If it gets parliamentary approval, this will be the second Scottish independence referendum after 2014, when the region had voted to remain a part of the UK.

“I will take the steps necessary now to make sure that Scotland will have a choice at the end of this process. A choice of whether to follow the UK to a hard Brexit, or to become an independent country able to secure a real partnership of equals with the rest of the UK and our own relationship with Europe,” Sturgeon said.

Polls since the Brexit vote have shown that support for Scottish independence has been relatively unchanged since the first referendum in 2014.

UK Prime Minister Theresa May is expected to deny permission for another referendum. May was quick to react to Sturgeon’s announcement, hitting back at her claim that the government had put up a ‘brick wall’ over Brexit arrangements.

“We’ve been working closely with the devolved administrations,” said the PM. “We’ve been listening to their proposals and recognising the many areas of common ground we have, such as protecting workers’ rights and our security from crime and terrorism. The tunnel vision that the SNP has shown is deeply regrettable. It sets Scotland on a course for more uncertainty and division. This is at a time when the evidence is that the majority of the Scottish people do not want a second independence referendum.”

The post May likely to deny Scottish independence referendum appeared first on International Finance.

Throughout his campaign, Trump highlighted that international trade deals are the main factor contributing to job losses in America. Keeping with what he said, Trump signed an executive order in the Oval Office pulling the United States out of the 12-nation TPP.

“We’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country,” the President said as he met union leaders in the White House’s Roosevelt Room.

“Great thing for the American worker,” Trump said as he signed the order on his third full day in office. The Republican says the trade deal would have damaged US manufacturing.

Trump is also in the process of renegotiating the North American Free Trade Agreement (NAFTA) in an attempt to make it more favourable for America.

Donald Trump took office on January 20, and has promised that he will strive towards putting America first. He is likely to implement protectionist policies to achieve the same.

The uncertainty surrounding the policies that Trump’s new administration will implement has caused the dollar and Asian stocks to fall.

Neighbour Mexico is preparing to discuss changes to trade rules about a product’s country of origin to try to avoid a disruptive fight with the United States over commerce.

Mexico sees possible common ground with US President Donald Trump on the “rules of origin” of the NAFTA that binds the two countries and Canada.

Rules of origin are regulations setting out where trade products are sourced from. Although formal negotiations about NAFTA have not begun, the rules could eventually be altered to favour US industry over competitors from outside North America, particularly in Asia.

During his electoral campaign, Trump expressed his strong desire to scrap NAFTA as he felt that the agreement was much more beneficial to other parties and not the US.

Mexican Foreign Minister Luis Videgaray and Economy Minister Ildefonso Guajardo will hold talks with top Trump officials in Washington on January 25 and 26 where security, migration and trade will be discussed.

“What we want is to maintain free access for Mexican products, without restrictions, without tariffs and quotas,” Videgaray said.

The post US withdraws from Trans-Pacific Partnership appeared first on International Finance.

November 4, 2016: Canadian Prime Minister Justin Trudeau flew to Brussels on the weekend to attend an EU-Canada Summit which had been delayed for three days because of opposition in Belgium to the Comprehensive Economic and Trade Agreement (CETA). Belgium came back to the negotiating table after getting added guarantees on GMO crops and protection for certain food products, clearing the way for joining all other EU members in signing the deal.

Trudeau and top EU officials signed the agreement paving the way for most import duties to be removed early next year. However, the treaty needs the approval of at least 38 national and regional parliaments, including the UK’s, to come into force.

Positive implications

Supporters of CETA say it will increase Canadian-EU trade by 20% and boost the EU economy by €12bn (£10.9bn) a year and Canada’s by C$12bn (£7.4bn).

Trudeau said consumers and businesses would immediately feel the benefits. “We will make sure that everybody gets that this is a good thing for our economies and that it is also a good thing for the world,” he said.

Speaking at the end of the 16^th EU-Canada Summit, European Commission President Jean-Claude Juncker said, “Today, the people of Canada and the European Union have opened a new chapter in their relationship. More than half a billion people on both sides of the Atlantic will enjoy new opportunities. For many people, it will mean new jobs and better jobs.”

By removing almost all import duties, CETA will allow European exporters of industrial and agricultural goods to save more than €500 million every year. The agreement protects workers’ rights, environmental standards and consumer safety. Governments will retain all of their powers to legislate, regulate and provide public services.

“CETA promotes all of the things that Canadians and Europeans care about,” said President Juncker, “decency in the workplace, our health and safety, our cultural diversity, the quality of the land, sea and air that surround us.”

With free trade under attack from populist movements and anti-globalisation campaigners, the deal reduces Canada’s reliance on the US and gives the EU a first trade pact with a G7 economy when its credibility has taken a knock from Britain’s decision to leave.

Criticism

Critics of the deal say it would favour big, multinational corporations at the expense of local, smaller businesses. One study by the EU and Canada projected the trade deal would boost total household income for both Europeans and Canadians, but a recent Tufts University study says Canadian and European workers’ income would take a hit, according to a Reuters report.

The post EU and Canada sign historic free trade agreement appeared first on International Finance.

IFM Correspondent

October 25, 2016: The Canadian economy has been facing a serious slump due to a number of reasons. To add to its woes, negotiations over a key trade deal – the Comprehensive Economic and Trade Agreement (CETA) –  are in crisis. The Agreement, which would do away with tariffs on most goods between the EU and Canada, has been in meltdown since October 21.

The Agreement, which has been in the making for seven years, is the EU’s most ambitious free trade deal to date. The breakdown in talks would mean the freezing up of trade worth about $70 billion a year and about $285 billion of direct investment.

Failure of negotiations with Wallonia

Standing between Canada and the trade deal with the EU is the relatively small population – 3.5 million – of Wallonia, a French-speaking region in Belgium, which has refused to favour the deal. The EU, having a population of 510 million people, is a single market and calls for unanimity on trade deals.

Chrystia Freeland, Minister of International Trade, Canada, announced on October 21 the ‘end and the failure’ of talks with the government of Wallonia.

Although Wallonia enjoys some support for its position elsewhere in the EU, of the 28 nations that make up the bloc, Belgium has been the only member state that has not endorsed the CETA.

Why talks derailed

CETA proposes to link the EU market with that of Canada – the world’s tenth largest economy. The trade deal is being opposed by groups that stand against globalisation who claim that that the CETA is a testing of the waters in order to push through an even more contentious EU-US trade agreement by name TTIP, the negotiations surrounding which have also stalled.

The ultimatum to Wallonia

The EU communicated to Belgium that it expected Prime Minister Charles Michel to make its position on CETA clear and had given the Belgian federal government time until October 24 for the same.

The leader of the socialist-run Wallonia region, Paul Magnette, reacted to this mandate by stating that the ‘ultimatum is not compatible with the exercise of democratic rights’. Despite efforts by the EU to reassure his government regarding investment protection, which remains a major obstacle in the negotiations between Brussels and Wallonia, Magnette struck out at the EU, saying, “We will never decide anything under an ultimatum or under pressure.”

Latest developments

If Prime Minister Michel cannot assure European Council president Donald Tusk that Belgium will allow the Agreement to go through, the planned EU-Canada summit to be held on October 27 in order to sign the pact will be indefinitely postponed.

For now, though, things remain hopeful, with Chrystia Freeland, the Canadian Minister of International Trade saying, despite setbacks on October 24, that ‘CETA isn’t dead yet’.

The post Canadian economy at stake over landmark trade deal with EU appeared first on International Finance.

Nigel Davies

October 17, 2016: Over the past decade, the nature of the threats to society has evolved beyond the physical world in which they traditionally operated. State-sponsored cybercrime and organised criminal hacking has become a threat to almost every sector that relies on an internet connection. Unsurprisingly, the financial trading sector is at increasing risk from such activity.

Many countries are now waking up to the fact that protecting national security in an increasingly volatile geopolitical landscape requires more than the traditional military and law enforcement efforts of previous decades. Just two examples of recent national security breaches include an attack on the Ukrainian national power grid and an attempted $951 million heist on Bangladesh’s central bank (the thieves successfully stole $81 million).

Cybersecurity firm Symantec has since found evidence linking the theft to the North Korean government, along with a string of other state-sponsored attacks against banks in South East Asia. The attacks against Ukraine and Bangladesh boiled down to one fact: malicious actors were able to exploit vulnerabilities in the critical national infrastructure (CNI) of entire states, resulting in severe consequences for both targets; an attractive end goal for any attacker.

Nigel Davies is Head of Secured Navigation, QinetiQ

Defence review covers private sector

This new kind of attack is reflected in the UK’s latest Strategic Defence and Security review. Evolving from its 2010 predecessor, the security of the private sector and civil society are now as much a part of the review as the military. From the ‘bombs and bullets’ approach of previous strategic policies, it is now concerned with defence against state-sponsored attacks, organised crime and protecting CNI.

The government’s intent “is for the UK to remain the top choice for European and global bank headquarters”, intending also to “build resilience to financial crisis”. Most importantly, it “will seek to develop long-term partnerships with industry, built on trust and collaboration, through better sharing of information and expertise¹.” It’s clear that, given its importance to the UK’s economy, protecting the financial trading sector plays a big part in securing the UK’s CNI.

At the moment, precise timing and synchronisation of financial transactions is critical to markets worldwide, is mandated by regulation in the European Union and is increasingly required in the United States. These high frequency transactions (HFT) involve moving millions of dollars in the space of seconds, with monetary values adjusting and reacting to real-time updates. To put it in perspective, the New York Stock Exchange handles nearly $2 billion in trades in the first two minutes of opening.

In order to allow HFT, the financial trading industry relies on timing sources and systems generally reliant on Global Navigation Satellite Systems (GNSS), such as GPS, to remain in sync with incredibly accurate timestamps.

The MiFID II legislation, announced last year and coming into effect across the EU in 2018, dictates that trades have to be traceable up to 100 microseconds. The reliance on such miniscule accuracies and coordination makes the system and the source of time and synchronisation information an obvious target for attack.

The vulnerabilities

While GNSS has become a phenomenally successful, ubiquitous and reliable source of accurate time, it suffers from two fundamental vulnerabilities. The first is in the strength of the GNSS signals, which are used by receivers to calculate time and position. The satellites which transmit those signals orbit the Earth at an altitude of over 20,000 km, which means that the signals are very weak and vulnerable to interference by the time they reach Earth. In fact they are so weak as to be imperceptible from the background noise of other transmissions, requiring complex algorithms to identify and track them. An attacker who is able to transmit additional ‘noise’ over the top of GNSS signals can stop a receiver from working properly, or at all.

The most basic of jamming devices work by broadcasting excessive noise over the GNSS signal, resulting in the receiver’s inability to lock onto the signals broadcast by the GNSS satellites.

The SENTINEL Project – a nationwide, UK government-backed investigation into GNSS jamming – tracked the proliferation of jammers, finding in one location more than 60 GPS interference incidents in six months.

While most interference incidents are minor and go unnoticed, in some situations, the impact can be substantial, leading to lost revenue. An example of this in action took place in 2009. Engineer Gary Bojczak was fined $32,000 for transmitting radio interference which disrupted the operation of Newark Liberty International Airport’s new air traffic control system.

Bojczak worked for an engineering firm that tracked its vehicles using GPS. However, Bojczak installed a jamming device in his assigned vehicle to stop his employer tracking his movements. His daily work route would take him past the airport, subsequently interfering with GPS signals used by the aircraft landing aids on approach to the airport.

The other vulnerability is the ease with which a false signal can be transmitted by an attacker to ‘trick’ a receiver into generating a false position or time. This is known as a ‘spoofing’ attack. The open access GNSS signals, which are widely used today by non-military users, are defined by open standards published on the internet. While this has led to a vibrant market in GNSS devices, it also means that the signals can be copied by an attacker.

These two factors combine to make the civilian satellite systems used by the financial trading sector highly vulnerable to tampering, blocking and disruption. Currently, devices which can create interference and disrupt the use of GNSS can be bought for as little as $40 online and are often no bigger than the size of a cigarette lighter.

Spoofing attacks are more complex and, until recently, were considered to be only within the grasp of Nation States and militaries. However, a 2015 paper published by the Chinese Qihoo 360 security research firm demonstrated GPS spoofing using low-cost hardware and open source software.

While there is  only rare and anecdotal evidence of civilian spoofing attacks to date (for instance, reports that drug cartels are spoofing drones operated by the US Customs and Border Protection agency), most experts believe it is only a matter of time before attacks become more common.

Mitigating threats

The sheer volume and value of data in the financial industry that needs to be time-stamped by GNSS data leaves it at risk from interference. Interfering with a GNSS signal could have consequences for trading bodies calculating the correct time of trades and keeping up with real-time trade requests. Even an event that lasted only a couple of seconds may impact system performance or even cause a crash as timings between networks fail to match. In the era of HFT, this could be costly.

Audit trails would also become confused, with one party buying and receiving the share before the other has ‘officially’ sold it. This is crucial when regulators have started to clamp down on HFT fraud; an inability to unravel HFT trails could leave the industry open to market rigging.

Such interference events are experienced by financial organisations. It is claimed that for roughly 10 minutes every day, the London Stock Exchange experiences problems with the signals it receives from GPS satellites due to such inadvertent jamming.

Fortunately, as evidenced by the aims set out in the 2015 Strategic Defence and Security review, the UK is quickly coming to terms with this new age of threats and is looking to future technologies which can effectively secure the nation’s critical infrastructure.

Over the next few years, the GNSS landscape will undergo a radical change. New GNSS are being deployed by Europe (Galileo) and China (Beidou), GPS is undergoing an overhaul to GPS version 3, and the Russian system (GLONASS) is being modified to be more compatible with other systems. With more systems comes redundancy and resilience. The new and modified systems bring new services and diversity.

A new generation of multi-constellation, multi-frequency (MCMF) receivers provide security to a range of threats affecting GNSS, enabling high levels of robustness and security for time-stamping as demanded by financial trading regulators. In the event of an interference attack, the MCMF capabilities allow the receiver chips to access multiple systems simultaneously, switching seamlessly between over 100 satellites, cross-checking between signals for consistency, readjusting to the next available signal, or ignoring signals (either spoofed or generated in error), which don’t agree with others.

The European Galileo system will introduce the first civilian secure, encrypted GNSS signal, the Public Regulated Service (PRS), which will be available to government-authorised organisations; core financial infrastructures are candidates for inclusion. PRS adds additional resilience against interference and is very secure against spoofing. Combining the encrypted GNSS services with new MCMF receivers minimises the likelihood of system crashes and timestamp manipulation resulting from spoofing and jamming events.

The use of these additional services together with resilient receiver processing techniques and robust design of the overall timing and synchronisation sub-systems (e.g. using accurate atomic clocks disciplined by the GNSS timing signals) can effectively mitigate these threats. With the threat of interference significantly reduced, the financial trading sector can be effectively secured on an operational level, safeguarding its future in an era of growing technological threats.

The post Defending the UK’s financial trading sector appeared first on International Finance.

Jaspreet Sehmi

August 2, 2016: In its first set of projections published since the UK voted to leave the EU, the IMF has downgraded its forecasts for global, eurozone and UK growth. In addition, the Fund says that the UK will be the worst affected of all the advanced economies – a view that Dun & Bradstreet shares given that Britain faces the largest amount of uncertainty and change. The financial markets were largely unfazed by the release of the IMF report, given widespread expectations for more substantial downward revisions.

In the event, the IMF reduced its UK growth estimate for 2016 by only 0.2 percentage points to 1.7%, and even though it cut back its 2017 estimate more sharply, it nevertheless remains firmly in positive territory at 1.3%. These forecasts are based on the rather optimistic assumption that the UK and EU will broadly maintain their existing trade and financial relationship. However, the UK government is loath to accept a deal that preserves the free movement of labour, unfettered access to the single market and the continuation of full ‘passporting’ rights for the City are far from guaranteed.

The IMF has pointed to financial market resilience in the weeks following the referendum as a key factor supporting its relatively sanguine baseline projections. Indeed, global markets have stabilised and risk assets have recovered relatively quickly from their post-Brexit sell-off. However, it is important to remember that market reactions tend to be volatile and short-termist while the economic facts on the ground take more time to filter through. Indeed, we believe that the current market respite will prove temporary, with the UK economy now passing through the eye of the storm. In contrast to what the IMF forecasts appear to imply, we continue to expect the UK to enter a technical recession at some point between the second half of this year and the first half of 2017.

While post-Brexit official statistics on the economy will not be released for some time, anecdotal and survey evidence suggests that firms are already scaling back investment and hiring plans while the housing market has started to show signs of cooling. The UK’s Composite Purchasing Managers’ Index (PMI) – which is based on a survey of manufacturing and services firms – fell substantially in July to hit its lowest level since early 2009, indicating a sharp contraction in business activity following the Brexit vote.

Despite unexpectedly holding fire in July (a decision probably taken to convey a sense of calm to the global financial markets), we expect the Bank of England to cut the benchmark interest rate by at least 25 basis points from the already-record low of 0.5% at its forthcoming August monetary policy meeting. It is also very possible that policymakers could announce a new round of quantitative easing stimulus measures within the coming few months.

Our full-year growth forecasts for 2016 and 2017 currently stand at 1.3% and 0.4% respectively and our UK risk rating remains at DB2c (downgraded from DB2a immediately after the vote). While this rating still falls within our ‘low-risk’ category, it remains subject to further downgrades ahead given the many headwinds now facing the UK economy, including tighter credit conditions, higher inflation, elevated business and consumer uncertainty and limited room for monetary policy manoeuvre. As such, we expect unemployment to begin to edge higher, inflation to accelerate, real wage growth to tail off and the government deficit to widen in the coming months.

Looking ahead, we believe that while the UK will emerge from its short-term economic woes, it will not escape unscathed. The vote to leave the EU will have a long-term impact on the trajectory of the economy – whatever the eventual outcome. And with prime minister Theresa May having recently announced that Article 50 will not be triggered this year, the ongoing lack of clarity will continue to hamper business activity and could trigger further periods of Brexit-related market volatility. Indeed, with a new government at the helm, trying to navigate the UK economy through previously unexplored territory to a yet-undetermined destination, the journey ahead remains long, fraught with uncertainty, and full of hazards.

Companies and investors with business interests/operations in the UK and EU are advised to continue to monitor developments closely and should brace themselves for an open-ended period of uncertainty and turbulence. As such, it is important to maintain a flexible approach to business planning. However, it should be remembered that the UK will remain a full member of the EU until at least early 2019, in which time the legal framework governing the UK’s relations with the Union will remain unchanged.

Nevertheless, we advise firms to expect the pound to remain weak against the dollar for at least the coming one to two years and to anticipate a reduction in demand from UK-based consumers and businesses as heightened uncertainty weighs on purchasing and investment plans. Moreover, international firms should be prepared for a deterioration in the payments performance of small and medium sized UK-based counterparts as they face a squeeze in margins owing to lower domestic demand and higher costs for imported inputs. Finally, we advise companies to explore trade and investment opportunities in non-EU markets (where possible) in order to diversify their risk exposure.

Jaspreet Sehmi is a Senior Economist at Dun & Bradstreet

The post Flying through the eye of a storm appeared first on International Finance.

August 1, 2016: Cyprus boasts some of the world’s finest properties, set against a backdrop of astonishing beauty. It is a place where relaxation comes naturally.

One can explore the great history, the excitement of towns and villages, and a range of natural wonders one won’t find anywhere else.

While maintaining its Greek cultural identity and Eastern Orthodox beliefs, the island has been warmly embracing its visitors for thousands of years.

Those who visit are often tempted to stay; the plethora of different people living on the island, has allowed Cyprus to progress as a diverse and multi-cultural nation – catering for everyone’s tastes and needs

When one is looking at Cyprus as a permanent destination, its formula speaks for itself; EU member since 2004 with great respect for human rights and personal freedom, sun-soaked beaches, crystal clear waters, mild climate and sunshine (320 days a year), stunning snow-capped mountains, great infrastructure, quaint villages to fast-developing modern cities and towns, luxurious marinas, first-rate educational and medical sectors, world heritage sites and ancient archaeological parks, English language widely spoken…

The island’s strategic location – at the crossroads of three continents (Europe-Africa-Asia) – offers convenience with everything that is literally at the doorstep.

The island sparkles with a string of benefits:

1. Safe and Secure Environment

5th safest country in the world (Value Penguin 2015)

2.         Lowest corporate tax regime in the European Union (12.5%)

3.         Foreign direct investment for both EU and non-EU nationals

4.         Attractive tax system: double taxation agreements with 52 countries

Cyprus ranks 27 out of 145 countries for best countries doing business, according to Forbes

5.         Credible, highly reputable and advanced financial Institutions. Numerous International Banking Units and multinational companies, including Jordan Kuwait Bank, Lebanon and Gulf Bank, Bank of Beirut, Promsvyazbank, RCB, Societe Generale, Barclays

6.         Competitive modern and transparent legal, financial and regulatory framework based on the British Law and standards

7.         Significant economic memberships such as WTO, World Bank, IBRD and IMF

9.         Significant natural gas reserves in Cyprus’ exclusive economic zone

10.       Workforce: highly skilled, educated and multilingual workforce at highly competitive fees

11.       Excellent telecommunications systems

12.       High standard of living and healthcare. The healthcare system ranks 24 out of 191 countries (UK is ranked 18, Israel 28 and the US 31)

13.       Excellent public, private international schools, colleges and universities

14.       One of the highest literacy rates in the world: 99.1%

15.       Two international airports with daily flights from major destinations, including Dubai, London, Paris, Moscow

16.       Rich cultural history with ancient sites

18.       The cleanest bathing waters in Europe with bathing waters ranked 1 out of 28 member states

19.       High quality tourist facilities

20.       Exclusive golf resorts

21.       EU citizenship through property investment within 3 months with the freedom of living, business, education, healthcare and movement in EU region

22.       Cyprus Permanent Residency through property investment within 2 months

Economy

The latest International Monetary Fund (IMF) estimates puts Cyprus’ rate per capita at USD 30,882 – well above average for the European Union.

The country has been sought after greatly as a base for several offshore businesses for its low tax rates.

Tourism, financial services, shipping and real estate are all significant parts of the economy. The island caters to 2.5 million tourists annually.

The Cypriot government adopted EUR as the national currency in 2008. Since then, Cyprus has been part of a monetary union, the Eurozone and of the EU single market. In the early 21st century, the Cypriot economy diversified massively and Cyprus became far more prosperous due to this diversification. However, in 2012 it became affected by the Eurozone financial and banking crisis. In June 2012, the Cypriot government announced it would need foreign aid to support its banks. The Cyprus government implemented a comprehensive programme of adjustment and reforms with strong support of the IMF, and after four years has successfully exited the programme.

According to Eurostat, the Statistical Office of the European Union, GDP growth is expected to reach 2% in 2017. The current GDP growth stands at 1.6% (2016), as opposed to 1.4% in 2015. Property sales are also on the rise and are projected to increase by 5-10% at the end of 2016.

Significant quantities of offshore natural gas have been discovered in the area known as Aphrodite in Cyprus’ exclusive economic zone (EEZ), about 109 miles south of Limassol.

Cyprus demarcated its maritime border with Egypt in 2003 and with Lebanon in 2007, while Cyprus and Israel demarcated their maritime border in 2010. In August 2011, the US-based firm Noble Energy entered into a production-sharing agreement with the Cypriot government regarding its commercial development. Cyprus’ drilling efforts, with the support of the US, EU and UN, began in September 2011 in Block 12.

Real estate

The real estate market in Cyprus saw an increase in demand on the island from 2004-2008, which led to developers increasing the supply. Prices have always been competitive and have always created strong opportunities for buyers.

The main element of a healthy Cyprus real estate market has always been residential property and specifically luxury second homes. Seafront properties and integrated master planned communities are the property options that offer buyer’s highest value for money. The price per square meters varies significantly depending on the location and building specifications.

When award-winning and reputable companies, like Aristo Developers , combine the attraction of Cyprus with their unique freehold property portfolio, a lucrative future is literally guaranteed.

Cyprus is also one of the most favorable places for international business. Individuals looking to invest through real estate often take advantage of the location and the climate, its excellent infrastructure and the various incentives in the area of taxation. The island offers a sophisticated low tax jurisdiction – the lowest in Europe – that has rapidly become the jurisdiction of choice for international investors; 0% Capital Gains Tax, 0% inheritance tax, 0% transfer fees, and a VAT Reduction Scheme boasting a 5% reduced VAT policy on the first residence on the island.

Citizenship by investment

The Cypriot government has established a number of incentives to attract foreign direct investment (FDI) into the country, including a citizenship by investment programme that grants full citizenship.

A direct property investment of €2.5 million through Aristo Developers,  will ensure lifetime EU citizenship for the applicant and his/her family members, provided that the terms and conditions established by the Cyprus government are observed.

Successful applicants all gain the right to live, work and study in all 28 EU member countries by virtue of Cyprus’ EU membership.

Cypriot passport holders are entitled to travel visa free to more than 169 countries and can quickly obtain visas for other countries, such as the US.

There are no physical residency requirements. Citizenship is passed on by descent, offering a legacy to future generations. There are no tax consequences unless the investor opts to become a tax resident in Cyprus.

Aristo Developers , the leading developer of the island and the pioneering force behind the island’s property, golf, commercial and educational industry, was established in the early 1980s. Boasting a significant share of the Cyprus home market, the company is continuously evolving by setting new standards for the island’s property industry, without compromising its first-rate customer service, rentals service, property management and after-sales support.

Its presence on the island has encouraged many people to relocate to Cyprus and opt for the ideal holiday home in the sun. Whether it’s for investment or retirement purposes, Aristo Developers‘ attractive portfolio includes properties for the affordable budget, and those in search of superb beachfront estates.  But if recommendations are anything to go by, the proof is literally ‘in the pudding’; Aristo prides itself on long-term commitment, having established solid relationships with more than 12,000 satisfied clients over the last 15 years!

Adding to its credibility, Aristo Developers also guarantees its title deeds. Since the beginning of 2015 and until the first six months of 2016, the company proceeded with the transfer of more than 700 title deeds to its clientele, having at this moment another 1,600 title deeds available for transfer to existing property owners for completed developments. This accomplishment undoubtedly ranks Aristo Developers, yet again, as a secure and most trustworthy company that provides peace of mind when acquiring real estate in Cyprus.

As a member of a thriving European community, Cyprus has proven timelessly that it is a preferred destination of choice. A direct property investment through Aristo Developers,  will ensure that one’s road to citizenship in Cyprus is a promising one.

The post Aristo can pave the path for EU citizenship appeared first on International Finance.

IFM Correspondent

July 14, 2016: With uncertainty looming large post-Brexit, some banks may shift their headquarters and offices outside London.

Andrea Orcel, president of UBS Investment bank, has warned that it is considering moving its staff to a European country, following the UK’s vote to leave the EU.

UBS, considered the world’s largest manager of private wealth, previously warned that London is likely to see an exodus of finance jobs in the wake of the Brexit vote.

“We would need to consider moving a number of our employees to a European Union country,” Orcel said recently on Bloomberg TV. “We would still deal with the UK, but the part of the business that is EU business, done from London, would need to be done from elsewhere,” he added.

Though he refrained from mentioning a number, he did say “it would be significant enough”, which would require complete reassessment of the bank’s model.

“The French government, the German government, a number of governments are making, if I may call it this way, a case for people to move to their jurisdiction. At the end of the day, they would like to import wealthy people who spend, who earn, who create jobs for their economies into their own centres,” Orcel said.

Banks in the UK fear that they may lose passporting rights, which allow firms in one EU country to provide services to clients elsewhere in the single market.

Though not many banks have come out openly and spoken about shifting their base, some believe that many banks are ‘contemplating’ shifting.

The post UBS may shift its base outside the UK appeared first on International Finance.

EU ‘equivalence’ offers UK banks a narrow back door to Brexit

June 21, 2016: British politicians urging voters to keep the UK in the European Union warn that exiting would endanger London’s financial centre by stripping firms of their ‘passport’ to do business across the bloc. Leave campaigners counter that the country’s almost identical rulebook would keep the doors open. But Europe’s constantly changing legislation, and the complications of gaining recognition, raise doubts about the ‘equivalence’ alternative.

To hear pro-EU campaigners tell it, the very existence of London’s financial center would be at risk if UK voters opt to leave the European Union in a referendum on June 23.

Voting out of the bloc would cost British financial companies their ‘passport’ to do business in the ‘single market’ that lets firms operate in 30 countries — the other 27 EU nations plus Iceland, Liechtenstein and Norway — without needing local approval.

No one exploits this membership perk as widely as Britain’s financial industry does. Its firms account for three-quarters of passports used in 2015, according to the think tank New Financial, citing data from EU regulators.

Aided by region wide access, finance ranks as the country’s biggest export sector, generating a £72 billion ($102 billion) trade surplus in 2014, according to industry body TheCityUK.

London financiers trade with the whole world, of course. But Britain’s link to Europe is at least part of the attraction for global businesses that could move as easily to New York, Hong Kong or elsewhere.

A British exit from the union would imperil all that, says the Remain campaign and what appears to be a majority of the financial industry.

Alternative visa

But the Leave camp holds out an alternative track for firms that lose their passports in case of Brexit: Non-EU countries can show that their rules are ‘equivalent’ to the bloc’s and can open doors for their financial companies.

Most EU financial laws contain a clause that grants market access for outside countries with rules and enforcement at least as rigorous as Europe’s.

The European Commission makes those determinations for each law, judging one country at a time. EU regulatory agencies for banking, securities and insurance provide analysis for those decisions, but the call is made in Brussels.

The UK’s equivalence to the current rulebook is beyond question. Bank and insurer capital standards, conflict-of-interest protections for asset managers and securities dealers — Britain’s ‘gold-plated’ rules tend to exceed, not just meet the demands of the Europe’s ‘single rulebook’.

A willing commission — if not sulking over a Brexit — should declare those areas as equivalent with no fuss.

Moving goalposts

The UK would still have to draft some statutes to replace the portion of EU demands that are set in directly binding regulations, rather than national law. Having helped craft many of those measures, the UK could adopt those with relative ease.

Yet the EU rarely leaves its goalposts in place. With pre-programmed reviews wired into most laws, Brussels would keep the UK on the treadmill of matching it, measure for measure, as in the case of Iceland, Liechtenstein and Norway.

Britain would still have the option of skipping some provisions considered too objectionable. The EU cap on banker bonuses — as one of the few financial measures on which the UK was outvoted — would be a tempting target, but risky for ‘equivalence’ seeking banks, as it’s embedded in the main law on capital standards.

The law on alternative investment fund managers — hedge funds and buyout firms — could be another. Although the UK had some similar rules on the industry, fund managers objected to the EU’s mandated scrutiny of their leverage. There’s less to lose for Britain there, as the law doesn’t offer the same free access based on equivalence.

Vexing cases

European laws with equivalence regimes demand only a comparable outcome, not identical texts. Outside countries can frame their measures however they like, provided they show some teeth in the enforcement.

In practice though, equivalence reviews have proved surprisingly vexing in some cases. Rules for auditors provide one example.

The commission and US regulators agreed on an approach before drafting rules, yet the American rules still languished in a critical procedure, until top officials cut a deal for the sake of preserving close ties. Jonathan Hill, the UK’s appointee to the commission, where he holds the financial services portfolio, sought to play down the prospects of the equivalence option, in arguing for the Remain camp.

In a hearing at the European Parliament, UK Independence Party member Steven Woolfe challenged Hill to explain why the commission would deny recognition to Britain. “Are you suggesting the equivalence rules would be changed to damage the City of London,” Woolfe asked.

Hill replied that even where the EU is willing, small differences can hold up such findings — for almost four years, in the case of US rules for derivatives clearinghouses.

The equivalence track holds out a chance for British financial firms to gain a visa to visit the EU, but it could prove no replacement for a passport to live there.

Lewis Crofts is Chief Correspondent at Mlex

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What are, in your view, the implications of Brexit on the global economy?

We believe that the Brexit outcome is a global shock, with implications for the global and regional economic outlook that will be channelled mainly through four areas:

Monica Defend, Head of Global Asset Allocation Research, Pioneer Investment

The first is confidence – intended in a broader sense and including the ideological consequences of this result. It relates to the uncertainty of how and when an exit of the United Kingdom from the European Union will be triggered, and to the subsequent political chaos that is expected to last for a while. In this environment, a confidence shock is likely to freeze investment plans and cool down manufacturing activity. •          The second channel relates to world trade: trading activity with the UK and from Europe to Asia is likely to be curbed. There may also be some indirect effects: a weakening of global growth and demand is likely to spill over to countries (such as Japan) with limited direct trading relationships with the UK. •          Inflation expectations will also be curbed; while our base case scenario still anticipates low inflation to persist, deflation fears are increasing around the world following the Brexit result.

•          Last but not least, we need to consider FX. Currencies are considered to be the asset class most sensitive to this kind of shock. In our view, the medium term movements will be crucial. Within a fragile economic environment, growth and corporate earnings will be heavily influenced by currency dynamics. We think policy response will be key in defining the way through.

What policy response do you envisage in the next few months?

Investors have gotten used to Central Bank action being the only game in town, especially over the last three years. In the short term, this is no exception. We remain of the view that the Federal Reserve will not hike rates in 2016. Market expectations are now signaling that the first hike will not come until December 2017. Brexit turmoil, tighter financial conditions and a stronger US dollar play into the direction of an even more cautious stance. The Fed is also taking the potential volatility linked to the upcoming US election into account. We believe the election won’t destabilise the economic environment, that continues to evolve reasonably well, but it is another reason for the Fed to remain in a wait-and-watch mode.

Meanwhile, the Bank of England (BoE) has been trying to reassure markets and support the banking sector. At this point, we cannot rule out the possibility of the BoE cutting rates in the coming months to support the economy.

The European Central Bank and the Bank of Japan are currently busy buying financial assets in their respective currency areas and may have to do even more if uncertainty negatively impacts their respective economic areas.

While Central Bank intervention is vital in the short term, we see that their effectiveness to fix the long-term flaws of the global economy is fading.

What are the key factors to watch in the medium term?

While the global economy is growing at a subdued pace and the relevant problems (such as high debt and low productivity growth) remain mostly unresolved, it is the political agenda that is influencing the direction of financial markets. Aside from Brexit, immigration issues, rising populist forces and instances of broader fiscal flexibility may all threaten the solidity of the European project. The political calendar is also busy: the Italian constitutional referendum risks turning into a validation of the present government in the autumn; the presidential election in Austria is being re-run; and the election in the US in November followed by elections in France and Germany in 2017 are key events to watch.

When economic and stability conditions are fragile, sensitivity to political events increases and the volatility in financial markets can be harmful.

Among geopolitical risks, the increase of terrorism as a serious threat to people and democracy shouldn’t be underestimated.

What are the possible economic scenarios for the future?

Monetary policy in the short term and policy response in the medium to long term will define, in our view, the way forward.

The Eurozone political uncertainty and actions taken will be key, as they will likely have a global influence in the medium term. We think that the degree of political convergence towards a banking union and fiscal union will set the pace for economic development in Europe. We believe a partial political convergence on these issues at the very least is likely and the EU needs to design a way to deal with immigration, which has been a significant bone of contention, in order to preserve euro integrity. We have been outlining a low-low economic scenario for a while – low growth and low inflation. In the aftermath of the Brexit outcome and considering the busy political agenda, we now worry about a political paralysis or an inability to take the actions required to address banking system fragilities and design a new route to quality growth.

This may turn our low-low scenario into a trap of prolonged uncertainty, economic and political fragility that opens the door to negative shocks and volatility. While it will take a while for the cost of this uncertainty to materialise in economic figures, the low credibility of the political stance provides us with scarce visibility.

What are the investment opportunities for the second part of 2016?

We are increasingly biased towards a risk-off stance. Scarce visibility on the political front leads us to take an even more cautious approach towards equities (especially in Developed Markets and Europe in particular). We believe that investors should consider focusing on assets that are perceived by the market to be safe havens, such as the USD (vs EUR) and US Treasuries (versus German Bunds). Currencies that have played a hedging role during the market turmoil, such as the Swiss Franc and the Japanese Yen, may have run their course. In particular, the Yen could be impacted by possible BOJ intervention to alter the currency’s appreciation. Financial markets seem to have priced-in most of the Brexit event. However, we are now back to the old fragilities (namely the financial sector, public finance sustainability within a low growth, low inflation environment) and we see few catalysts for a strong recovery for equity markets in the medium term, especially in Europe. Credit is favoured among risk assets. Here, we believe an active approach is needed, because the market is mainly driven by Central Bank actions, which go beyond fundamentals. In this context, Emerging Markets are relatively well positioned to enjoy investor flows both in equities and in fixed income. On a selective basis, we believe that the good valuations of EM equity markets, and particularly country specific stories of economic adjustment, are worth considering, as well as some exposure to local EM currencies. In this regard, we still favour India and consumer-driven sectors in China in the equity space.

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