All - Center for the Study of Financial Market Evolution (CSFME)

List of Open Consultations and Rule Proposals

by David Schwartz J.D. CPA | Friday, September 19, 2014 | All, Formal Regulatory Remedies, ROSE

With the November 15 and 16 G20 Summit in Brisbane fast approaching, policy makers and regulators in the US and the UK have been hard at work. Not to be outdone, IOSCO, ESMA, and BIS have also been busy. Eager to demonstrate progress on financial re-regulation and reform, there has been a flurry of consultation papers and rule proposals at all levels over the past quarter. The following is a list, current as of October 9, 2014, of some of the more noteworthy proposals and consultation papers whose comment periods are currently open. It should be noted that a number of these consultations close imminently.

Forex Becomes the Focus of Global Investigations

by David Schwartz J.D. CPA | Friday, September 19, 2014 | All, Formal Regulatory Remedies

Amid allegations of widespread collusion and corruption amongst forex traders, regulators all over the globe have launched investigations in to the the lucrative $5.3 trillion daily foreign currency exchange market. With British firms handling 41% of all currency trades, London is the focus of many of these investigations. In contrast to other financial scandals like the LIBOR rate scandal, forex trading firms have taken an active self-policing role and launched internal investigations of their own, with at least 20 forex traders being suspended or terminated as a result. Royal Bank of Scottland, UBS, RBS, Citigroup, Deutsche Bank, JPMorgan, Goldman Sachs, and Lloyds Banking Group have all vowed to assist regulators in investigating wrongdoing, and 10 banks have handed forex trading data to the Financial Conduct Authority (FCA). In addition, each has instigated new internal policies aimed at preventing collusion amongst currency dealers at rival firms.

Bank Directors May Find Themselves With a Heightened Standard of Care

by David Schwartz J.D. CPA | Wednesday, September 17, 2014 | All, Formal Regulatory Remedies, Procedural Changes

While regulators should have clear expectations for boards, we need to make sure that we are creating expectations that lead to boards spending more time overseeing . . . risk-management and control functions . . . A recent address by Federal Reserve Governor Daniel...

Could Redemption Gates Actually Encourage Runs on Funds?

by David Schwartz J.D. CPA | Wednesday, August 27, 2014 | All, Change Overview and Rationale, Formal Regulatory Remedies

Under rules recently finalized by the SEC, all money market funds will be permitted, and under some circumstances required, to impose liquidity fees and gates against investor redemptions if the fund’s weekly liquid assets fall below specified thresholds. In their release, the SEC said the purpose of these new rules is to mitigate money market funds’ susceptibility to heavy redemptions and improve their ability to manage and thwart possible contagion from redemptions.

What’s in a Name? Would a Derivative by Any Other Name Smell As Sweet?

by David Schwartz J.D. CPA | Tuesday, August 19, 2014 | All, Change Overview and Rationale, Formal Regulatory Remedies

“The different approaches to the interpretation of MiFID I across Member States mean that there is no commonly-adopted application of the definition of derivative or derivative contract in the EU for some asset classes. Whilst this issue has in the past been noted as a concern since the implementation of MiFID, the practical consequences have come to the forefront with the implementation of the European Markets Infrastructure Regulation (EMIR).”

Senate Democrats Call for Executive Action to Stop Corporate Inversions

by David Schwartz J.D. CPA | Wednesday, August 13, 2014 | All, Change Overview and Rationale, Formal Regulatory Remedies

In a letter to President Obama, three Senate Democrats have urged the President to use executive action to end a growing trend in corporate inversions motivated by tax considerations. Senate Assistant Majority Leader Dick Durban (D-IL), Senate Assistant Majority Leader, and Senate Banking Committee members, Jack Reed (D-RI) and Elizabeth Warren (D-MA), called him to use necessary executive authority to end tax breaks for companies that enter into mergers that move their headquarters overseas to avoid paying U.S. taxes.

Does Mandatory Shareholder Voting Prevent Bad Acquisitions?

by David Schwartz J.D. CPA | Tuesday, July 22, 2014 | All, Change Overview and Rationale, Lender Directed Voting

In the United Kingdom, corporate acquisition deals larger than 25% in relative size are subject to a mandatory shareholder vote, while in most of continental Europe there is no vote, and in Delaware voting is largely discretionary. In a new paper by Marco Becht, Professor of Corporate Governance at the Université libre de Bruxelles; Andrea Polo of the Department of Economics and Business at the Universitat Pompeu Fabra and Barcelona GSE; and Stefano Rossi of the Department of Finance at Purdue University studies the effect shareholder engagement has on preserving shareholder value in these kinds of large-scale acquisition transactions. Their study concludes that mandatory voting makes boards more likely to refrain from overpaying or from proposing deals that are not in the interest of shareholders.

Should Pension Funds Police Corporate Governance?

by David Schwartz J.D. CPA | Monday, July 21, 2014 | All

SEC Commissioner Luis A. Aguilar has long been a champion of empowering shareholders to enforce sound corporate governance. In a July 1, 2014 address before a meeting of the Latinos on Fast Track (LOFT) Investors Forum, Commissioner Aguilar once again addressed the role pension plans and other institutional investors play in ensuring that the companies they invest in make sound governance decisions.

BIS Sees the Financial System at a Crossroads

by David Schwartz J.D. CPA | Sunday, June 29, 2014 | All, Change Overview and Rationale, Commentary

In their 84th Annual Report, the Bank for International Settlements examines the current state of global financial affairs and highlights some trends it sees emerging in the financial framework. While noting that the overall financial system has has gained some strength since the crisis, banks remain in a rebuilding phase, concentrating their business models towards traditional banking.

Fed Attention Turns to Wholesale Financing Activities

by David Schwartz J.D. CPA | Thursday, June 19, 2014 | All, Change Overview and Rationale, Formal Regulatory Remedies

In a November 22, 2013 address before the Americans for Financial Reform and Economic Policy Institute Conference, Federal Reserve Board Governor Daniel K. Tarullo outlined a potential regulatory initiative to limit short-term wholesale funding risks.

Category: