2024-06-28 19:11
WASHINGTON, June 28 (Reuters) - The Supreme Court's move to curb federal agency powers could curtail efforts by the U.S. Securities and Exchange Commission to establish new rules to police Wall Street and invite more litigation, legal experts said in the wake of Friday's landmark ruling. The court overturned a 1984 precedent that had given deference to government agencies in interpreting laws they administer. The decision raises the specter of fresh grounds on which to challenge the markets watchdog in court as it rolls out new policies or seeks to regulate new corners of the markets. The SEC is already fending off an increasing legal assault from public companies, major Wall Street firms and well-heeled cryptocurrency players. The SCOTUS decision, made 6-3, is likely to tie the SEC's hands as it rolls out new rules, according to half a dozen legal experts. The SEC did not respond to a request for comment. SEC Chair Gary Gensler told Reuters this month that the agency pivots as required by courts' interpretation of the law. The ruling is a "game-changer," said Richard Hong, a former SEC trial lawyer and partner with the Morrison Cohen law firm. The SEC will likely have more reason to pause before acting when seeking to police new financial instruments, said Cary Coglianese, a law professor at the University of Pennsylvania who specializes in regulation. "It will make it more difficult for agencies to adapt their understandings of statutes in the face of new circumstances," Coglianese said. The precedent, known as the Chevron deference after a ruling involving the U.S. oil company, had been cited by the SEC and other agencies in prior court cases to justify new regulatory efforts, as they deemed the activities within their purview. But now it would fall solely to a court to determine if the agency is acting within the law, which experts said could have a chilling effect. Proponents of the approach argue that the Chevron deference allows federal regulatory bodies to adapt to changing times and circumstances. But the Chevron doctrine has come under growing criticism from conservatives, arguing it allows rule-writers to overstep their legal authorities. While the SEC and other regulators have other tools on which to lean, Chevron has been a bedrock of agency rulemaking. Between 2003 and 2013, Chevron was applied 66.7% of the time when litigating SEC rules in circuit courts and in those cases the agency won just over 81%, according to 2017 research published in the Michigan Law Review New Tab, opens new tab. "Going forward, agency action will be under even greater scrutiny and there will likely be more opportunities for the regulated community to challenge agency rules and adjudications," said Varu Chilakamarri, a partner at K&L Gates. Friday's ruling is the latest effort of the conservative "war on the administrative state", which aims to weaken federal agencies across the board. Gensler's ambitious agenda has made the agency, which oversees around 40,000 entities, a top target. The SEC stayed this year's landmark climate disclosure rule due to legal challenges. A federal appeals court this month struck down its overhaul of private fund oversight on the grounds the agency exceeded its authorities. “The challenge to the SEC’s climate rule was already poised to be a difficult fight for the agency," said Leah Malone, leader of Simpson Thacher’s ESG and sustainability practice. Friday's shift "raises even further questions about the survival of the climate rule, as well as other pending rule proposals that have been in the spotlight,” Malone said. Friday's ruling is the second blow to the SEC's authority in as many days from the Supreme Court. On Thursday, the justices ruled the agency's reliance on in-house courts to handle enforcement cases was unconstitutional. "If yesterday’s decision was causing tremors, causing some dishes to tumble out from the cupboards, today’s case is a Richter-7 earthquake," said Hong. Sign up here. https://www.reuters.com/legal/wall-streets-top-regulator-faces-worsening-battle-wake-supreme-court-ruling-2024-06-28/
2024-06-28 18:43
LISBON/BRASILIA, June 28 (Reuters) - Brazilian central bank chief Roberto Campos Neto said on Friday that investors' lack of confidence in the government's ability to improve public accounts impacts long-term interest rates and inflation expectations, and that market prices are important because they indicate where the problem lies. Campos Neto made his comments amid a new round of weakening of the Brazilian real against the U.S. dollar and sharp rises in interest rate futures due to fiscal worries and comments by leftist President Luiz Inacio Lula da Silva. Speaking at another event, monetary policy director Gabriel Galipolo acknowledged that the currency has depreciated rapidly, diverging from its peers. Campos Neto, speaking at the Lisbon Legal Forum, said that fiscal adjustments made exclusively on the revenue side end up disrupting long-established tax relationships, creating legal uncertainty. Galipolo, seen as a front-runner to succeed Campos Neto once his term ends in December, noted that the fiscal adjustment process is not always as quick or linear as desired, but pondered that is part of democracy. Speaking to university students at an event in Brazil, he said the central bank needs to assess how much of the deterioration in the real compared with its peers represents an additional concern. "We are always looking at how the pass through to current inflation and expectations occurs," he said. Lula's administration has emphasized it will seek to balance public accounts by increasing revenue and eliminating undue tax advantages. More recently, Lula started acknowledging the need for spending cuts when excesses are identified, while ruling out structural adjustments to the policy of raising pension benefits and the minimum wage. Campos Neto also stressed the importance of anchoring inflation expectations to the government's target for consumer prices, calling them a "fundamental" variable. These expectations in Brazil have been diverging from the 3% inflation target, a key factor cited by the central bank for its decision to halt its easing cycle last week and maintain the benchmark interest rate at 10.5%. Campos Neto said he was not making specific considerations about Brazil but rather providing an analysis of post-pandemic economic dynamics. Earlier on Friday, Lula again criticized the high level of interest rates amid inflation of around 4% and directly targeted Campos Neto, urging the central bank to act on recent currency movements. "Why is the dollar rising? Because there is speculation with derivatives aiming to appreciate the dollar and depreciate the real. And the central bank has the obligation to investigate this," Lula said in an interview with a local radio station. Sign up here. https://www.reuters.com/markets/brazils-campos-neto-says-lack-confidence-handling-public-accounts-impacts-market-2024-06-28/
2024-06-28 18:18
WASHINGTON, June 28 (Reuters) - The U.S. Securities and Exchange Commission on Friday sued cryptocurrency firm Consensys, alleging it has failed to register as a broker through its MetaMask swaps service. Consensys also failed to register the offer and sale of certain securities through its crypto staking programs, which allow users to lock up tokens for a certain period of time in exchange for yield, the SEC said. The regulator said in its complaint, which was filed in U.S. District Court in Brooklyn, New York, that Consensys had collected more than $250 million in fees through "its conduct as an unregistered broker." Consensys operates the popular MetaMask self-custodial crypto wallet, which enables crypto owners to store their assets as well as buy, send and swap tokens. Consensys did not immediately respond to a request for comment. In April, Consensys sued the SEC after the firm said it received a formal notice from the agency that it planned to bring an enforcement action against the company. In the lawsuit, Consensys said the SEC was attempting to "unlawfully regulate" ether -- the world's second largest cryptocurrency -- through enforcement actions. Consensys said via a social media post on June 19 that it had received notice that the SEC had closed its investigation into the company. Still, the company said it would continue its lawsuit in pursuit of a court ruling that the SEC does not have legal authority to regulate software interfaces built on the ethereum blockchain. Sign up here. https://www.reuters.com/legal/us-sec-sues-blockchain-software-technology-company-consensys-2024-06-28/
2024-06-28 18:12
BERLIN, June 28 (Reuters) - Germany's economy ministry said on Friday it was drafting a law to expedite the approval processes for geothermal plants, heat pumps and heat storage systems, as Berlin aims to phase out fossil fuels in its heating system by 2045. Germany is home to one of Europe's biggest geothermal reserves, which have been largely untapped due to local opposition and bureaucratic hurdles. Surging energy prices in 2022 triggered new interest in the renewable energy source, with big municipal utilities, and German and international fossil fuel companies exploring possible investments in the country. The geothermal energy sector in Europe's biggest economy has been calling for a law to expand the energy source's potential and remove many obstacles, including local opposition against drilling and low government subsidies. Geothermal energy could cover more than a quarter of Germany's annual heat demand with a production potential of over 300 terawatt hours, a study by Fraunhofer Institute showed last year. Geothermal energy and lithium producer Vulcan Energy Resources (VUL.AX) New Tab, opens new tab, , which is listed in both Australia and Germany, called the law a "forward-looking, groundbreaking milestone". "We believe that geothermal heat and power is not only a cornerstone of Germany's renewable energy future, but also a critical component in achieving energy security, reducing carbon emissions and fostering sustainable economic growth," CEO Cris Moreno said. The draft law seeks to streamline bureaucratic procedures and address legal barriers to support a faster and more efficient expansion of renewable heat sources. "As with wind turbines and PV systems, these systems for generating geothermal energy as well as heat pumps and heat storage systems should ... also be given an overriding public interest," the ministry said, adding some approval procedures for geothermal projects currently take years. Berlin aims to expand geothermal energy generation so it could feed 10 times as much energy into the heating network as it does today by 2030, Scholz said last year, adding that the number of geothermal power stations will rise to 54 from 42 in the future. "By 2030, 10 terawatt hours (TWh) are to be generated from geothermal energy. The law lays the foundations for this," the ministry added. Sign up here. https://www.reuters.com/business/energy/germany-expedite-approval-processes-geothermal-plants-2024-06-28/
2024-06-28 18:11
Canadian dollar strengthens 0.3% against the greenback Touches an earlier 10-day low at 1.3734 For the quarter, the loonie weakens 0.9% Bond yields rise/fall across the curve TORONTO, June 28 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday as domestic data showed the economy growing in both April and May, but the currency still posted its second straight quarterly decline. The loonie was trading 0.3% higher at 1.3665 to the U.S. dollar, or 73.18 U.S. cents, regaining some ground after it earlier touched its weakest level since June 18 at 1.3734. For the month, the currency weakened 0.3% as the Bank of Canada became the first G7 central bank to cut interest rates, while it was down 0.9% for the second quarter. Canada's gross domestic product increased 0.3% in April, matching market expectations, as growth rebounded in sectors including wholesale trade and manufacturing, while an advanced estimate showed the economy expanding a further 0.1% in May. "After struggling to grow at all through the last three quarters of 2023, the Canadian economy is showing a bit more of a pulse so far this year," Doug Porter, chief economist at BMO Capital Markets, said in a note. "On balance, growth is holding up a touch better than widely expected in 2024, but remains generally lacklustre." Investors see a roughly 45% chance the BoC would ease further at its next policy decision on July 24, down from 65% before hotter-than-expected domestic inflation data on Tuesday. The U.S. dollar (.DXY) New Tab, opens new tab edged lower against a basket of major currencies, giving back some recent gains, as U.S. inflation data bolstered expectations the Federal Reserve would start cutting interest rates this year. Canadian bond yields were mixed across a steeper curve in a shortened session ahead of a market holiday for Canada Day on Monday. The 10-year was up 3.1 basis points at 3.507%, approaching the two-week high it touched during Thursday's session at 3.522%. Sign up here. https://www.reuters.com/markets/currencies/c-gains-economy-shows-more-pulse-posts-quarterly-loss-2024-06-28/
2024-06-28 18:03
June 28 (Reuters) - U.S. energy firms this week cut the number of oil and natural gas rigs operating for a fourth week in a row to the lowest since December 2021, energy services firm Baker Hughes (BKR.O) New Tab, opens new tab said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, fell by seven to 581 in the week to June 28. , , Baker Hughes said that puts the total rig count down 93 rigs, or 14%, below this time last year. Baker Hughes said oil rigs fell six to 479 this week, their lowest since December 2021, while gas rigs fell one to 97, their lowest since 2021. For the month, the gas rig count fell for the fourth straight month for the first time since July 2020. For the quarter, the total oil and gas rig count fell for a sixth quarter in a row for the first time since 2020. Drillers cut the total number of active rigs in Texas by five to 277, the lowest since January 2022, and cut the count in Oklahoma by one to 34 rigs, the lowest since September 2021. In shale basins, drillers cut the total number of active rigs in the Permian in West Texas and eastern New Mexico by three to 305, the lowest since February 2022, and in the Eagle Ford in South Texas by 3 to 47, the lowest since January 2022. The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output. U.S. oil futures were up about 14% so far in 2024 after dropping by 11% in 2023, while U.S. gas futures were up about 4% so far in 2024 after plunging by 44% in 2023. Sign up here. https://www.reuters.com/markets/commodities/us-drillers-cut-oil-gas-rigs-fourth-week-row-baker-hughes-2024-06-28/
