1,2,4-trioxolanes) in variable yields. Ozonides were investigated by quantum mechanics at the B3LYP/6-31+G* level to study structural features including close contacts which may be responsible for enhancing ozonide stability. The effect of these ozonides and their corresponding precursor cycloadducts upon radicle growth of both Sorghum bicolor and Cucumis sativus was evaluated at 5.0 x 10(-4) mol L-1. The most active cycloadducts and ozonides were also evaluated against the weed species Ipomoea grandifolia and Brachiaria decumbens, and the results are discussed. Compared to ozonides previously synthesized in our laboratory, the new ozonides described herein present improved plant growth regulatory activity.

Building post crisis watchtowers: investment management Systems and new institutional logics for regulatory compliance

The financial crisis of 2007-2009 has precipitated large scale regulatory change. Tight deadlines for implementation require organizations to start working on remediation projects before final drafts of regulations are crystalized. Firms are faced with engaging in complex and costly change management programs at a time when profits are diminished. As a consequence of these factors, pre-crisis logics for organizing compliance practices are being questioned and new approaches introduced. Our study explores the use of Investment Management Systems (IMS) in facilitating compliance arrangements. Our motivation is to understand the new logics and the part played by IMS in supporting these approaches. The study adopts an institutional logics perspective to explore the use of such systems at eight financial organizations. The study found new logics for organizing compliance include consolidation, centralization, harmonization and consistency and that the IMS plays an important role in supporting and enabling related activities.

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.

The neurokinin 1 receptor: a potential new target for anti-platelet therapy?

The important role of platelets in the development of arterial thrombosis and cardiovascular disease is well established. Current treatments for arterial thrombosis include anti-platelet agents such as aspirin, thienopyridines and glycoprotein IIb-IIIa inhibitors. Despite these drugs being effective there remains a substantial unmet clinical demand for more effective therapeutic approaches, which may reflect the existence of alternative underlying regulatory mechanisms to those already targeted. Recent publications have demonstrated a key role for tachykinins in the positive feedback regulation of platelet aggregation and thrombus formation. The pro-thrombotic effects of tachykinins on platelets are mediated through the neurokinin 1 receptor, which may therefore offer a novel therapeutic drug target in the prevention and the treatment of arterial thrombosis.

DNA interaction and phosphotransfer of the C-4-dicarboxylate-responsive DcuS-DcuR two-component regulatory system from Escherichia coli

The DcuS-DcuR system of Escherichia coli is a two-component sensor-regulator that controls gene expression in response to external C-4-dicarboxylates and citrate. The DcuS protein is particularly interesting since it contains two PAS domains, namely a periplasmic C-4-dicarboxylate-sensing PAS domain (PASp) and a cytosolic PAS domain (PASc) of uncertain function. For a study of the role of the PASc domain, three different fragments of DcuS were overproduced and examined: they were PASc-kinase, PASc, and kinase. The two kinase-domain-containing fragments were autophosphorylated by [gamma-P-32]ATP. The rate was not affected by fumarate or succinate, supporting the role of the PASp domain in C-4-dicarboxylate sensing. Both of the phosphorylated DcuS constructs were able to rapidly pass their phosphoryl groups to DcuR, and after phosphorylation, DcuR dephosphorylated rapidly. No prosthetic group or significant quantity of metal was found associated with either of the PASc-containing proteins. The DNA-binding specificity of DcuR was studied by use of the pure protein. It was found to be converted from a monomer to a dimer upon acetylphosphate treatment, and native polyacrylamide gel electrophoresis suggested that it can oligomerize. DcuR specifically bound to the promoters of the three known DcuSR-regulated genes (dctA, dcuB, and frdA), with apparent K(D)s of 6 to 32 muM for untreated DcuR and less than or equal to1 to 2 muM for the acetylphosphate-treated form. The binding sites were located by DNase I footprinting, allowing a putative DcuR-binding motif [tandemly repeated (T/A)(A/T)(T/C)(A/T)AA sequences] to be identified. The DcuR-binding sites of the dcuB, dctA, and frdA genes were located 27, 94, and 86 bp, respectively, upstream of the corresponding +1 sites, and a new promoter was identified for dcuB that responds to DcuR.

Bioactive peptides from food proteins: new opportunities and challenges

Food proteins such as milk and soy are a rich source of bioactive peptides. In the last decade, research into this area has intensified and new bioactive peptide sequences have been discovered with a range of apparent biological functions; for example, antihypertensive, antioxidant, and antimicrobial effects and opiate-like qualities have been reported. These peptides could therefore lead to the development of important functional food products and ingredients for the prevention and even treatment of chronic diseases such as cardiovascular disease and cancer. Peptides can be produced by fermentation with dairy starters for instance, and by enzymatic hydrolysis with pancreatic and microbial enzymes. Further purification is typically carried out by membrane filtration and/or chromatographic methods. The production of novel bioactive peptides and their incorporation into functional food products poses several technological challenges as well as regulatory and marketing issues. Proof of efficacy is of paramount importance; this should be verified by conducting appropriate tests in vivo in animals and in humans. In addition, tests for cytotoxicity and allergenicity must be conducted. Despite all of these hurdles, scientific evidence is increasingly demonstrating the health benefits of diet-based disease prevention, and therefore new developments in this area are likely to continue both at the research and the commercialisation level.