Given some of the recent actions by the SEC, it’s reasonable to ask if the regulator may be enforcing a kind of “broken windows policing” effort. When put into practice, the broken windows theory as applied to non-Wall Street crime by police officers involves acting upon “small crimes such as vandalism, public drinking, and toll-jumping,”… Read More >>
New Collateral Management, Margining Rules to Sting as Regulation Takes Hold
Securities firms are going to feel over the coming months multiple stings of regulation via Dodd-Frank, the EU’s European Market Infrastructure Regulation (EMIR) legislation and Basel III that will cause collateral management and margining requirements and calls to skyrocket. So says industry veteran Ted Leveroni, chief commercial officer for DTCC-Euroclear GlobalCollateral Ltd., a joint venture… Read More >>
U.S. Regulators Crack Down on Reporting Failures with Stiff Penalties
The CFTC and SEC are continuing their crackdown on firms large and small that fail to sufficiently file regulatory reports that have accurate and usable data that can be applied to monitoring and analyzing securities transactions as evidenced by recent actions against Deutsche Bank and Credit Suisse Securities. The CFTC has ordered Deutsche Bank to… Read More >>
Is ‘Too Big to Fail’ Too Big to Fix?
(Editor’s note: This is the second part of a two-part series on the problem of financial services firms that are “Too Big to Fail” and therefore must be propped up during an economic crisis at taxpayers’ expense. This problem became acute during the Great Recession and many had hoped reform legislation such as the Dodd-Frank… Read More >>
Should Glass-Steagall Be Revived to Stop ‘Too Big to Fail?’
(Editor’s note: This is the first part of a two-part series on whether in the wake of the repeal of the Glass–Steagall Act of 1932 there are financial institutions that have become “too big to fail” because they have essentially bet too much of the firm’s money on highly risky capital markets. The recent turmoil… Read More >>
Capital Adequacy Rules to Jolt the Markets
The new capital requirements recently finalized by the Federal Reserve could force big banks to withdraw from non-core businesses and impact liquidity, trends that could have unpredictable knock-on effects for buy-side firms and operations teams, industry analysts say. The Fed released its revised capital rules on July 20, under which big banks are required to… Read More >>
CFTC Hits Morgan Stanley with $300K Penalty for Swaps Reg Violation
Morgan Stanley & Co., a registered futures commission merchant and swap dealer, will have to pay a $300,000 civil monetary penalty for failing to hold sufficient U.S. dollars in segregated accounts as regulators appear to be paying closer attention to firms missing or neglecting regulatory reporting and related requirements. The CFTC cited Morgan Stanley for… Read More >>
The First Conviction in the LIBOR Scandal
The situation sounds almost like a bad, high-concept synopsis for a Hollywood movie — maybe “Rain Man” meets “Wall Street” — but the reality is far less glamorous. In the U.K., Tom Hayes, described by the Serious Fraud Office (SFO) as “the first individual to be charged and stand trial” in an ongoing criminal investigation… Read More >>
DTCC Takes Aim at the Roadblocks to Data Transparency
Increasing the transparency of the global financial system was one of the major goals of the G20 framework that followed the Great Recession and led to major financial services reform legislation like the U.S’s Dodd-Frank Wall Street and Reform Act. Even though there are many bright spots in this area — some industry observers see… Read More >>
Massad Reinforces CFTC’s Push for Margining Uncleared Swaps
Five years after the onset of the Dodd-Frank Act (DFA), CFTC Chairman Timothy G. Massad outlined last week the regulator’s next phase in the DFA rule-making process, which will include margin collection for uncleared swaps, stress tests for clearinghouses, a new definition of a swaps dealer, SEF trading improvements, and cross-border harmony for swaps data… Read More >>
