Introduction In the dynamic landscape of financial regulation, the accuracy and reliability of internal rules-based (IRB) models for regulatory capital calculations have become increasingly critical. The Treasury’s Basel IV endgame reproposal presents a valuable...

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Change Overview and Rationale
AI’s Expanding Influence on UK Finance
The Bank of England (BoE) and the Financial Conduct Authority (FCA) have released their 2024 report on artificial intelligence (AI) in UK financial services, highlighting a significant surge in AI adoption across the sector. The report, titled "Artificial Intelligence...
Fed Official Outlines Potential Changes to Basel III Endgame Proposal
On September 10, 2024, Michael S. Barr, the Federal Reserve Board Vice Chair for Supervision, delivered a speech at the Brookings Institution outlining potential changes to the Basel III Endgame and G-SIB Surcharge proposals, originally released in July 2023. Barr...
SEC Extends SLATE Review Period Due to Industry Concerns
Many Believe FINRA Exceeded its Mandate On June 10, 2024, the SEC extended the period by which it must take action on FINRA’s proposed SLATE Rules from June 21, 2024 to August 5, 2024.
Predictive AI in Securities Finance: Step One
On April 2nd, 2026, an effusion of data from a daily trove of U.S. regulatory filings will create resources to drive many new use cases for artificial intelligence in capital markets. A clear opportunity exists in securities finance, where practitioners have repeatedly stated that major IT investments will be needed to comply with the many new regulatory mandates. “Black box” AI platforms may seem a ready solution but can also create nightmares for client reviews and lawsuits.
In our opinion, public data can clarify the rational limits of influence for predictive artificial intelligence. The best courtroom-ready models will display an audit trail based on the replication of critical decision parameters and vectors from past markets. Vendor data in securities finance may be more timely and deeper than the public releases but, for judicial purposes, the public data will provide foundational evidence for the “bounded rationality” of decision-makers, as defined by the late Herbert Simon, Nobel Laureate and the father of Artificial Intelligence.
New Money Fund Reforms: Safer and More Resilient Cash Collateral Pools?
More liquidity, transparency, and safety for institutional investors? The Securities and Exchange Commission (SEC) recently adopted final rules on money market (2a-7) fund reforms. These reforms are designed to make money market funds more resilient and liquid, potentially making them safer and more attractive vehicles for mutual funds to use as collateral pools for their […]
SEC Adopts Long Awaited Securities Lending Disclosure Rule
Persuasive Public Comment Helps Mold the Final Rule The Securities and Exchange Commission (SEC) has adopted a new rule, rule 10c-1, to increase transparency in the securities lending market. The rule requires certain persons to report information about securities loans to a registered national securities association (RNSA). The RNSA will then make certain information publicly […]
Archegos Litigation Heats Up
Rogue Trader’s Collapse Still Ripples Through the Financial Industry In March 2021, Archegos Capital Management, a family office run by Bill Hwang, collapsed in a spectacular fashion, leaving its counterparties with over $10 billion in losses. The collapse of Archegos was one of the largest hedge fund failures in history, and it has since been […]
Modernizing Beneficial Ownership Reporting
The Industry Waits for Final Action from the SEC In early 2022, the Securities and Exchange Commission (SEC) proposed several significant changes to Regulations 13D and 13G, which require certain persons to disclose their beneficial ownership of equity securities. These changes seek to improve the transparency and timeliness of beneficial ownership reporting and to make […]
The SEC Unveils its Agenda for 2023
A Busy Mix of New Business and Old In its recently updated regulatory flexibility agenda, the Securities and Exchange Commission has announced its regulatory priorities for 2023. A mix of old and new business, the Commission’s 2023 plans include finalizing 29 existing proposals and placing 23 new proposals up for consideration. In a January 4, […]