The Risk Management Association's Committee on Securities Lending has filed a 40-page response to the Financial Stability Board's recent whitepaper on shadow banking, focusing on its recommendations regarding securities lending and repo.  The January 14, 2013 comment letter represents the views of the RMA and major participants in the agency securities lending markets like BNY Mellon, BlackRock, Citigroup, Northern Trust, State Street, and others. Though applauding the FSB's thorough and thoughtful analysis of the topic, the RMA's comment letter reminds the FSB that securities lending is already a highly regulated industry in the U.S. and Europe, and urges coordination with existing and developing reform efforts.  

High frequency trading is once again in the sights of Congress.  The use of sophisticated computer algorithms to trade securities on a rapid basis at speeds far beyond the capabilities of human beings garnered much attention in the wake of the 2010 Flash Crash, as well as the more recent BATS IPO and Knight Capital fiascos.  But, with a new Congress in session, legislators have indicated that they will be taking a fresh look at curbing, or even prohibiting, high frequency trading.  Though there is much disagreement about to what extent high frequency trading exacerbates market volatility, the signals coming from two House committees suggest that legislation or regulation of the activity is on its way.

On December 19, 2012, the European Commission adopted technical standards on the European Markets Infrastructure Regulation (EMIR) as well as a Delegated Regulation supplementing the Directive on Alternative Investment Fund Managers (AIFMD) (called "Level 2 measures").  These two measures have been under formulation and consideration since 2010, and the technical standards adopted on December 19 meet important preconditions to implementing EMIR and AIFMD throughout all EU member countries.