May 07, 2018 SHARE Email Facebook Twitter The Blog, Weekly Update Severance taxLast Monday, Governor Wolf joined bipartisan legislators to announce the introduction of legislation that would create a commonsense severance tax in the commonwealth. Pennsylvania is the only gas-producing state without a severance tax.“Since day one of my term as governor, I have fought to enact a reasonable severance tax that would give Pennsylvanians their fair share of the energy boom that is powered by resources that belong to all of us,” said Governor Wolf.The proposed severance tax would generate an estimated $248.7 million in the next fiscal year alone to address critical budget needs and would also keep the current impact fee in place, ensuring that this important revenue source for local municipalities stays intact.ManufacturingBuilding on his efforts to promote job training and connect students with career pathways, on Tuesday Governor Wolf announced a new fellowship program through his Manufacturing PA initiative. This program will partner undergraduate or graduate students at Pennsylvania colleges and universities with local manufacturers and fund student specific research projects that develop new products or processes for the company. On Friday, the governor also announced a $135,000 grant to the Manufacturers Resource Center to develop a new training program with Lehigh Carbon Community College, providing 20 trainees with certifications and college credits.Criminal justiceOn Thursday, Governor Wolf hosted a press conference alongside Congressman Dwight Evans, Senator Larry Farnese, Representative Donna Bullock, artist Robert “Meek Mill” Williams and Sixers Co-Owner and entrepreneur Michael Rubin.“I believe that we can improve the criminal justice system, so that we can protect victims while also ending a cycle of incarceration that has left so many people feeling trapped, helpless, and without an opportunity to return to society after they have been released,” Governor Wolf said.View a list of initiatives outlined by Governor Wolf.Governor Wolf’s Week, April 29, 2018 – May 5, 2018Monday, 4/30/18Students, Community Members Join Wolf Administration in Williamsport for Cabinet in Your Community EventGovernor Wolf, Legislators Introduce New Bipartisan Severance Tax LegislationTuesday, 5/1/18Governor Wolf Again Asks House GOP Leaders to Advance Domestic Violence LegislationGovernor Wolf Launches New Fellowship Program to Connect Students and Manufacturers to Advance Innovation in PennsylvaniaFirst Lady Frances Wolf Joins Advisory Commission on Asian Pacific American Affairs to Honor PennsylvaniansAsian American and Pacific Islander Heritage Month, 2018Wednesday, 5/2/18Governor Wolf Hosts First Opioid Command Center on the Road in Southwest PennsylvaniaGovernor Wolf Announces Plans for Special Congressional ElectionsGovernor Wolf Announces New Small Business Loan Approvals for Eight Projects in Six Counties, Supporting Nearly 700 JobsThursday, 5/3/18Governor Wolf Leads Call-to-Action for Criminal Justice ReformPennsylvania’s School Safety Task Force Hears from Students, Others in the Northeast RegionFriday, 5/4/18Governor Wolf Announces Grant for New Manufacturing Training Program in the Lehigh ValleyHighlights from TwitterI’m proud to join state legislators, @sixers co-owner @MichaelGRubin, and artist @MeekMill today to announce proposals for criminal #JusticeReform in Pennsylvania. pic.twitter.com/Bvp1Ny4mt2— Governor Tom Wolf (@GovernorTomWolf) May 3, 2018 Weekly Update: Fighting for a Severance Tax, Connecting Workers and Manufacturers, and Advocating for Criminal Justice Reform Since day one as governor, I have fought to enact a commonsense severance tax and today I’m joining bipartisan legislators to renew that call. It is well past time that we join all other major gas-producing states in getting a fair share of natural gas profits for our citizens. pic.twitter.com/vTML1Z5u2Q— Governor Tom Wolf (@GovernorTomWolf) April 30, 2018
The active funds increased their share of bonds and bond funds to 52%, from 48% in the first quarter, while decreasing the share of bank deposits by 2 percentage points to 5% because of historically low interest rates.The balanced funds likewise raised their bond share, by 5 percentage points to 75%, while cutting their equity and equity fund exposure, from 17% to 14%.The conservative plans remained relatively unchanged, with bonds and bond funds accounting for 78%, and deposits 7%. Like the active funds, they have also kept a sizeable share, of 15%, in cash.Brexit had little direct effect because the Latvian funds have relatively little investment in the UK, instead focusing increasingly on the home market.Latvia accounted for 42% of invested assets, followed by Eastern Europe (23%), and global and international securities (12%).More than 92% of investments went into euro-denominated assets, followed some way behind by the US dollar (6%).Assets accumulated in the 15-year-old second-pillar system breached the €2.5bn mark at the end of June, a year-on-year growth rate of 14.4%, with net investment income accounting for almost €400m.In the voluntary third pillar, the 12-month average fell to 0.52%, from 3.47% in June 2015, with the four balanced funds returning 1.1%, the 10 active plans minus 0.38% and the First Closed Pension Fund 0.75%.The wide range of returns from the active plans partly reflected currency developments over the period, with the two US dollar funds returning 1.23%, while the eight euro-denominated funds averaged minus 0.45%.Over the last three months, the active plans raised their share in equity and equity funds by 4 percentage points to 37%, while the balanced ones increased their bond holdings from 64% to 69%, in both cases at the expense of their cash holdings.Assets grew by 11.3% year on year to €340m and membership by 7.2% to 261,925. Latvia’s mandatory second-pillar pension funds’ 12-month weighted average return to 30 June 30 fell to minus 0.16%, from 2.71% a year earlier, according to the Association of Commercial Banks of Latvia (LKA).The best results, of 1.53%, were generated by the eight bond-weighted conservative funds, followed by the four balanced funds at minus 0.47%, and the eight active, equity-weighted funds at minus 1.54%.However, a market recovery in the second quarter was reflected in the funds’ improved three-month performance, with the active funds returning 0.37% (compared with minus 0.75% in the first quarter), and the balanced funds 0.48% (against minus 0.07%), while the conservative funds’ result was unchanged at 0.57%.The funds’ asset allocation strategies became increasingly more risk averse throughout this year.
Nausicaa Delfas, executive director of international, FCAThe UK is scheduled to end its EU membership on 29 March 2019. Although it has yet to be formally agreed, a transition period has been proposed, lasting through to the end of 2020, during which time UK laws will remain in harmony with those of the EU.The FCA expected UK and EU markets to “remain highly integrated whatever the outcome of Brexit”, Delfas said.“We think working to promote common global standards, alongside our work to onshore a rulebook that is equivalent to the EU on day one, provides a solid basis for cross-border business to take place,” she added.Firm expectationsMany of the 58,000 companies regulated by the FCA were making good progress with their contingency planning, Delfas said. However, she urged providers to consider a variety of measures to “ensure a successful transition”.In particular, Delfas said companies shifting operations out of the UK and into Europe should ensure that the UK entity still had sufficient senior staff and were able to meet regulatory standards.“We expect you to continue to service your customers as fully and fairly as the law permits, and to communicate with affected customers, in the UK and elsewhere, in a clear and timely fashion, including, for example, what regulatory protections will apply for your customers,” she said.Temporary permissionsThe regulator yesterday published a statement outlining the areas it wanted UK firms with European clients to consider, as well as a proposed “temporary permissions regime” for providers based in the European Economic Area (EEA) and serving UK-based clients.Such a regime would, if used, allow EEA companies to keep operating in the UK “for a period of time after the exit day”, the FCA said.Companies would still need to seek full authorisation for longer-term operations, but there was no need to apply for this yet, the regulator said.The FCA has also been analysing the EU financial rulebook in anticipation of regulatory divergence over time, Delfas said. The authority has reviewed in detail roughly 50 pieces of EU financial services legislation, and 185 technical standards and will consult on changes in the next few months.The UK has already agreed to implement a regulatory equivalence approach from 29 March next year, meaning there would be no immediate changes to rules for firms operating into or out of the UK.“Neither the UK nor the EU wants to see a significant misalignment in regulatory standards – nor indeed ‘a race to the bottom’ in regulatory standards,” Delfas said. “But it is likely that after our exit from the EU, our regulatory frameworks may evolve. So we need to find a way to ensure that despite such evolution, frameworks allow delivery of common outcomes.”In a white paper last week outlining its approach to Brexit, the UK government set out its intention to run rules in parallel on an “outcomes basis” – essentially meaning rules may differ but the objective would be the same.Delfas said: “What matters more is not what road we take, but what that final destination is – and as long as the UK and the EU maintain a commitment to protecting consumers and to strong, open markets, there is no reason this cannot work in practice.“This is a clearly achievable aim. Not least because it is overwhelmingly in the interests of both the UK and EU: it is in the interests of UK and EU consumers; it is in the interests of UK and EU firms; it is in the interests of UK and EU markets.“We hope that we can see progress on this in the very near future.” Delfas said a “bilateral solution” in cooperation with the EU “would be preferable”. The FCA was taking part in a group set up by the Bank of England and the European Central Bank to discuss risks related to Brexit, including contract continuity, she added. The UK’s financial regulator has called for action from its European counterparts to help avoid significant detriment to markets and consumers as the UK leaves the European Union.As much as £26trn (€29trn) worth of derivatives contracts could be negatively affected by Brexit, according to Nausicaa Delfas, the Financial Conduct Authority’s (FCA) executive director of international. Such disruption could hurt insurers and pension funds employing liability-driven investment strategies.Speaking at a Bloomberg event in London yesterday, Delfas called for cooperation between EU and UK regulators to allow such assets to continue trading.“If this is not achieved, there is a risk that some of these contracts could not be appropriately serviced,” she said. “In concrete terms, insurers may not be permitted to pay out claims on policies, and derivatives users may not be able to manage the risks of their positions.”