Wednesday, September 30, 2020

Alarm Raised on Stock Loans for "Withholding Tax Schemes”

Findings Point to a New Role for Emerging Fintech

Author: David Schwartz

European commissioners are reviewing a study from their securities and market authority (ESMA) that includes a recommendation for new laws to combat unfair trading practices and an extended remit for National Competent Authorities (NCAs) to conduct snap audits of securities loans and transactors. Loans deemed to be suspicious would prompt an inquiry to determine penalties for unfair strategies and inappropriate beneficiaries. However, useful audit results may be doubtful based on our preliminary review that uncovered shortcomings in the proposed SFTR surveillance datasets, as well as possible flaws in the study’s basic methodology. 

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Friday, July 7, 2017

Deglobalizing or Reglobalizing?

Are Global Banks Pulling Back or Expanding Their Cross-border Connections?

Author: David Schwartz

On June 30, 2017, the Bank For International Settlements (BIS) published the results of a study examining trends in bank deglobalization since the financial crisis. Prompted by data indicating a decline in cross-border activity by banks, the BIS launched a study to determine whether the data support the hypothesis that the largest global banks have truly scaled back their cross-border activity since 2007, or whether it might be an indicator of some other trend.

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Thursday, August 25, 2016

The Long Reach of the SEC

Globalization is Giving the SEC a Cross-border Focus

Author: David Schwartz

n a June 28, 2016 address in London, Andrew J. Donohue, Chief of Staff at the U.S. Securities and Exchange Commission, gave his perspective on the expanding intersection between U.S. securities regulation and the global securities community. The past few decades have seen a significant increase in foreign entities subject to SEC regulations as well as increases in cross-border holdings, resulting in a need for greater cooperation among regulators of different countries. Given the SEC’s greater cooperation and coordination with its foreign counterparts, Mr. Donohue took the opportunity to discuss the the SEC’s global reach within the securities industry, the importance of international cooperation on the major issues facing in today’s markets, as well as providing an overview of the significant work the Commission and its staff have done to address the globalization of the securities markets.

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Tuesday, March 1, 2016

US and EC Agree on a Common Approach to Trans-Atlantic CCPs

Author: David Schwartz

In a joint statement issued on February 10, the European Commission (EC) and the U.S. Commodity Futures Trading Commission (CFTC) announced agreement on a common approach regarding requirements for central clearing counterparties (CCPs).  The agreement is the result of a multi-year analysis of differences between the CFTC and EU regulatory requirements. The accord commits the EC and CFTC to base regulations on international rather than parochial principles, and for both the CFTC and the European Commission Services to work together, along with counterparts across the global regulatory community, to develop further these principles and further harmonize the standards to which internationally active CCPs are held.

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Monday, February 29, 2016

SEC Expects its Cross-Border Swaps Regulations to "Level the Playing Field"

Author: David Schwartz

On February 10, 2016, the Securities and Exchange Commission approved final rules intended to ensure that both U.S. and foreign dealers are subject to U.S. regulation when they engage in security-based swap dealing activity in the United States. The new rules require non-U.S. companies that use personnel located in a U.S. branch or office to arrange, negotiate, or execute a security-based swap transaction in connection with its dealing activity to include that transaction in determining whether it is required to register as a security-based swap dealer. The rules should sweep more non-U.S. security-based swap dealers into the SEC’s regulatory ambit, thereby subjecting more of the global business to consistent registration and regulatory requirements.  

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