Monday, November 6, 2023

Predictive AI in Securities Finance: Step One

How to Develop an Efficient, Legally-defensible Machine Learning Infrastructure

Author: Ed Blount

On April 2nd, 2026, an effusion of data from a daily trove of U.S. regulatory filings will create resources to drive many new use cases for artificial intelligence in capital markets. A clear opportunity exists in securities finance, where practitioners have repeatedly stated that major IT investments will be needed to comply with the many new regulatory mandates. “Black box” AI platforms may seem a ready solution but can also create nightmares for client reviews and lawsuits.

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Wednesday, October 25, 2023

New Money Fund Reforms: Safer and More Resilient Cash Collateral Pools?

More liquidity, transparency, and safety for institutional investors?

Author: David Schwartz J.D. CPA

The Securities and Exchange Commission (SEC) recently adopted final rules on money market (2a-7) fund reforms. These reforms are designed to make money market funds more resilient and liquid, potentially making them safer and more attractive vehicles for mutual funds to use as collateral pools for their securities lending programs.

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Friday, October 13, 2023

SEC Adopts Long Awaited Securities Lending Disclosure Rule

Persuasive Public Comment Helps Mold the Final Rule

Author: David Schwartz J.D. CPA

The Securities and Exchange Commission (SEC) has adopted a new rule, rule 10c-1, to increase transparency in the securities lending market. The rule requires certain persons to report information about securities loans to a registered national securities association (RNSA). The RNSA will then make certain information publicly available. Published in December of 2021, the proposal received considerable public comment, requiring the Commission to extend the initial 30-day comment period twice, once due to a technical problem receiving comments, and then again to consider whether there would be any effects of proposed Rule 13f–2 that the Commission should consider in connection with proposed Rule 10c–1. Throughout the final release, the Commission notes where persuasive public comment informed the ultimate text of the rule.

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Tuesday, September 26, 2023

Archegos Litigation Heats Up

Rogue Trader's Collapse Still Ripples Through the Financial Industry

Author: David Schwartz J.D. CPA

Archegos Capital Management, a family office run by Bill Hwang, collapsed in March 2021, leaving its counterparties with over $10 billion in losses. The SEC, CFTC, and DOJ have all filed charges against Archegos and its executives, alleging that they engaged in market manipulation and fraud. The litigation is still ongoing, but the case has already significantly affected the financial industry.

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Monday, July 31, 2023

Modernizing Beneficial Ownership Reporting

The Industry Waits for Final Action from the SEC

Author: David Schwartz J.D. CPA

In early 2022, the Securities and Exchange Commission (SEC) proposed several significant changes to Regulations 13D and 13G, which require certain persons to disclose their beneficial ownership of equity securities. These changes seek to improve the transparency and timeliness of beneficial ownership reporting and to make it easier for investors to access and understand this information. The Commission has not yet finalized the proposal, but the SEC's stated date for final action, April 2023, has passed, and the industry is watching the SEC's agenda closely, with final action overdue. 

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Number of views (964)