Formal Regulatory Remedies - Center for the Study of Financial Market Evolution (CSFME)

Basel Proposes Changes to Reduce Variation in Credit Risk Weighted Assets

by David Schwartz J.D. CPA | Wednesday, March 23, 2016 | All, Change Overview and Rationale, Formal Regulatory Remedies

The Basel Committee on Banking Supervision today released a consultative document proposing a set of changes to the Basel III framework’s approaches for determining Banks’ regulatory capital requirements for credit risk. The goals of these changes are to (i) reduce the complexity of the regulatory framework and improve comparability; and (ii) address excessive variability in the capital requirements for credit risk.

Is Liquidity Suffering from Too Much Regulation?

by David Schwartz J.D. CPA | Thursday, March 17, 2016 | All, Change Overview and Rationale, Formal Regulatory Remedies

In a March 7, 2016 speech at the Institute of International Bankers Annual Washington Conference in Washington, DC, Federal Reserve Governor Lael Brainard remarked that new regulations may be having inadvertent effects on market liquidity. Governor Brainard’s statement is notable because Fed officials and regulators have been careful to avoid that inference.

Despite Delay, MiFID II Remains a Priority

by David Schwartz J.D. CPA | Sunday, March 13, 2016 | All, Change Overview and Rationale, Formal Regulatory Remedies

Among the priorities in the European Commission’s (EC) list of its planned initiatives for 2016 is a new push to refine a package of reforms under its Markets in Financial Instruments Directive (MiFID II). After announcing just last month that MiFID II implementation would be delayed by year to January 3, 2018 due to the overwhelming complexities involved, the EC indicated that it would focus on a number of technical points in MiFID II that need to be specified further, including:

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

by David Schwartz J.D. CPA | Sunday, February 28, 2016 | All, Change Overview and Rationale, Formal Regulatory Remedies

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 staff 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.

Reforming the Asset Management Industry is a Global Challenge

by David Schwartz J.D. CPA | Friday, February 19, 2016 | All, Change Overview and Rationale, Formal Regulatory Remedies

SEC Chairman Mary Jo White used the occasion of her keynote speech a the September 21, 2016 International Bar Association’s annual conference to address some the challenges the Securities and Exchange Commission faces in regulating an ever more global asset management industry. With U.S.-registered asset managers increasing their activities in Europe, Africa, and Asia Pacific, the SEC has partnered with IOSCO, the FSB, and others to take transformative steps to modernize regulation of the asset management industry on a more global scale.

B of E Issues Consultation on Systemic Risk Buffer for Ring-Fenced Banks

by David Schwartz J.D. CPA | Sunday, February 14, 2016 | All, Change Overview and Rationale, Formal Regulatory Remedies

On January 29, 2016, the Bank of England (B of E) issued a consultation paper laying out its proposed framework for the systemic risk buffer (SRB) to be applied to ring-fenced banks and large building societies holding more than £25 billion of retail and small and medium enterprise deposits. The proposals are intended to provide clarity to banks on how much capital they will be required to reserve in connection with the activities of their “ring-fenced” arms.

OFR Report Highlights Unintended Consequences of Swaps CCPs

by David Schwartz J.D. CPA | Wednesday, January 27, 2016 | All, Change Overview and Rationale, Formal Regulatory Remedies

On January 27, 2016, the Office of Financial Research (OFR), an arm of the Treasury Department created under the Dodd-Frank Act, issued its fourth annual report to Congress. The report highlights the results of OFR research, risks to financial markets, and OFR priorities for the coming year. Notable among its findings, the report suggests that reforms mandating central counterparties in the formerly OTC swaps market could unintentionally increase systemic risk in the long run rather than reducing it.

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

by David Schwartz J.D. CPA | Tuesday, January 19, 2016 | All, Change Overview and Rationale, Formal Regulatory Remedies

In a joint statement issued on February 10, 2016, 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.

FINRA and SEC to Focus on Advisor Fees

by David Schwartz J.D. CPA | Tuesday, January 19, 2016 | All, Change Overview and Rationale, Disclosure Regimes, Formal Regulatory Remedies

Both FINRA and the Securities and Exchange Commission have indicated a renewed interest in the fees charged by investment advisors. In a May 2016 notice, FINRA announced a mutual fund fee waiver sweep intended to gather information regarding whether advisors had mechanisms in place to ensure that mutual fund investors are receiving promised fee waivers and reimbursements. The SEC’s investor advocate Rick A. Fleming announced in his annual report to Congress published on June 30 that improved disclosure of fees and expenses charged by financial advisers is a top priority for his office in the new fiscal year.

Pushback on SEC Liquidity Proposals

by David Schwartz J.D. CPA | Monday, January 18, 2016 | All, Change Overview and Rationale, Formal Regulatory Remedies

The Securities and Exchange Commission’s September 2015 rule proposals addressing mutual fund liquidity issues have not been received with great enthusiasm by the fund industry. Some major players have made it quite clear in their comment letters that they feel the SEC has missed the mark with this proposal.

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Formal Regulatory Remedies