Monday, April 30, 2012

Comparing US and EU Derivatives Regulation Regimes

Author: David Schwartz J.D. CPA

As a result of commitments made at the G20 in 2009, member states across the globe are engaging in a number of regulatory reform initiatives addressing derivatives. Though the G20 members agreed to some basic principles of regulation, and officials say that some level of cooperation and coordination is happening, the proposed regimes are not identical, and each may have extraterritorial effects.  These new sets of rules and regulations emanating from each jurisdiction's initiative may present some difficult compliance issues for end users of derivatives with global trading operations.  Sidley & Austin has put together a report comparing and contrasting some of the provisions and new regulations under the US's Dodd-Frank Act and those under the EU's EMIR and MiFID II.

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Thursday, April 26, 2012

Fed Sets Volcker Rule Phase-In

Author: David Schwartz J.D. CPA
On April 19, the Federal Reserve Board clarified that an entity covered by Volcker Rule will have the full two-year period provided by the statute to conform its activities and investments. The guidance issued by the Fed also assures covered entities and institutions that no activities or investments will be prohibited by the Volcker Rule until the end of the implementation period, currently scheduled to occur on July 21, 2014.
 
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Wednesday, April 25, 2012

Bernanke: Shadow Banking Remains a "Key Vulnerability"

Author: David Schwartz J.D. CPA
In an April 13 address, Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, made clear that he sees the system of shadow banking as a key vulnerability that makes another catastrophic economic crisis nearly inevitable.  In Bernanke's view, the increased importance of the so-called shadow banking system is the primary reason for the severity and pervasiveness of the financial crisis, and the regulatory gaps in which shadow banking activities operate must be addressed by policy makers.
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Monday, April 23, 2012

FSB Takes Aim at Repo Funding

Author: David Schwartz J.D. CPA
As capital requirements and structural reforms of banks and financial institutions fall into place, global financial regulators are renewing their efforts to bring shadow banking and securitized credit extension under some form of regulatory discipline.  Though shadow banking has many facets needing attention, in an April 19 address at Johns Hopkins University, Lord Turner, head of the UK's Financial Services Authority announced that regulation of repo funding mechanisms would be a priority for the Financial Stability Board this year, and in particular the FSB’s Standing Committee on Supervisory and Regulatory cooperation (SRC), of which he is the chair.
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Tuesday, April 10, 2012

Proxy Advisers' Influence on Say-on-Pay: Additional Data and Insights

Author: David Schwartz J.D. CPA
Two new studies examine the influence proxy advisory services like ISS and Glass-Lewis have on the outcomes of proposals made to shareholders in firms' annual proxies, particularly say-on-pay votes, which became mandatory for most public companies in 2011.  Both studies look at the data behind the level of influence ISS and Glass-Lewis have on proxy voting outcomes, but they also look at the extent to which these voting recommendations may affect market reactions and change the way in which executive compensation packages are designed. These reports add valuable data and insights on shareholder voting and the related policy debate.
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