SEC Filings
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| 10-Q | |||||||||||||||||
| HRG GROUP, INC. filed this Form 10-Q on 08/09/2016 | |||||||||||||||||
| Entire Document | |||||||||||||||||
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terms of trade between the UK and the EU. The effects of Brexit will depend on any agreements the UK makes to retain access to EU markets either during a transitional period or more permanently. Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replace or replicate. Any of these effects of Brexit and others, which cannot anticipate at this time, could adversely affect Spectrum Brands’ business, business opportunities, results of operations, financial condition and cash flows. Risks Related to FGL Risk Relating to Federal Regulation In April 2016, the Department of Labor (“DOL”) released its final “fiduciary” rule which could have a material impact on FGL, its products, distribution, and business model. The final rule treats persons who provide investment advice for a fee or other compensation with respect to assets of an employer plan or individual retirement account (“IRA”) as fiduciaries of that plan or IRA. Significantly, the rule expands the definition of fiduciary to apply to persons, including insurance agents, who advise and sell products to IRA owners. As a practical matter, this means commissioned insurance agents selling FGL’s IRA products must qualify for a prohibited transaction exemption which requires the agent and financial institution to meet various conditions including that an annuity sale be in the “best interest” of the client without regard for the agent’s, financial institution’s or other party’s financial or other interests, and that any compensation paid to the agent and financial institution be reasonable. The final rule is effective June 2016 and generally applicable in April 2017. The rule has generated considerable controversy and is the subject of industry efforts to block implementation both in Congress and through court actions. The success or failure of these efforts cannot be predicted. Assuming the rule is not blocked, the precise impact of the rule on the financial services industry more generally, and the impact on FGL and its business in particular, is difficult to assess because the rule is new and still being studied. While FGL continues to analyze the regulation, FGL believes it could have an adverse effect on sales of annuity products to IRA owners particularly in the independent agent distribution channel. A significant portion of FGL’s annuity sales are to IRAs. Compliance with the prohibited transaction exemptions would likely require additional supervision of agents, cause changes to compensation practices and product offerings, and increase litigation risk, all of which could adversely impact FGL’s business, results of operations and/or financial condition. Risks Related to Compass The sale of Compass is subject to various closing conditions, including regulatory approvals On July 1, 2016, the Company, through HGI Energy, entered into an agreement to sell its equity interests in Compass to a third party (the “Compass Sale”). The closing of the Compass Sale is subject to the satisfaction of customary closing conditions, some of which are outside of our control. We cannot predict with certainty whether all of the required closing conditions will be satisfied or waived or if other uncertainties may arise. The Compass Sale could be prevented or delayed if the closing conditions are not satisfied or waived or if other uncertainties arise.
During the fiscal quarter ended June 30, 2016, HRG did not sell any equity securities that were not registered under the Securities Act of 1933, as amended. On May 29, 2014, the HRG’s board of directors authorized a program to purchase up to $100.0 million of HRG’s shares of common stock. During the fiscal quarter ended June 30, 2016 we did not repurchase any of our common stock. At June 30, 2016, there were $12.3 million of shares that may yet be repurchased under the plans of the program authorized by HRG’s board of directors.
None.
Not applicable.
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