Treasury backtracks on ‘non-dom’ tax

‘Citibank seven’ charged in client data hijacking

La Caixa wins Morgan Stanley wealth

Bank Sarasin sets up in Frankfurt…

RBC entering Indian wealth sector…


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Treasury backtracks on ‘non-dom’ tax plans

The Treasury has seemingly watered down its plans to tax wealthy
foreign individuals living in the UK, after warnings the proposals
would lead ‘non-doms’ to flee to other domiciles and thus dent the
economy. The wealth industry remains concerned over the damage the
remaining proposals will do to the UK’s – in particular London’s –
status as a global financial centre.

In its partial U-turn, the Treasury has attempted to address fears
regarding the level of disclosure that ‘non-doms’ would be required
to make under the original proposals. Information on the origin of
income and gains brought from outside the UK will not have to be
disclosed and there will be no retrospective taxation on gains made
via offshore trusts prior to April 2008, the date when the changes
come into force.

But those claiming domicile elsewhere will still have to play
£30,000 a year after seven years of residence in the UK to avoid
declaring overseas income. Fears also remain that American ‘non-
doms’ will not be able to offset the charge against US tax. The
Treasury has said that it is liaising with the US in this regard
and insists that the latest changes amount to a “clarification” of
the original plans.

The Society of Trust and Estate Practitioners said that the
alterations were “half hearted” and would not give advisors scope
to prevent “the flight of individuals and capital which we


‘Citibank seven’ charged in client data hijacking

Seven former Citibank employees in Singapore have been charged with
breaking client confidentiality laws, in a case that reflects the
city-state’s determination to uphold its strict bank secrecy laws.
The seven were accused of taking information on private bank
clients from Citibank before they joined rival UBS in 2006.

They face a total of 1,223 charges under Singapore’s Computer
Misuse Act and secrecy laws for allegedly accessing Citibank’s
computers without authority and taking client information.

The trial follows a year-long investigation by the Singapore
police, which started an inquiry after Citibank filed a lawsuit
against the seven in 2006. While that case was settled out of court
last year with the payment of undisclosed damages, Citibank also
filed a complaint with the police and the Monetary Authority of

In its civil suit, Citibank had alleged that some of the bankers
had taken S$50 million ($35 million) worth of business to UBS by
persuading clients to switch accounts. Only three of the seven
still work at UBS although they have been suspended pending the
outcome of the case. The accused face up to 20 years in jail and
fines of up to S$125,000.


La Caixa wins Morgan Stanley wealth business

Spain’s leading savings bank group, La Caixa, has won Morgan
Stanley’s Spanish private banking operations. The price of the
transaction, covering about €9 billion ($13 billion) of client
assets, is still being finalised but is expected to be around €600

Several Spanish and foreign banks had looked at the Morgan Stanley
business, including France’s BNP Paribas and Spanish lenders Banco
de Sabadell and Caja Madrid, though only La Caixa and BNP submitted
binding bids.

La Caixa said that it would fold most of the purchased assets into
its private banking business while Morgan Stanley’s local asset
manager would be integrated within Invercaixa, the group’s

This is Morgan Stanley’s second wealth divestment in Europe, after
selling UK private client broker Quilter to Citigroup last year.
The US investment bank is discarding lower-margin mass affluent
business in favour of ultra-high net worth clients.

The Spanish deal “is the result of our strategy to focus our
international wealth management effort on the ultra high net worth
market segment,” said James Gorman, co-president of Morgan


Bank Sarasin sets up in Frankfurt

Bank Sarasin is strengthening its market presence in Germany by
opening a new bank in Frankfurt, to be headed by a senior hire from
Credit Suisse.

This expansion underlines the Sarasin Group’s “determination to
continue to expand in Europe’s most important market for private
banking”, with its more than 800,000 potential clients, the Swiss
private bank declared.

In reorganising its German operation, Sarasin joins other Swiss
banks such as Julius Baer in moving into the onshore domestic
wealth market in Germany in order to offset a decline in
traditional offshore business in Europe.

The CEO of the newly licensed Bank Sarasin, Frankfurt – which has
been trading up to now as Sarasin Wertpapierhandelsbank in Munich –
is Frank Niehage, a German who has worked at several private banks.
He joins from Credit Suisse, where most recently he was head of the
western region covering cities such as Stuttgart, Cologne and

Niehage has also worked in Commerzbank private banking and in 2001
he switched to UBS Private Banking Deutscheland as a team head
before moving to Credit Suisse Deutscheland in 2003.

A new team under Niehage will be responsible for implementing Bank
Sarasin’s growth plans in Germany from the new base in Frankfurt.
The former head office in Munich will continue to operate as a


RBC entering Indian wealth sector

Royal Bank of Canada (RBC) has opened a representative office in
Mumbai as part of plans to break into the Indian wealth management
sector. The bank plans to upgrade its presence into a branch within
the next year and will apply for the licence with the Reserve Bank
of India.

RBC is looking at offering capital market products, debt funding
for banks and corporates as well as wealth management.

RBC president and chief executive officer Gordon M Nixon said RBC
plans “to get ourselves well-positioned in the Indian

In wealth management, the bank is looking at tapping individuals
with assets worth a minimum worth of $1 million and prepared to pay
an annual fee of $10,000. At this stage, RBC plans to offer advice
to high net worths through its private banking teams based in
offshore markets and not through the Indian office, reflecting
Indian regulations.


KBC buys French fund manager

The Benelux KBC Group is buying French asset manager Richelieu
Finance, signalling that some fund managers may seek refuge with
strong groups amid the current market turmoil.

Financial details were not disclosed, although KBC is thought to
have paid less than €150 million for Richelieu, equivalent to
almost 4 percent of its managed assets.

Richelieu denied that it had encountered liquidity issues before
agreeing the deal with KBC. At the end of 2007, Richelieu had €4
billion of assets under management, although client withdrawals
have dented that amount heavily in recent weeks.