Thursday, March 3, 2022

Disclosure and Beyond: Restructuring the U.S. Equity Markets

BRIEFING GUIDE to the SEC's Aggressive Agenda to Head off the Next "Big Squeeze"

Author: David Schwartz J.D. CPA

On Friday, February 25, 2022, the Securities and Exchange Commission (SEC) proposed its latest round of GameStop rule proposals. In addition to enhanced public disclosures of short sales by institutional investors, the Commission announced a 30-day extension of the comment period on its sweeping securities lending disclosure proposal, Rule 10c-1, and technical amendments to the "consolidated audit tape" regulations. These separate, but related, disclosure proposals may well be the start of a much broader and far-ranging regulatory response to the kind of market disruptions epitomized by the Gamestop event.  

 

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Tuesday, March 30, 2021

Reddit Trading and Resilience in U.S. Equity Finance

Part 3. Real-time in GameStop: Realistic, ask Operations Experts?

Author: Ed Blount

Pressure is growing on industry and government to respond to 2021’s extreme stock market volatility. Following on the controversy around the GameStop retail buy-side suspensions, one of the remedies being discussed is shortening of the settlement cycle and, perhaps, even a shift to real-time settlement in the US equity markets. Yet the practicality of the situation is that most of the banks and dealers in the securities financing sector just can’t operate real-time in today's environment. The timeline for financing activity, which underpins much of the trading by professionals in today's markets, as well as the lending of securities by institutional investors, cannot easily be compressed. For that reason, equity financing's capabilities are prime considerations for any change in the market infrastructure. Yes, trades can be executed in real-time, but trades are not the same as loans.

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Thursday, March 18, 2021

Reddit Trading and Resilience in U.S. Equity Finance

Part 2. Heated Debates Begin about Trading Suspensions

Author: Ed Blount

On February 4th, 2021, the Securities and Exchange Commission called for a “robust public discussion” about whether online brokers’ late January suspensions of retail trading should lead to changes in the market infrastructure. In the view of attorneys for the aggrieved retail traders, there will be a lot for the SEC to consider. More than 50 lawsuits have been filed as of today, creating another form of discussion. Our blog series on the potential infrastructure changes continues with a few of the likely discussion topics.

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