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May 05, 2023

The week in investor relations: De Santis signs anti-ESG measures into law, US nears agreement to limit Chinese investments and SEC gets US court order over Coinbase complaint 

Our pick of the IR stories from around the web you might have missed this week

– Florida governor Ron DeSantis signed into law a bill barring state officials from investing public money to promote ESG goals and prohibiting ESG bond sales, Reuters (paywall) reported. The bill is one of the furthest-reaching efforts yet by US Republicans against sustainable investing efforts and a clear political message from DeSantis, a likely presidential candidate. Republicans, including some from energy-producing states, say many executives and investors have lost their focus on returns as they take growing account of issues like climate change and workforce diversity.

– According to Politico, Biden administration officials appeared to be nearing agreement on a key effort to curtail Beijing’s technological and military rise. Unprecedented rules limiting US investments in China are expected later this month and the administration has begun briefing industry groups like the Chamber of Commerce on the broad outlines of the executive order, which is expected to require companies to notify the government of new investments in Chinese tech firms and prohibit some deals in critical sectors like microchips. The developments come at a particularly delicate moment for the administration, which has been trying to smooth tensions and maintain trade ties with Beijing as both economies teeter on the brink of recession.

– In crypto news, Coindesk reported that the SEC was ordered by a US court to respond to cryptocurrency exchange Coinbase’s complaint over how it applies securities laws to digital assets. The Third Circuit Court of Appeals said in a filing that the SEC must file its response within 10 days; Coinbase may then file a response seven days later. Coinbase last week argued that the SEC is providing insufficient regulatory guidance for US companies operating in the crypto sector, saying the commission ‘at a minimum must set forth how those inapt and inapposite requirements are to be adapted to digital assets’. 

– Meanwhile, according to CNBC, institutional investors lost interest in crypto after 2022 and, even with this year’s uptrend, their appetite for it hasn’t come back yet, according to Northern Trust’s head of digital assets and financial markets. Justin Chapman told CNBC’s Crypto World at the Digital Assets Week conference in San Francisco that institutions have shifted their focus to cryptocurrencies’ underlying blockchain technology, but that his firm ‘has capabilities’ in place should client interest in crypto assets rebound. ‘Just after March the crypto market went off a cliff… the client interest has definitely gone off the same cliff in terms of institutional interest in cryptocurrencies,’ he said.

–  Investors voiced concerns over an erosion of shareholder rights outlined this week as part of the UK financial regulator’s planned overhaul of British listing rules, the Financial Times (paywall) reported. Several UK fund managers said the proposed shake-up by the Financial Conduct Authority, which would make it easier for companies to list on the London Stock Exchange (LSE), would dilute investors’ voting rights and leave them exposed to riskier stocks. The plans are aimed at boosting the competitiveness of London in a bid to avert an exodus of businesses from the LSE, where the number of listed companies has fallen by 40 percent since 2008. 

– According to Bloomberg (paywall), Alibaba Group’s international online shopping unit is exploring a US IPO as it weighs options to spur growth for the business that includes major e-commerce brands Lazada and AliExpress. The firm is in the early stages of consideration and the IPO’s size has yet to be determined, according to people familiar with the matter. The business group is in talks with banks that could potentially help prepare for the IPO next year, said one of the people, who asked not to be named as the matter is private. Alibaba’s US-listed shares rose 1.2 percent in New York trading.

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