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Message: <blockquote data-quote="HH" data-source="post: 24608" data-attributes="member: 1642">UK Government’s New Immigration PolicyBy [USER=3115]@Ayah[/USER] (Ayah Reza)The StoryLast week, a move towards a points based immigration system was announced by the UK government. The government seeks to attract English speaking skilled workers who hold job offers, in addition to either earning  more than £25,600 or holding a PhD relevant to the job. The salary threshold can also be circumvented if the job is in a designated “shortage occupation”, such as engineers and paramedics.A cap on the number of visas that can be handed out to skilled workers who fit the criteria has been removed. The aim is to fill the shortage of skilled workers such as physics and Mandarin secondary school teachers. While such opportunities are created, the changes to the UK immigration rules present a new set of challenges.Impact on Businesses and Law FirmsUndoubtedly, law firms with strong employment practices will find themselves engaged by clients who seek to obtain visas to work in the UK. However,  they are unlikely to see many clients from those seeking to be employed in the sectors most affected by the immigration policy. Namely sectors such as hospitality, social care and agriculture.The biggest hurdle faced by these sectors is the imposed salary required of holding a job offer with an annual salary of more than £25,600. ABTA, a UK travel trade association, released a report detailing the impact the rules will have on the tourism sector. The report calls for points system to take into account foreign language skills.Despite ABTA highlighting the changes risk “undermining the business model of many UK companies”, the government has already made it clear that the immigration system overhaul is not intended to mean business as usual. The sectors struggling to recruit staff on low salaries will be forced to radically alter the way they operate.JPMorgan in talks to enter the UK’s consumer banking sectorBy [USER=1642]@HH[/USER] (Heerim Hwang)The storyIt has been reported that JPMorgan Chase & Co are currently in talks with UK regulators to break into the UK’s consumer banking sector later this year with a digital bank and a range of savings and loan products. Impact on businesses and law firmsTaking note of the departure of two German digital banks (N26 GmbH, Fidor Bank) from the UK’s banking market, it is fair to say that the US bank’s latest venture enters a difficult marketplace. However, JPMorgan’s entrance into the market may benefit London as many banks (such as N26) have sought to relocate elsewhere following Brexit. JPMorgan will compete against digital banks such as Monzo, Starling, and, most notably, Goldman Sachs’ online-only bank called Marcus. JPMorgan previously launched its own digital bank, “Finn”, in 2018, however, it was shut down soon after due to a lack of customers. This pales in comparison to Marcus which gained 250,000 British customers in its first year and currently holds more than £13 billion in UK deposits. Goldman’s successfully achieved this by attracting customers with high-interest rates for savings accounts which allowed the bank to then lower its group funding costs. Even with JPMorgan’s appointment of a former head of supervision at the Financial Conduct Authority to head its new venture, the bank will need careful legal advice to comply with the FCA’s regulations, the UK’s complicated banking laws, GDPR, and preventative measures for cyber-security risks.Morgan Stanley agrees to buy ETradeBy [USER=4295]@Jiraiya[/USER] (Brian Chiu)The StoryMorgan Stanley agrees to acquire ETrade, an online brokerage in the US, as the bank set its goal to become “an industry leader in wealth management across all channels”. Why is a prestigious investment bank moving out of its playfield and paying $13 bn in shares for an online brokerage firm?Impact on businesses and law firmsInvestment banking is no longer as profitable. Research results showed that the revenues at 12 of the world’s largest investment banks fell to the lowest point since 2008. Banks are seeking to diversify their businesses before the next recession hits. This trend can be confirmed by its rival Goldman Sachs which has recently partnered with Apple and Amazon on its foray to offer consumer banking service. Morgan Stanley, on the other hand, decided to go for wealth management, which is essentially investing wealthy individuals’ money on their behalf.There are three benefits for Morgan Stanley to go with this acquisition apart from the obvious reason that wealth management’s income streams are steadier. It will have access to a less-rich yet younger clientele: ETrade’s 5.2m customers with $360 bn assets, compared to its current 3m clients with$2.7trn assets. With technology lowering the cost of financial services, the bank is now able to serve a larger pool of customers that was deemed unprofitable in the past. Secondly, this signifies a long-term strategic shift to investors as its wealth management business will account for 57% of its profits. Thirdly and most importantly, ETrade has gathered more than $50 bn in consumer deposits which could be used as a source of cheaper funding, once acquired, by Morgan Stanely to lend to its wealthy clients for further profit-making. With all the appeals, this deal’s fate falls on the US regulators as this is the largest acquisition attempted by a “systemically important” US bank since the 2008 crisis. Due to its systemic importance, the US Federal Reserve and the Office of the Comptroller of the Currency will closely scrutinise the deal. M&A lawyers would play a key role in persuading regulators that the acquisition will not breach the relevant competition laws.</blockquote>

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