Change Overview and Rationale - Center for the Study of Financial Market Evolution (CSFME)

Should We Be Alarmed About Empty Voting?

by David Schwartz J.D. CPA | Monday, November 19, 2012 | All, Change Overview and Rationale, Formal Regulatory Remedies, Lender Directed Voting

Should we be alarmed about empty voting? According to a recent article, “A Call to Arms on Empty Voting!” by Andrew MacDougall, Robert M. Yalden and Jeremy Fraiberg, yes, we should indeed. Using a proxy battle over a proposal by Canadian company, TELUS to eliminate its dual class share structure earlier this year as an example, MacGougall, Yalden, and Fraiberg assert that as “the number of public M&A transactions increases, and if U.S. hedge funds continue to look for opportunities in Canada to engage in strategic gamesmanship, concerns about empty voting will also increase.”

Is the CFTC Fatally Fragmenting the Global Swaps Market?

by David Schwartz J.D. CPA | Monday, November 19, 2012 | All, Change Overview and Rationale, Formal Regulatory Remedies

On July 6, House Financial Services Committee Chairman Spencer Bachus (R-AL) initiated a series of hearings reviewing the two-year experience of the Dodd-Frank Act, and in particular the effects of its derivatives provisions. Prompted by the June 28 release by the CFTC of proposed interpretive guidance regarding the application of the Dodd-Frank Act to non-US persons engaging in swaps activities with a connection to the US, Bachus also urged the Senate to pass legislation, HR 2682, codifying and clarifying the end-user exemption from Dodd-Frank derivatives regulation.

FSB Renews its Focus on Shadow Banking

by David Schwartz J.D. CPA | Sunday, November 18, 2012 | All, Change Overview and Rationale, Formal Regulatory Remedies

“Appropriate monitoring and regulatory frameworks for the shadow banking system needs to be in place to mitigate the build-up of risks.”

FOMC Mulls Change of Tactics to Fed Funds Rate Changes

by David Schwartz J.D. CPA | Friday, November 16, 2012 | All, Change Overview and Rationale

The latest Federal Reserve Open Market Committee (“FMOC”) minutes reveal serious consideration of an approach to monetary policy whereby the Fed uses quantitative triggers based on unemployment rates and inflation, as opposed to date-based thresholds, to guide its changes in the federal funds rate.

Novel Monetary Policy Has Its Risks, But Also Its Rewards

by David Schwartz J.D. CPA | Friday, October 19, 2012 | All, Change Overview and Rationale

In an October 14, 2012 address in Tokyo, Fed Chairman Ben Bernanke outlined the Fed’s near term economic outlook, and discussed in an international context the basic rationale underlying the Federal Reserve’s recent policy decisions. According to Bernanke, the outlook is for the economic recovery to proceed at a moderate pace in coming quarters, with the unemployment rate declining only gradually and inflation running less than 2%.

FSOC Taps a Novel Power to Tame Money Funds

by David Schwartz J.D. CPA | Sunday, October 14, 2012 | All, Change Overview and Rationale, Formal Regulatory Remedies

“Both the President’s Working Group on Financial Markets and the Financial Stability Oversight Council have consistently called for the SEC to pursue additional reforms to address structural vulnerabilities in [money market funds], including unanimous recommendations in the [FSOC’s] 2011 and 2012 annual reports. The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the Council both the responsibility and the authority to take action to address risks to financial stability if an agency fails to do so. (emphasis added) Accordingly, I would like the [FSOC] to consider taking a series of steps to address this challenge.”

Global Derivatives Reforms. Getting it Right the First Time.

by David Schwartz J.D. CPA | Saturday, October 13, 2012 | All, Change Overview and Rationale, Formal Regulatory Remedies

“[G]lobal interconnections within the swap markets require cross-border regulatory cooperation and harmonization, as no one national regulator is equipped with the resources necessary to regulate comprehensively every participant in its local market nor every market in which its local institutions participate. At the same time, these global interconnections increase the potential for conflicting national implementation of regulatory reform to have adverse effects on the markets and market participants, especially if applied extraterritorially.”

More Securities Lending Could Be a Shot in the Arm for European ETFs

by David Schwartz J.D. CPA | Sunday, September 23, 2012 | All, Change Overview and Rationale

With 1,304 funds and €215 billion assets under management, Exchange Traded Funds (ETFs) listed in Europe are a major element of the European fund management industry. However, some feel that European ETFs are hindered by a lack of liquidity as compared to their counterparts in the US ETF market, and that European ETFs could be even more robust if they followed the US model of employing greater levels of securities finance and collateral management.

Full Speed Ahead on the Volcker Rules Says Senior Treasury Official

by David Schwartz J.D. CPA | Wednesday, September 19, 2012 | All, Change Overview and Rationale, Formal Regulatory Remedies

Despite efforts to delay or prevent them, the Volker Rules are on their way says Treasury Under Secretary for Domestic Finance Mary Miller in remarks to the American Banker Regulatory Symposium. Miller says the five regulators working on the rules have read carefully the 18,000 comment letters on their initial proposal, and expect to issue final Volker Rules perhaps by year end.

Hedge Funds: “We’re not Shadow Banks”

by David Schwartz J.D. CPA | Wednesday, September 19, 2012 | All, Change Overview and Rationale

In a May 16, 2012 letter to the European Commission, the Managed Fund Association (MFA), an association of hedge funds and managed future firms, shot back at the FSB’s April 2011 greenpaper/background note on shadow banking. In its response, MFA argues that it was a mistake to include hedge funds as part of the shadow banking system as the FSB has defined it.

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Change Overview and Rationale