(LLOY.L) Lloyds Banking Group PLC Buy/Sell

By Jane Merriman

LONDON, Nov 20 (Reuters) - Investment bankers are already pitching to clients a new form of hybrid bond that financial regulators see as a potential saviour of troubled banks, but it is uncertain if they will work or if investors will buy them.
The bonds, which convert to equity if a bank's capital runs low, have been created for Lloyds as part of a 21 billion pound ($34.63 billion) capital raising to free the UK bank from a government insurance scheme for bad loans.
The new Lloyds' hybrids -- known as enhanced capital notes -- are a special case because the bank is offering them to investors in exchange for bonds where coupon payments will be deferred for two years.
These investors are expected to bite because they will get a higher coupon rather than no coupon.
One banker likened it to a forced exchange. As such, the real test for contingent convertibles (CoCos) will come if and when other banks decide to issue them.
"CoCos will have a role if they are priced efficiently by the market and this is where we have to still see more new deals coming to the market which are not part of an exchange," said Thibaut Adam, head of capital markets structuring at BNP Paribas.
"We need to see new issues from stronger names and see how they price." He said there were proposals in the United States to have systemically important banks issue these instruments.
Hybrid structurers said that the price needs to be attractive relative to the cost of raising true equity capital.
A number of financial regulators have given their support to CoCos, including the Bank of England.
"All the regulators are looking at them," said Thomas Huertas, FSA banking sector director. "It's a rapidly evolving area where a consensus is developing," he said, speaking on the sidelines of a Citi European Credit Conference.
"We'll look to see how the Lloyds' ECNs (hybrids) go." The results of Lloyds' bond exchange are due on Monday.
Huertas said CoCos would be discussed by regulators at the Basel Committee on Banking Supervision in December.
CoCos' selling point with regulators is that they convert into equity just when a bank needs more equity. And equity is the kind of bank capital regulators like because it can absorb losses while the bank is still a going concern.
In Lloyds' case, the bonds would convert if the UK bank's capital fell to 5 percent.
"Technically, the bank gets more capital in because the CoCos convert," said Gary Jenkins, head of fixed income research at Evolution Securities.
"It's got to be a positive and it's better than what we had before, but it doesn't necessarily mean it saves it."
Jenkins said most troubled banks fail because of liquidity problems, which would not be solved, even by a capital injection from CoCos.

Bond investors have so far given Cocos a cool reception.
Bank of America Merrill Lynch, for example, had to row back on a decision to include them in its bond indexes after investors objected.
Investors say CoCos do not really have the characteristics of traditional bonds, which should offer stable cashflows and relatively low-risks.
"There will be people who opportunistically use them," said Lise Coleman, head of global credit fixed income at JP Morgan Asset Management. "It's a way of getting a higher beta play into your portfolio. But it won't be the traditional buyer base... it will be a different universe."
The type of investors attracted to CoCos could pose questions for regulators.
"Would it be an issue for the FSA who provides this (capital) buffer?," said Oliver Judd, financials analyst at Aviva Investors. "Is it a long-term stable investor base or a more short-term volatile investor base?"
CoCos could evolve to reassure mainstream investors.
One additional feature under consideration is that the bonds convert into a variable number of shares, bankers said. Another issue is whether regulators would have some discretion over when to activate the conversion, they said.
With regulatory momentum behind them, CoCos could gain some credibility, but bankers said they doubted if a brand new CoCo bond could come to market before Christmas.
"But would someone start to add a sort of contingent spin on Tier 1 issuance in 2010? Well, we are certainly pitching for that and people are listening," said Adam.

($1=.6064 Pound)

(Additional reporting by Claire Milhench; editing by Simon Jessop) Keywords: BANKS COCOS (jane.merriman@thomsonreuters.com; +44 207 542 3121; Reuters Messaging:jane.merriman.reuters.com@reuters.net)

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RNS Number : 8608C Lloyds Banking Group PLC 20 November 2009

FORM 8.3

DEALINGS BY PERSONS WITH INTERESTS IN SECURITIES REPRESENTING 1% OR MORE

(Rule 8.3 of the Takeover Code)

1. KEY INFORMATION
Name of person dealing (Note Lloyds Banking Group plc
1) and its subsidiaries
Company dealt in Care UK plc
Class of relevant security to Ordinary 10p

which the dealings being disclosed relate (Note 2)
Date of dealing 19 November 2009
2. INTERESTS, SHORT POSITIONS AND RIGHTS TO SUBSCRIBE

(a) Interests and short positions (following dealing) in the class of relevant security dealt in (Note 3)

Long Short
Number (%) Number (%)
(1) Relevant securities 6,274,981 (10.240%)

(2) Derivatives (other than options) (3) Options and agreements to purchase/sell
Total 6,274,981 (10.240%)

(b) Interests and short positions in relevant securities of the company, other than the class dealt in (Note 3)

Class of relevant security: Long Short
Number (%) Number (%)

(1) Relevant securities (2) Derivatives (other than options) (3) Options and agreements to purchase/sell Total

(c) Rights to subscribe (Note 3)

Class of relevant security: Details

3. DEALINGS (Note 4)
(a) Purchases and sales

Purchase/sale Number of securities Price per unit (Note 5)
Sale 600 £3.540

(b) Derivatives transactions (other than options)

Product name, e.g. CFD Long/short (Note 6) Number of securities Price per unit (Note
(Note 7) 5)

(c) Options transactions in respect of existing securities

(i) Writing, selling, purchasing or varying

Product name,e.g. call option Writing, selling, Number of securities Exercise price Type, e.g. American, Expiry date Option money
purchasing, varying to which the option European etc. paid/received per
etc. relates (Note 7) unit (Note 5)
(ii) Exercising

Product name, e.g. call option Number of securities Exercise price per unit (Note 5)

(d) Other dealings (including new securities) (Note 4)

Nature of transaction (Note 8) Details Price per unit (if applicable) (Note

4. OTHER INFORMATION

Agreements, arrangements or understandings relating to options or derivatives

Full details of any agreement, arrangement or understanding between the person disclosing and any other person relating to the voting rights of any relevant securities under any option referred to on this form or relating to the voting rights or future acquisition or disposal of any relevant securities to which any derivative referred to on this form is referenced. If none, this should be stated.

RNS Number : 8607C Lloyds Banking Group PLC 20 November 2009

FORM 8.3

DEALINGS BY PERSONS WITH INTERESTS IN SECURITIES REPRESENTING 1% OR MORE

(Rule 8.3 of the Takeover Code)

1. KEY INFORMATION
Name of person dealing (Note Lloyds Banking Group plc
1) and its subsidiaries

Company dealt in Neuropharm Group plc

Class of relevant security to Ordinary 10p

which the dealings being disclosed relate (Note 2)
Date of dealing 19 November 2009
2. INTERESTS, SHORT POSITIONS AND RIGHTS TO SUBSCRIBE

(a) Interests and short positions (following dealing) in the class of relevant security dealt in (Note 3)

Long Short
Number (%) Number (%)
(1) Relevant securities 3,033,071 (9.618%)

(2) Derivatives (other than options) (3) Options and agreements to purchase/sell
Total 3,033,071 (9.618%)

(b) Interests and short positions in relevant securities of the company, other than the class dealt in (Note 3)

Class of relevant security: Long Short
Number (%) Number (%)

(1) Relevant securities (2) Derivatives (other than options) (3) Options and agreements to purchase/sell Total

(c) Rights to subscribe (Note 3)

Class of relevant security: Details

3. DEALINGS (Note 4)
(a) Purchases and sales

Purchase/sale Number of securities Price per unit (Note 5)
Sale 400 £0.150

(b) Derivatives transactions (other than options)

Product name, e.g. CFD Long/short (Note 6) Number of securities Price per unit (Note
(Note 7) 5)

(c) Options transactions in respect of existing securities

(i) Writing, selling, purchasing or varying

Product name,e.g. call option Writing, selling, Number of securities Exercise price Type, e.g. American, Expiry date Option money
purchasing, varying to which the option European etc. paid/received per
etc. relates (Note 7) unit (Note 5)
(ii) Exercising

Product name, e.g. call option Number of securities Exercise price per unit (Note 5)

(d) Other dealings (including new securities) (Note 4)

Nature of transaction (Note 8) Details Price per unit (if applicable) (Note

4. OTHER INFORMATION

Agreements, arrangements or understandings relating to options or derivatives

Full details of any agreement, arrangement or understanding between the person disclosing and any other person relating to the voting rights of any relevant securities under any option referred to on this form or relating to the voting rights or future acquisition or disposal of any relevant securities to which any derivative referred to on this form is referenced. If none, this should be stated.

By Mark Potter

LONDON, Nov 20 (Reuters) - Tesco, Britain's biggest retailer, took a further step on its journey to become a force in banking by signing up U.S. group Fiserv to provide the technology platform for its financial services business.
The supermarket group said on Friday, the second day of presentations to investors about its ambition to grow in retail services, that Fiserv would help it to make the leap from a collection of financial products to a full-service bank.
Tesco bought Royal Bank of Scotland out of a financial joint venture in July 2008 and unveiled plans to double profits from its retail services businesses, such as banking, to 1 billion pounds ($1.7 billion) over several years.
It has since gone on a staff recruitment drive, started testing bank branches within stores and signed an insurance deal with Fortis. It is also benefiting from discontent with traditional banks following the financial market crisis.
In presentation slides on its Web site, Tesco said it has 6 million customer accounts, with its credit card business growing at an annual rate of about 10 percent, personal loans growing at 19 percent and instant access savings accounts at 28 percent.
Transactions at its travel money business are up over 100 percent, it added.
The group said its banking business would initially target its most loyal shoppers -- the 15 million members of its Clubcard loyalty scheme.
Just 10 percent of Clubcard holders have a Tesco credit card, currently its biggest financial business, while only 4.2 percent have Tesco car insurance and 2.2 percent a Tesco savings product, it said.
Some analysts have speculated whether it might be interested in buying assets from bailed-out banks like Lloyds, RBS and Northern Rock.
However, Tesco Bank chief executive Benny Higgins said on Tuesday he was focusing on organic growth, with plans to introduce a Tesco current account and possibly also mortgages over the next couple of years.
Presentation slides from banking commercial director David McCreadie said it would take time to develop the right proposition on current accounts.
Expansion into mortgages would also require the development of a broader source of funding for the bank, he noted.
Tesco said on Thursday it was also aiming to build a telecoms business generating 2 billion pounds a year of sales over the medium term.
The world's third-biggest retailer, which has around 30 percent of Britain's grocery market, is looking to retail services along with international expansion as a way of generating new, and often more profitable, revenue streams.
At 1240 GMT, its shares were down 1.1 percent at 420.5 pence, in line with the DJ Stoxx European retail index.
Fiserv provides information management and electronic commerce systems for the financial services industry.

($1=.6002 Pound)

(Editing by Jon Loades-Carter) Keywords: TESCO/ (mark.r.potter@thomsonreuters.com; +44 20 7542-2943; Reuters Messaging: mark.potter.reuters.com@reuters.net)

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RNS Number : 8606C Lloyds Banking Group PLC 20 November 2009

FORM 8.3

DEALINGS BY PERSONS WITH INTERESTS IN SECURITIES REPRESENTING 1% OR MORE

(Rule 8.3 of the Takeover Code)

1. KEY INFORMATION
Name of person dealing (Note Lloyds Banking Group plc
1) and its subsidiaries

Company dealt in Cadbury plc

Class of relevant security to Ordinary 10p

which the dealings being disclosed relate (Note 2)
Date of dealing 19 November 2009
2. INTERESTS, SHORT POSITIONS AND RIGHTS TO SUBSCRIBE

(a) Interests and short positions (following dealing) in the class of relevant security dealt in (Note 3)

Long Short
Number (%) Number (%)
(1) Relevant securities 21,354,505 (1.557%)

(2) Derivatives (other than options) (3) Options and agreements to purchase/sell
Total 21,354,505* (1.557%)

LONDON, Nov 20 (Reuters) - Tesco, Britain's biggest retailer, will initially focus on its most loyal shoppers as it seeks to build its new banking business, it said on Friday.
The supermarket group, on the second day of presentations to investors about its ambition to expand into retail services, said Tesco Bank would initially target the 15 million members of its Clubcard customer loyalty scheme.
In presentation slides on its website, Tesco said just 10 percent of Clubcard holders had a Tesco credit card, currently its biggest financial business, while only 4.2 percent had Tesco car insurance and 2.2 percent a Tesco savings product.
Tesco unveiled plans in July 2008, when it bought Royal Bank of Scotland out of a financial joint venture, to double annual profits from its retail services businesses, such as banking, to 1 billion pounds ($1.7 billion) over several years.
It has since gone on a staff recruitment drive, started testing bank branches in stores and signed an insurance joint venture with Fortis, and currently has around 6 million customer accounts.
Analysts have speculated whether it might be interested in buying assets from bailed-out banks like Lloyds, RBS and Northern Rock.
However, Tesco Bank chief executive Benny Higgins said on Tuesday he was focusing on organic growth, with plans to introduce a Tesco current account and possibly also mortgages over the next couple of years.
Tesco said on Thursday it was also aiming to build a telecoms business generating 2 billion pounds a year of sales over the medium term.
At 1140 GMT, its shares were down 0.6 percent at 422.15 pence, in line with the DJ Stoxx European retail index.

($1=.6002 Pound)

(Reporting by Mark Potter; Editing by Jon Loades-Carter) Keywords: TESCO/ (mark.r.potter@thomsonreuters.com; +44 20 7542-2943; Reuters Messaging: mark.potter.reuters.com@reuters.net)

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By Huw Jones

LONDON, Nov 19 (Reuters) - Britain's financial watchdog will have powers to claw back bank bonuses that breach globally agreed rules on remuneration and force hedge funds to provide data, a draft law published on Thursday showed.
The draft law's main provisions were announced by the government on Wednesday and enforce pledges Britain and other members of the G20 group of leading countries made this year to apply lessons from the credit crunch.
"The bill we are introducing today is central to the government's reform agenda that seeks to empower consumers and make sure that, in the future, taxpayers will not be called on to protect banks from the consequences of their actions," Britain's Finance Minister Alistair Darling said in a statement.

The Financial Services Authority (FSA) will have "information gathering powers extended to non-regulated firms, including hedge funds, where information is relevant to financial stability", the draft law says.
Hedge fund managers are already required to register and provide data. The European Union is adopting a law with similar provisions.
The FSA will have a new, explicit objective of helping to ensure financial stability, giving it a bigger role in monitoring and assessing risk that could destabilise the broader financial system -- a supervisory gap the credit crunch highlighted in many countries.
"The measures in the bill, particularly under the proposed financial stability objective, will give the FSA more powers to carry out its remit from parliament in a more effective manner," an FSA spokesman said.

BOE BACK ON TOP?
The opposition Conservative Party, tipped by pollsters to win the election due by June, has said it wants to abolish the FSA, saying its joint "tripartite" supervision of banks with the Bank of England and Treasury had failed.
"Instead we need to put the Bank of England back in charge because only central banks have the authority and the judgment that is needed," the party's treasury spokesman, George Osborne, said in the London Evening Standard newspaper.
Britain's financial services minister Paul Myners said there were no plans for tearing up existing pay contracts.
"That's an abrogation of legal contracts which governments should not contemplate," Myners told Sky News television.
"What we are saying is that going forward all contracts have to comply with the framework specified by the FSA, and if a bank were to offer a contract which the FSA regarded as reckless... then that contract could be voided and penalties could arise," Myners said.
He does not expect this to happen in practice and banks are keen on the provision as it will help them "manage better the greed they have been confronted" with.

FIRMS' FSA FEARS
Lawyers said firms will be able to get out of bonus payments by referring to regulatory obligations.
Paul Edmondson of law firm CMS Cameron McKenna said FSA powers on pay, living wills and enforcement won't be restricted to banks but apply to all authorised firms and insurers.
"Firms will be concerned about inappropriate read across from the banking crisis," Edmondson said.
The bill will also give the FSA powers to curb short-selling and require disclosure on short selling, a practice favoured by some hedge funds and blamed by policymakers for amplifying selloffs in bank shares at the height of the credit crunch.
Such measures have already been used by the FSA.
The watchdog will also have a duty to require firms to plan for their possible demise by drawing up "living wills" or recovery and resolution plans for a speedy wind down that avoids the need for taxpayer bailouts.
The G20 wants all major financial firms to draw up living wills by the end of 2010 and the FSA has already announced that several banks are taking part in a pilot scheme to complete first drafts of living wills in coming weeks.
The bill also contains provisions on pay in light of a UK government commissioned review by former top banker David Walker on how to strengthen corporate governance and make boards more accountable for a bank's activities.
The final version of the Walker Review is published on Nov. 26 but the government has already said it backs the findings of a preliminary version released this year.
There will also be a new Financial Services Compensation Scheme to compensate British customers of overseas financial firms. Britain had to step in to safeguard deposits held by UK customers of failing Icelandic banks.
For a Take A Look on financial regulation, click on

(Additional reporting by Avril Ormsby; Editing by Andy Bruce/Victoria Main) Keywords: BRITAIN FINANCIAL/ (Reuters messaging: huw.jones.reuters.com@reuters.net; + 44 207 542 3326; huw.jones@thomsonreuters.com)

COPYRIGHT

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RNS Number : 8053C ITE Group PLC 19 November 2009

TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARES

1. Identity of the issuer or the underlying issuer of existing ITE Group plc shares to which voting rights are attached:

2 Reason for the notification (please tick the appropriate box or boxes):
X

An acquisition or disposal of voting rights An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments An event changing the breakdown of voting rights

Other (please specify):

3. Full name of person(s) subject to the Lloyds Banking Group plc

notification obligation:

4. Full name of shareholder(s) (if See Section 9

different from 3.):

5. Date of the transaction and date on 18 November 2009

which the threshold is crossed or reached:

6. Date on which issuer notified: 19 November 2009
7. Threshold(s) that is/are crossed or Direct/Indirect holding above 5%

reached:

8. Notified details: A: Voting rights attached to shares

Class/type of Situation previous Resulting situation after the triggering transaction
shares to the triggering
transaction

if possible using the ISIN CODE
Number Number Number Number of voting % of voting
of of of shares rights rights
Shares Voting
Rights
Direct Direct Indirect Direct Indirect
Ord 1p N/A N/A 412,639 412,639 12,093,409 0.166% 4.874%

B: Qualifying Financial Instruments Resulting situation after the triggering transaction

Type of financial Expiration Exercise/ Number of voting % of voting
instrument date Conversion rights that may be rights
Period acquired if the
instrument is
exercised/
converted.

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments Resulting situation after the triggering transaction

Type of financial Exercise Expiration Exercise/ Number of voting % of voting rights
instrument price date Conversion rights instrument
period refers to
Nominal Delta

Total (A+B+C)

Number of voting rights Percentage of voting rights
12,506,048 5.040%

9. Chain of controlled undertakings through which the voting rights and/or the financial instruments are effectively held, if applicable:

12,492,968 shares (5.035%) are under the control of Scottish Widows Investment Partnership Ltd, a wholly owned subsidiary of Scottish Widows Group Ltd, a wholly owned subsidiary of Lloyds TSB Bank plc, a wholly owned subsidiary of Lloyds Banking Group plc (Indirect Interests).

Proxy Voting:

10. Name of the proxy holder: N/A
11. Number of voting rights proxy holder will cease to hold: N/A

12. Date on which proxy holder will cease to hold voting rights: N/A

13. Additional information: Notification using
the total voting
rights figure of
248,122,702
14. Contact name: Matthew Wilson
15. Contact telephone number: 0113 235 7729

B: Identity of the notifier, if applicable
Full name Mr. Anil. H. Gadhia.
Contact address I T E Group plc, 105 Salusbury Road,
London. NW6 6RG.
Phone number & email 020 7596 5024.
anil.gadhia@ite-exhibitions.com

Other useful information (e.g. functional relationship with the person or legal entity subject to the notification obligation)

This information is provided by RNS The company news service from the London Stock Exchange

HOLILFLRLALALIA

RNS Number : 8036C Scottish Oriental Smlr Co Tst PLC 19 November 2009

TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARESi

1. Identity of the issuer or the underlying issuer The Scottish Oriental Smaller Companies
of existing shares to which voting rights are Trust Plc

attached: ii 2 Reason for the notification (please tick the appropriate box or boxes):
An acquisition or disposal of voting rights X

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments An event changing the breakdown of voting rights
Other (please specify): Disclosure of holdings following the sale of Insight Investment X
Management Limited on 2 November 2009. This notification
supersedes any notifications previously issued by Lloyds Banking
Group plc
3. Full name of person(s) subject to the Lloyds Banking Group plc

notification obligation: iii
4. Full name of shareholder(s) See section 9

(if different from 3.):iv
5. Date of the transaction and date on 2 November 2009

which the threshold is crossed or reached: v
6. Date on which issuer notified: 4 November 2009
7. Threshold(s) that is/are crossed or N/A - Direct/indirect holdings remains above 8%

reached: vi, vii 8. Notified details: A: Voting rights attached to shares viii, ix
Class/type of Situation previous Resulting situation after the triggering transaction
shares to the triggering
transaction

if possible using the ISIN CODE
Number Number Number Number of voting % of voting rights x
of of of shares rights
Shares Voting
Rights
Direct Direct xi Indirect xii Direct Indirect
Ord 25p shares 2,422,233 2,422,233 48,468 48,468 2,472,675 0.160% 8.184%

B: Qualifying Financial Instruments Resulting situation after the triggering transaction
Type of financial Expiration Exercise/ Number of voting % of voting
instrument date xiii Conversion Period xiv rights that may be rights
acquired if the
instrument is
exercised/ converted.

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi Resulting situation after the triggering transaction
Type of financial Exercise price Expiration date xvii Exercise/ Number of voting rights instrument refers to % of voting rights xix, xx
instrument Conversion period xviii
Nominal Delta

Total (A+B+C)
Number of voting rights Percentage of voting rights
2,521,143 8.344%

9. Chain of controlled undertakings through which the voting rights and/or the financial instruments are effectively held, if applicable: xxi

2,506,407 shares (8.296%) are under the control of Scottish Widows Investment Partnership Ltd, a wholly owned subsidiary of Scottish Widows Group Ltd, a wholly owned subsidiary of Lloyds TSB Bank plc, a wholly owned subsidiary of Lloyds Banking Group plc (Indirect Interests).

Proxy Voting:
10. Name of the proxy holder: N/A
11. Number of voting rights proxy holder will cease N/A

to hold:
12. Date on which proxy holder will cease to hold N/A

voting rights:

13. Additional information: Notification using the Total Voting Rights figure of 30,213,650
14. Contact name: Bridgette McDonald
15. Contact telephone number: +44 131 473 2270

This information is provided by RNS The company news service from the London Stock Exchange

HOLGUGGUGUPBGQB

RNS Number : 7989C Lloyds Banking Group PLC 19 November 2009

FORM 8.3

DEALINGS BY PERSONS WITH INTERESTS IN SECURITIES REPRESENTING 1% OR MORE

(Rule 8.3 of the Takeover Code)

1. KEY INFORMATION
Name of person dealing (Note Lloyds Banking Group plc
1) and its subsidiaries
Company dealt in Cadbury plc
Class of relevant security to Ordinary 10p

which the dealings being disclosed relate (Note 2)
Date of dealing 18 November 2009
2. INTERESTS, SHORT POSITIONS AND RIGHTS TO SUBSCRIBE

(a) Interests and short positions (following dealing) in the class of relevant security dealt in (Note 3)

Long Short
Number (%) Number (%)
(1) Relevant securities 21,318,083 (1.554%)

(2) Derivatives (other than options) (3) Options and agreements to purchase/sell
Total 21,318,083 (1.554%)

(b) Interests and short positions in relevant securities of the company, other than the class dealt in (Note 3)

Class of relevant security: Long Short
Number (%) Number (%)

(1) Relevant securities (2) Derivatives (other than options) (3) Options and agreements to purchase/sell Total

(c) Rights to subscribe (Note 3)

Class of relevant security: Details

3. DEALINGS (Note 4)
(a) Purchases and sales

Purchase/sale Number of securities Price per unit (Note 5)
Sale 21,066 £7.975
Sale 721 £7.983
Sale 695 £7.960
Sale 619 £7.996
Sale 438 £7.951
Sale 300 £7.992
Sale 241 £7.988

(b) Derivatives transactions (other than options)

Product name, e.g. CFD Long/short (Note 6) Number of securities Price per unit (Note
(Note 7) 5)

(c) Options transactions in respect of existing securities

(i) Writing, selling, purchasing or varying

Product name,e.g. call option Writing, selling, Number of securities Exercise price Type, e.g. American, Expiry date Option money
purchasing, varying to which the option European etc. paid/received per
etc. relates (Note 7) unit (Note 5)
(ii) Exercising

Product name, e.g. call option Number of securities Exercise price per unit (Note 5)

(d) Other dealings (including new securities) (Note 4)

Nature of transaction (Note 8) Details Price per unit (if applicable) (Note

4. OTHER INFORMATION

Agreements, arrangements or understandings relating to options or derivatives

Full details of any agreement, arrangement or understanding between the person disclosing and any other person relating to the voting rights of any relevant securities under any option referred to on this form or relating to the voting rights or future acquisition or disposal of any relevant securities to which any derivative referred to on this form is referenced. If none, this should be stated.

By Huw Jones

LONDON, Nov 19 (Reuters) - Britain's financial watchdog will have powers to claw back bank bonuses that breach globally agreed rules on remuneration and force hedge funds to provide data, a draft law published on Thursday showed.
The draft law's main provisions were announced by the government on Wednesday and enforce pledges Britain and other members of the G20 group of leading countries made this year to apply lessons from the credit crunch.
"The bill we are introducing today is central to the government's reform agenda that seeks to empower consumers and make sure that, in the future, taxpayers will not be called on to protect banks from the consequences of their actions," Britain's Finance Minister Alistair Darling said in a statement.

The Financial Services Authority (FSA) will have "information gathering powers extended to non-regulated firms, including hedge funds, where information is relevant to financial stability", the draft law says.
Hedge fund managers are already required to register and provide data. The European Union is also adopting a law with similar provisions.
The FSA will have a new, explicit objective of helping to ensure financial stability, giving it a bigger role in monitoring and assessing risk that could destabilise the broader financial system -- a supervisory gap the credit crunch highlighted in many countries.
"The measures in the bill, particularly under the proposed financial stability objective, will give the FSA more powers to carry out its remit from parliament in a more effective manner," an FSA spokesman said.
The opposition Conservative Party, tipped by pollsters to win the election due by June, wants to abolish the FSA and hand all individual bank and system-wide supervision to the Bank of England.
Britain's financial services minister Paul Myners said there were no plans for tearing up existing pay contracts.
"That's an abrogation of legal contracts which governments should not contemplate," Myners told Sky News television.
"What we are saying is that going forward all contracts have to comply with the framework specified by the FSA, and if a bank were to offer a contract which the FSA regarded as reckless... then that contract could be voided and penalties could arise," Myners said.
He does not expect this to happen in practice and banks are keen on the provision as it will help them "manage better the greed they have been confronted" with.
The bill will also give the FSA powers to curb short-selling and require disclosure on short selling, a practice favoured by some hedge funds and blamed by policymakers for amplifying selloffs in bank shares at the height of the credit crunch.
Such measures have already been used by the FSA.
The watchdog will also have a duty to require firms to plan for their possible demise by drawing up "living wills" or recovery and resolution plans for a speedy wind down that avoids the need for taxpayer bailouts.
The G20 wants all major financial firms to draw up living wills by the end of 2010 and the FSA has already announced that several banks are taking part in a pilot scheme to complete first drafts of living wills in coming weeks.
The bill also contains provisions on pay in light of a UK government commissioned review by former top banker David Walker on how to strengthen corporate governance and make boards more accountable for a bank's activities.
The final version of the Walker Review is published on Nov. 26 but the government has already said it backs the findings of a preliminary version released this year.
There will also be a new Financial Services Compensation Scheme to compensate British customers of overseas financial firms. Britain had to step in to safeguard deposits held by UK customers of failing Icelandic banks.

(Additional reporting by Avril Ormsby, editing by Andy Bruce) Keywords: BRITAIN FINANCIAL/ (Reuters messaging: huw.jones.reuters.com@reuters.net; + 44 207 542 3326; huw.jones@thomsonreuters.com)

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LONDON, Nov 19 (Reuters) - Britain's financial watchdog will have powers to claw back bank bonuses that breach globally agreed rules on remuneration and force hedge funds to provide data, a draft law published on Thursday showed.
The draft law's main provisions were announced by the government on Wednesday and enforce pledges Britain and other members of the G20 group of leading countries made this year to apply lessons from the credit crunch.
"The bill we are introducing today is central to the government's reform agenda that seeks to empower consumers and make sure that, in the future, taxpayers will not be called on to protect banks from the consequences of their actions," Britain's Finance Minister Alistair Darling said in a statement.

The Financial Services Authority (FSA) will have "information gathering powers extended to non-regulated firms, including hedge funds, where information is relevant to financial stability", the draft law says.
Hedge fund managers are already required to register and provide data. The European Union is also adopting a law with similar provisions.
The opposition Conservative Party, tipped by pollsters to win the election due by June, wants to abolish the FSA and hand all bank supervisory powers to the Bank of England.
The bill will also give the FSA powers to curb short-selling and require disclosure on short selling, a practice favoured by some hedge funds and blamed by policymakers for amplifying selloffs in bank shares at the height of the credit crunch.
Such measures have already been used by the FSA.
The watchdog will also have a duty to require firms to plan for their possible demise by drawing up "living wills" or recovery and resolution plans for a speedy wind down that avoids the need for taxpayer bailouts.
The G20 wants all major financial firms to draw up living wills by the end of 2010 and the FSA has already announced that several banks are taking part in a pilot scheme to complete first drafts of living wills in coming weeks.
The bill also contains provisions on pay in light of a UK government commissioned review by former top banker David Walker on how to strengthen corporate governance and make boards more accountable for a bank's activities.
The final version of the Walker Review is published on Nov. 26 but the government has already said it backs the findings of a preliminary version released this year.
There will also be a new Financial Services Compensation Scheme to compensate British customers of overseas financial firms. Britain had to step in to safeguard deposits held by UK customers of failing Icelandic banks.

(Reporting by Huw Jones, editing by Andy Bruce) Keywords: BRITAIN FINANCIAL/ (Reuters messaging: huw.jones.reuters.com@reuters.net; + 44 207 542 3326; huw.jones@thomsonreuters.com)

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LONDON, Nov 19 (Reuters) - Spain's Santander, the banking group which owns Britain's Abbey, Alliance & Leicester and Bradford & Bingley, will next year launch a no-fees current account, with no charges for overdraft use or access to foreign ATMs.
The account, called the Santander Zero Current Account, will only be available to customers who take out a mortgage with Santander and will be launched to coincide with the rebranding of over 1,000 Abbey and Bradford & Bingley branches in January 2010, the banking group said on Thursday.
"Our new approach is one based on simplicity: the more business you do with us, the more we will offer you in return," Santander's Chief Executive Antonio Horta-Osorio said in a statement.
Santander shares, which have risen a fifth in the last three months, were 0.6 percent down at 11.68 euros by 1014 GMT.
(Reporting by Rhys Jones; editing by Victoria Bryan) Keywords: SANTANDER BRITAIN/

(rhysl.jones@thomsonreuters.com; +44 207 542 4166; Reuters Messaging: rhysl.jones.reuters.com@reuters.net;)

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The Daily Telegraph

LLOYDS GETS EU GO-AHEAD AS IT PRICES "CO-COS" TO GO

European Union competition commissioner Neelie Kroes has granted approval for the state aid provided to Lloyds Banking Group. Kroes also gave the go-ahead to restructuring at Belgian bank KBC and Dutch bank ING. Kroes is yet to rule on the Royal Bank of Scotland, though clearance is expected to be a formality subject to some minor changes. Lloyds is raising 13.5 billion pounds in a rights issue and nine billion pounds by converting debt into hybrid capital instruments known as "contingent capital", or "co-cos".

LADBROKES BEEFS UP NON-EXECUTIVE FIELD

Sly Bailey, chief executive of newspaper group Trinity Mirror, and Darren Shapland, chief financial officer at J Sainsbury, have been appointed non-executive directors at betting group Ladbrokes. Ladbrokes chief executive Chris Bell said: "They are two very smart young people who will bring a new perspective to the board." None of the existing non-executive directors are to be replaced and the addition of Bailey and Shapland to the board brings the number of non-executives to eight. Ladbrokes has four executive directors.

BSKYB NOT RULING OUT BOLT-ON ACQUISITIONS, SAYS DARROCH

Jeremy Darroch, chief executive of satellite broadcaster BSkyB, told the Morgan Stanley Technology, Media and Telecoms conference in Barcelona that BSkyB is open to making "bolt-on" acquisitions "if they deliver good financial returns". Darroch said the broadcaster was also "acutely aware" of the need to see returns from investments in broadband and high definition technologies, and that international expansion was "not a priority". Shares in BSkyB closed up six pence at 550.5 pence.

The Times

GRANT THORNTON SLIPS FURTHER BEHIND THE BIG FOUR

The fifth-largest accounting firm in the UK, Grant Thornton, has revealed a four percent fall in full-year revenue to 378 million pounds, with profit per partner falling by 19 percent to 201,000 pounds. Although the results were not disastrous in the context of the present financial situation, they will be disappointing for observers hoping that Grant Thornton and its nearest competitor BDO Stoy Hayward could pose a threat to the "Big Four" accountancy firms -- Deloitte, PriceWaterhouseCoopers, Ernst & Young and KPMG.

CORPORATE BONDS FOR THE MASSES IN LSE INVESTOR DRIVE

The London Stock Exchange is planning to let small investors trade corporate bonds through a new electronic trading platform, which will be set up in February. Formerly, the minimum order size for most bonds was 50,000 pounds, with prices set in agreements between brokers rather than in a central marketplace. Under the new system, minimum order sizes will decline to a thousand pounds. Private brokers are reporting that interest in the instruments has skyrocketed as a result of the news.

BARRATT HOPES ECO-VILLAGE WILL LAY THE FOUNDATIONS FOR ALL

Work will begin on the UK's first zero-carbon housing development today. The 200 houses at Hanham Hall in Gloucestershire are being constructed by Barratt, who do not yet have an estimated cost for the development or for the properties once they have been built, as the development is the first of its kind. Allotments and greenhouses will be provided for residents, as will a shop selling local groceries and a biomass boiler. However, the Home Builders Federation has warned that the cost of a house in the area could be 30,000 pounds more than that of existing new-builds.

The Independent

CAPITA FALLS ON WORRIES OVER HITS FROM ARCH FUNDS

Capita was the largest faller on the FTSE 100 share index on Wednesday, following the announcement by the outsourcing company that it may end up bearing costs connected to two suspended Arch funds. The company's shares fell five percent following the announcement that Capita Financial Managers, which administers the funds, was in talks with the FSA regarding the suspension of the funds and would not update the market until the end of the year. Capita also warned that CFM was still under pressure from increasing regulatory obligations and IT costs.

BOVIS HOMES ADDS TO RECOVERY

Bovis Homes reported on Wednesday an 83 percent hike in price reservations in the year to November 13. Total sales at the housebuilder increased to 2,178 homes, from 2,023 homes in 2008. The group echoed comments made by rivals Persimmon and Barratt Developments, both of which spoke of improved conditions in the housing sector earlier in the week. It said: "The mortgage market still remains difficult to access for first time buyers and other buyers requiring higher loan-to-value multiples." Bovis said it expects current market trends to persist into 2011.

LAND SECURITIES HERALDS END OF PROPERTY SLUMP

The real estate and investment trust Land Securities signalled the end of the property slump by reporting that adjusted net asset value had fallen by 4.7 percent during the first six months of the year to 565 pence, a better performance than the market had expected. Land's chief executive Francis Salway was upbeat on the housing markets prospects, saying: "Right now there are more buyers than sellers in the property market, and irrespective of any clever analysis, that will lead to strengthening prices."

The Guardian

US AND ITALIAN FIRMS JOIN CADBURY FEEDING FRENZY

Both Ferrero and Hershey have declared interest in some form of deal with Cadbury to prevent it being taken over by Kraft. Formal statements released by the two companies did not acknowledge they were working together, but sources have said that they are considering combining their finances to make an offer for the British confectioner. Cadbury has already dismissed an offer from Kraft and would prefer to remain independent, which union bosses have said would be the best outcome for Cadbury's 46,000 workers.

HIGH-FLYING DUTCHMAN NOT JUST ANY RETAIL BOSS - HE'S THE M&S

BOSS

Marks and Spencer has announced the appointment of its new chief executive, Dutchman Marc Bolland. He joins M&S from Morrisons, where he enjoyed great success by increasing gains in the supermarket's middle class market share. M&S shares climbed to a 17-month high after the announcement. Sir Stuart Rose earned the ire of the company's investors when he assumed the dual role of executive chairman and will be scaling back his commitment to the company once Bolland is in place.

THE BLUE FACTOR: ASDA SAVIOUR AND FORMER TORY MP GETS THE.

Former Conservative MP Archie Norman has been made chairman of ITV, a move that will aid the broadcaster under a future Conservative government. Norman has a reputation for turning around failing businesses, which he did to great effect with Asda in the 1990s. Norman is to take up the role in January and will be searching for a new chief executive in the coming month. ITV has publicly endured difficulty in hunting for a new chairman, having failed to sign two earlier candidates. ITV's share price rose by 3.5 percent on the day Norman's appointment was announced.

Prepared for Reuters by Durrants
Keywords: PRESS DIGEST British business Nov 19

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By Kevin Drawbaugh

WASHINGTON, Nov 18 (Reuters) - The U.S. Congress edged closer on Wednesday to creating new government powers to break up giant financial firms, which Europe is already doing, while a U.S. derivatives market crackdown got more complicated.
More than a year since the collapse of Lehman Brothers and massive government bailouts of firms such as American International Group, the Congress is slowly working its way through more than a dozen financial regulation reform proposals from the Obama administration.
The House of Representatives has been up to its ears in debate and amendments for weeks, while the Senate only recently has begun to gear up for tackling the reform agenda.
A House committee voted on Wednesday to approve a measure that would empower a new council of government regulators to force divestitures by firms considered "too big to fail" whose collapse could threaten the stability of the economy.
With the goal of cutting such troubled giants down to size before they slide into crisis, the House Financial Services Committee voted 38-29 for the breakup power proposal.
The European Commission has already approved restructuring plans for a handful of EU financial giants, including Britain's Lloyds Banking and Dutch group ING. As many as 28 more EU firms are being eyed for possible divestitures.
The U.S. Federal Deposit Insurance Corp already has power to take over and close insolvent banks.

But the proposed authority would be more preemptive and cover "insurance companies, banks, hedge funds, whoever may be in an exposed area of causing systemic risk," said its author, Democratic Representative Paul Kanjorski, head of the House capital markets subcommittee, at a committee working session.
The Kanjorski measure was approved as an amendment to a broader bill expected to come up for a full committee vote later, possibly on Friday. A final House vote on financial regulation reform was not expected until mid-December.
The Senate Banking Committee is scheduled to meet on Thursday to begin work on a 1,136-page reform bill introduced last week by committee Chairman Christopher Dodd, a Democrat.
The measure is likely to undergo weeks of debate as it has little support among Republicans.
"We have a lot of reservations on the Republican side," said Senator Judd Gregg in a Reuters Television interview on Wednesday.

One key point of disagreement is the administration's proposal, backed by Dodd, to form a Consumer Financial Protection Agency to regulate mortgages and credit cards.
"I think all Republicans have taken the position that the independent consumer protection agency is a huge mistake," said Gregg, a Republican banking committee member from New Hampshire, who added that Republicans will offer an alternative to Dodd's bill.

Another issue riven with disagreement is regulation of the over-the-counter derivatives market, including credit default swaps, widely blamed for amplifying last year's crisis.
Democratic Senator Blanche Lincoln, chairman of the Senate Agriculture Committee said on Wednesday she plans to offer her own OTC derivatives bill, which would be the sixth major piece of legislation in this area introduced into this Congress.
On another issue, Senate Republicans blocked an attempt by Dodd on Wednesday to call a Senate vote on a bill to force credit card companies to freeze interest rates and fees on existing balances until new industry rules take effect.
The setback reflected deep divisions over financial issues within the Senate, where Democrats lack the clear majority that they enjoy in the House.

Wall Street and banking lobbyists, who are fighting regulatory changes that threaten profit margins, swarmed the halls outside the House Financial Services Committee's meeting on Wednesday, buttonholing lawmakers to try to influence their views.
But most of the lobbyists are betting that the Senate is where the reform agenda will falter and get watered down.
Utah Republican Senator Bob Bennett on Wednesday told Reuters Television in an interview: "We obviously hope we can get a bipartisan bill. I don't think we're there yet."
"If we're going to get a bipartisan bill, the timetable is going to have to stretch out. We can't do it in the very short timeframe that some people are demanding," he said. "We just don't have enough areas of agreement to do it that fast."
Treasury Secretary Timothy Geithner, who has served as President Barack Obama's point man on reforms, is slated to testify on Thursday before Congress' Joint Economic Committee.

* U.S. Congress panel backs big bank break-up power, please double-click on
* Britain's financial reform faces carve-up threat, please double-click on
* US big banks need to shrink-FBR's Miller, please double-click on
* New EU finance watchdogs seen muzzled on companies, please double-click on

((Reporting by Kevin Drawbaugh, Editing by Gary Crosse)) Keywords: FINANCIAL REGULATION/ (kevin.drawbaugh@thomsonreuters.com; +1-202-898-8390, +1-202-488-3459 fax)

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By Kevin Drawbaugh

WASHINGTON, Nov 18 (Reuters) - The U.S. House Financial Services Committee voted on Wednesday to approve a proposal that would empower government regulators to break up large financial firms that threaten economic stability.
The measure, offered by Democratic Representative Paul Kanjorski, was added as an amendment to a broader bill that was expected to face a committee vote later, possibly on Friday. Full House action was unlikely until next month.
The government last year stepped in with massive bail outs of firms such as American International Group Inc and Citigroup Inc, fearful the collapse of a large firm could bring down the entire financial system.
Kanjorski, the chairman of the House capital markets subcommittee, proposed assigning the power to preemptively break up financial firms to a Financial Services Oversight Council, subject to review in some cases.
With a focus on the 50 largest U.S. financial firms, Kanjorski's amendment would require the council to evaluate several factors in determining whether to take action against a firm, including size, exposure, leverage and relationships.
The council could order firms to be put under tougher oversight, to halt or change their activities, to limit mergers and acquisitions, and in extreme cases, to break up.
Mandated divestitures of more than $10 billion would require the Treasury secretary's approval, while those above $100 billion would require the approval of the president.
The amendment would cover "insurance companies, banks, hedge funds, whoever may be in an exposed area of causing systemic risk," Kanjorski said at a committee working session.
Firms could appeal council actions under the amendment, which the committee passed with 38-29 vote, largely on party lines.
The committee's broader bill had already proposed new powers for regulators to police, take over, restructure and shut down firms that pose a "systemic risk."
The bill, as amended, comes amid a broad push by the Obama administration and Democrats to tighten bank and capital market rules in response to last year's financial crisis.
A bill introduced last week by banking committee Chairman Christopher Dodd, a Democrat, also called for establishing a council of financial regulators that could require companies that threaten the economy to divest holdings.

In both the House and the Senate, "financial lobbyists will continue to try to water down this new and intrusive federal regulatory power," said Joseph Engelhard, policy analyst at investment firm Capital Alpha Partners.
If a new break-up power does survive the legislative process, Engelhard said, it is unlikely a "council of numerous financial regulators would be able to agree on such a radical step as breaking up a large bank, except in the most unusual circumstances, and that the Treasury Secretary ... would have the ability to veto any imprudent use of such power."
Kanjorski added he will coordinate with European Union officials on the issue because they share similar concerns.
EU regulators are set to turn the spotlight on 28 European banks bailed out by governments for possible mandated divestitures, officials said on Wednesday.
The EU executive has already approved restructuring plans for British lender Lloyds Banking, Dutch financial group ING Groep NV and Belgian group KBC.
Giving break-up power to regulators would be "a good thing," said Paul Miller, a policy analyst at investment firm FBR Capital Markets, on Wednesday.
Big banks in general are bad for the economy because they do not allocate credit well, especially to small businesses, he said. "Eventually the big banks get broken up in one way or another," Miller said at the Reuters Global Finance Summit.
"It's still an extreme position, but it's building consensus probably faster than most people think."

(For text of the Kanjorski amendment, double-click on http://kanjorski.house.gov/images/stories/09_11_18%20tbtf%20amendment%20text.pdf)

* US big banks need to shrink-FBR's Miller, please double-click on
* Britain's financial reform faces carve-up threat, please double-click on
* New EU finance watchdogs seen muzzled on companies, please double-click on

(Additional reporting by Karey Wutkowski in New York; Editing by Chizu Nomiyama) Keywords: FINANCIAL REGULATION/KANJORSKI (kevin.drawbaugh@thomsonreuters.com; Tel: +1 202 898 8390)

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By Huw Jones

LONDON, Nov 18 (Reuters) - Britain's opposition Conservative Party said it would ditch the core of a financial sector reform bill if it wins power next year, but lawyers expect other parts such as curbs on bankers' pay would be introduced.
The government unveiled plans on Wednesday for a financial services bill in a speech delivered by Queen Elizabeth to open the last parliamentary session before an election to be held by June.
It seeks to improve how risk in the financial system is monitored, beef up enforcement powers at the Financial Services Authority, crackdown on excessive bonuses, and require banks to write "living wills" for use in case they fail.
The bill draws on lessons from the credit crunch to protect investors better and reduce the need for taxpayer bailouts.
At its core is a Council for Financial Stability that formalises and strengthens the existing "tripartite" committee of Treasury, Bank of England and FSA officials.
It was criticised for failing to spot risks that forced Britain to nationalise or take major stakes in Northern Rock, Lloyds and RBS banks.
"The Financial Services Bill in the Queen's speech today will not help as it keeps the failed tripartite system in place," said David Cameron, leader of the Conservative Party which is tipped by the polls to win the next election.
"That system needs to go and with a Conservative government it will," Cameron told parliament.
The Conservatives had already said they want to scrap the FSA and put the Bank of England in charge of bank supervision.
"If the Conservatives are elected and want to go ahead with their plan to restructure the regulator, they will need to introduce a bill fairly soon in any event," said Simon Gleeson of Clifford Chance law firm.
"Thus the new government will have a financial services bill in its first session come what may," Gleeson said.
The bill also incorporates rules agreed by the G20 group of top countries in September to curb but not cap bonuses.
"The banks and financial institutions must understand that a return to their old ways is impossible," British Prime Minister Gordon Brown told parliament.
"Our bill will automatically make any remuneration contract which contravene the rules void and nullified," Brown said.
UK Financial Services Minister Paul Myners said the bill will not change existing pay contracts or give the FSA direct powers over existing contracts.
"The bill represents no threat to the major banks and investment banks that have confirmed their support for G20 principles. The UK will continue to be a good place in which to conduct financial transactions," Myners told an awards event.
Financial lawyers expect the bill's provisions on tougher enforcement and bonus curbs to become law whoever wins the next election.
"At least some of it looks as though it might be sensible, the enforcement powers reforms for example, and it is unlikely that any incoming government would simply rip it up," Gleeson said.
Michael McKee, a partner at DLA Piper law firm, said the Labour government will focus hard on trying to get the bonus related law through as soon as possible.
"If they managed to do that I don't think that the Conservatives would necessarily change the law because it would be unpopular to go easy on bankers," McKee said.
There was little new on remuneration which stops short of capping payouts and comes too late to influence the 2009 bonus round that is settled by early 2010, lawyers said.
"We should be wary of the principle that the state should set an individual's pay package, not the market," said Maggie Craig, acting Director General of the Association of British Insurers.
Jacqui Hatfield of Reed Smith, said it would be too costly for the government to try an tear up existing pay agreements.
The British Bankers' Association said banks were fully aware that pay should reward long term success and not encourage undue risk taking.
"We have already signed up to remuneration rules with the Financial Services Authority and support moves by the G20 to co-ordinate international agreements, necessary to keep talent in the UK," the BBA said in a statement.
The FSA is expected to get new powers that will make it easier to pursue individuals and suspend future business activities as punishment for past breaches, a new departure.
"The financial services bill is a little bit oversold but enforcement is clearly going to be much tougher whoever wins the next election," said Maxine Cupitt of CMS Cameron McKenna.
There were also some concerns over a provision to allow groups of consumers to be represented in a court.
"Pushing the UK toward a US litigation culture would create costs for consumers and businesses that far outweigh the benefits," ABI's Craig said.
(Additional reporting by Kirstin Ridley; Editing by Victoria Main and Toby Chopra) Keywords: BRITAIN FINANCIAL/REGULATION

(Reuters messaging: huw.jones.reuters.com@reuters.net; + 44 207 32 2 287 6817; huw.jones@thomsonreuters.com)

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By Kevin Drawbaugh

WASHINGTON, Nov 18 (Reuters) - A senior U.S. lawmaker unveiled a much-anticipated proposal on Wednesday that would empower government regulators to break up financial firms that pose a risk to economic stability.
Democratic Representative Paul Kanjorski, chairman of the House capital markets subcommittee, said he wants to assign that preemptive power to a Financial Services Oversight Council, subject to review in some cases.
He offered his plan as an amendment to a bill in the House Financial Services Committee that already had proposed new powers for regulators to police, take over, restructure and shut down firms that pose a "systemic risk."
With a focus on the 50 largest U.S. financial firms, Kanjorski's amendment would require the council to evaluate several factors in determining whether to take action against a firm, including size, exposure, leverage and relationships.
The council could order firms to be put under tougher oversight, to halt or change their activities, to limit mergers and acquisitions, and in extreme cases, to break up.
Mandated divestitures of more than $10 billion would require the Treasury secretary's approval, while those above $100 billion would require the approval of the president.
The amendment would cover "insurance companies, banks, hedge funds, whoever may be in an exposed area of causing systemic risk," Kanjorski said at a committee working session.
Firms could appeal council actions, under the amendment.
The proposal comes amid a broad push by the Obama administration and Democrats to tighten bank and capital market rules in response to last year's financial crisis and massive bailouts of firms such as American International Group Inc and Citigroup Inc.
The Financial Services Committee was expected to complete action on its bill on Friday. A final House floor vote on financial reforms will likely wait until December.
The Senate Banking Committee has tentatively scheduled a working session for Thursday on reform legislation.

A bill introduced last week by banking committee Chairman Christopher Dodd, a Democrat, also called for establishing a council of financial regulators that could require companies that threaten the economy to divest holdings.
In both the House and the Senate, "financial lobbyists will continue to try to water down this new and intrusive federal regulatory power," said Joseph Engelhard, policy analyst at investment firm Capital Alpha Partners.
If a new break-up power does survive the legislative process, Engelhard said, it is unlikely a "council of numerous financial regulators would be able to agree on such a radical step as breaking up a large bank, except in the most unusual circumstances, and that the Treasury Secretary ... would have the ability to veto any imprudent use of such power."
Kanjorski added he will coordinate with European Union officials on the issue because they share similar concerns.
EU regulators are set to turn the spotlight on 28 European banks bailed out by governments for possible mandated divestitures, officials said on Wednesday.
The European Commission is reviewing bailouts to ensure lenders do not get an unfair advantage, in many cases forcing asset sales, reduced market share and a halt to dividends.
The EU executive has already approved restructuring plans for British lender Lloyds Banking, Dutch financial group ING Groep NV and Belgian group KBC.
Giving break-up power to regulators would be "a good thing," said Paul Miller, a policy analyst at investment firm FBR Capital Markets, on Wednesday.
Big banks in general are bad for the economy because they do not allocate credit well, especially to small businesses, he said. "Eventually the big banks get broken up in one way or another," Miller said at the Reuters Global Finance Summit.
"It's still an extreme position, but it's building consensus probably faster than most people think."

(For text of the Kanjorski amendment, double-click on http://kanjorski.house.gov/images/stories/09_11_18%20tbtf%20amendment%20text.pdf)

* US big banks need to shrink-FBR's Miller, please double-click on
* Britain's financial reform faces carve-up threat, please double-click on
* New EU finance watchdogs seen muzzled on companies, please double-click on

(Additional reporting by Karey Wutkowski in New York; Editing by Kenneth Barry) Keywords: FINANCIAL REGULATION/KANJORSKI (kevin.drawbaugh@thomsonreuters.com; Tel: +1 202 898 8390)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

By Huw Jones

LONDON, Nov 18 (Reuters) - Britain's opposition Conservative Party said it would ditch the core of a financial sector reform if it wins power next year, but lawyers expect other parts such as curbs on bank pay would be introduced.
The government unveiled plans on Wednesday for a financial services bill in a speech delivered by Queen Elizabeth to open the last parliamentary session before an election to be held by June.
It seeks to improve how risk in the financial system is monitored, beef up enforcement powers at the Financial Services Authority, crackdown on excessive bonuses, and require banks to write "living wills" for use in case they fail.
The bill draws on lessons from the credit crunch to protect investors better and reduce the need for taxpayer bailouts.
At its core is a Council for Financial Stability that formalises and strengthens the existing "tripartite" committee of Treasury, Bank of England and FSA officials.
It was criticised for failing to spot risks that forced Britain to nationalise or take major stakes in Nationwide, Lloyds and RBS banks.
"The Financial Services Bill in the Queen's speech today will not help as it keeps the failed tripartite system in place," said David Cameron, leader of the Conservative Party which is tipped by the polls to win the next election.
"That system needs to go and with a Conservative government it will," Cameron told parliament.
The Conservatives had already said they want to scrap the FSA and put the Bank of England in charge of bank supervision.
"If the Conservatives are elected and want to go ahead with their plan to restructure the regulator, they will need to introduce a bill fairly soon in any event," said Simon Gleeson of Clifford Chance law firm.
"Thus the new government will have a financial services bill in its first session come what may," Gleeson said.
The bill also incorporates rules agreed by the G20 group of top countries in September to curb but not cap bonuses.
"The banks and financial institutions must understand that a return to their old ways is impossible," British Prime Minister Gordon Brown told parliament.
"Our bill will automatically make any remuneration contract which contravene the rules void and nullified," Brown said.
Financial lawyers expect the bill's provisions on tougher enforcement and bonus curbs to become law whoever wins the next election.
"At least some of it looks as though it might be sensible, the enforcement powers reforms for example, and it is unlikely that any incoming government would simply rip it up," Gleeson said.
Michael McKee, a partner at DLA Piper law firm, said the Labour government will focus hard on trying to get the bonus related law through as soon as possible.
"If they managed to do that I don't think that the Conservatives would necessarily change the law because it would be unpopular to go easy on bankers," McKee said.
There was little new on remuneration which stops short of capping payouts and comes too late to influence the 2009 bonus round that is settled by early 2010, lawyers said.
"We should be wary of the principle that the state should set an individual's pay package, not the market," said Maggie Craig, acting Director General of the Association of British Insurers.
Jacqui Hatfield of Reed Smith, said it would be too costly for the government to try an tear up existing pay agreements.
The British Bankers' Association said banks were fully aware that pay should reward long term success and not encourage undue risk taking.
"We have already signed up to remuneration rules with the Financial Services Authority and support moves by the G20 to co-ordinate international agreements, necessary to keep talent in the UK," the BBA said in a statement.
The FSA is expected to get new powers that will make it easier to pursue individuals and suspend future business activities as punishment for past breaches, a new departure.
"The financial services bill is a little bit oversold but enforcement is clearly going to be much tougher whoever wins the next election," said Maxine Cupitt of CMS Cameron McKenna.
There were also some concerns over a provision to allow groups of consumers to be represented in a court.
"Pushing the UK toward a US litigation culture would create costs for consumers and businesses that far outweigh the benefits," ABI's Craig said.
(Additional reporting by Kirstin Ridley; Editing by Victoria Main) Keywords: BRITAIN FINANCIAL/REGULATION

(Reuters messaging: huw.jones.reuters.com@reuters.net; + 44 207 32 2 287 6817; huw.jones@thomsonreuters.com)

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LONDON, Nov 18 (Reuters) - Lloyds Banking Group on Wednesday published a preliminary price of 89.7246 pence that would be used in a conversion to equity of new hybrid bonds the UK bank plans to issue via an exchange offer to investors.
The new bonds -- enhanced capital notes -- are designed to convert to equity if the bank's core Tier 1 capital ratio falls to less than 5 percent.
Financial regulators have said these contingent convertible bonds or "CoCos" could help provide a capital cushion if banks run into difficulties.
The conversions price was calculated based on an average of the daily per share volume-weighted average price of Lloyds' ordinary shares for five trading days from Nov. 11 to Nov. 17, Lloyds said in a statement.
"Seeing as there has generally been a rally in stock in the last week, locking the conversion price so high is far from ideal," credit analysts at Royal Bank of Scotland said in a note to investors.
Lloyds is widely expected to get strong take-up of its proposed 9 billion pound ($15.14 billion) bond exchange offer, the results of which are due to be published on Monday.
The bank is raising cash to free itself from a government insurance scheme for bad loans.
The conversion price for the CoCos will be adjusted next week to take into account the impact of a rights issue planned by Lloyds. The bank will publish a final conversion price on Nov. 27.
The pricing of Lloyds' proposed 13.5 billion pound rights issue is due on Nov. 24.

($1=.5946 Pound)

(Editing by Jon Loades-Carter) Keywords: LLOYDS EXCHANGE Keywords: LLOYDS EXCHANGE

(jane.merriman@thomsonreuters.com; +44 207 542 3121; Reuters Messaging:jane.merriman.reuters.com@reuters.net)

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