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

Fed Pres. Dudley Addresses Market Liquidity

by David Schwartz J.D. CPA | Friday, June 19, 2015 | All, Change Overview and Rationale, Formal Regulatory Remedies

In a September 30, 2015 speech before the SIFMA Liquidity Forum in New York, Fed President and Chief Executive Officer William C. Dudley addressed concerns that market liquidity is being hindered by regulation. While open to the idea of finding a better balance between new regulations and improved trading conditions, Dudley stated that he found, “the evidence to date that liquidity has diminished markedly is, at best, mixed.” In addition, Mr. Dudley does not find any real evidence that regulations are the primary cause of changing liquidity conditions in the bond and other markets.

BIS Forms Consultation Committee to Address FX Practices

by David Schwartz J.D. CPA | Saturday, May 30, 2015 | All, Change Overview and Rationale, Formal Regulatory Remedies

Amidst the series of legal settlements in recent months by global banks for forex market manipulation, the Bank for International Settlements (BIS) has announced that it will set up a working group under its Markets Committee to study improvements in the foreign exchange markets.

BIS Progress Report on Basel Framework Implementation

by David Schwartz J.D. CPA | Saturday, May 16, 2015 | All, Change Overview and Rationale, Formal Regulatory Remedies

At the end of April, the Bank for International Settlements (BIS) issued its eighth progress report on the adoption of the Basel regulatory framework. This report provides a high-level overview of the progress made by Basel Committee member states in adopting the Basel II, Basel 2.5, and Basel III framework as of the end of March 2015.

Basel Tightens the Reins on Internal Risk Modeling by Banks

by David Schwartz J.D. CPA | Sunday, April 19, 2015 | All, Change Overview and Rationale, Formal Regulatory Remedies

In a November 2, 2015 speech in Madrid, Stefan Ingves, Chairman of the Basel Committee and Governor of Sveriges Riksbank, announced that the Basel Committee on Banking Supervision will revisit internal risk modeling by banks. According to Mr. Ingves, “ample evidence has accumulated to suggest that the current role of internal models in the regulatory framework does not strike the right balance between simplicity, comparability and risk sensitivity.” While “the use of internally modelled approaches was a defining feature of Basel II,” the Basel Committee expects to revisit this reliance on internal modeling and, perhaps, broadly eliminate it for some risk categories.

A Revised Fiduciary Standard Proposal from the DOL

by David Schwartz J.D. CPA | Monday, April 13, 2015 | All, Change Overview and Rationale, Formal Regulatory Remedies

The Department of Labor has issued its long awaited reproposal of fiduciary standards for advisors of ERISA retirement plans. These new rules propose to expand the scope of the the definition of fiduciary under ERISA in order to capture more of the current services of 401(k) and IRA providers.

Congressional Republicans Want Answers on DOL and SEC Fiduciary Standards

by David Schwartz J.D. CPA | Tuesday, March 24, 2015 | All, Formal Regulatory Remedies

In a March 4, 2015 letter, two House Republicans requested answers from Department of Labor (DOL) Secretary Thomas E. Perez about the process for devising new fiduciary rules for investment professionals providing services to retirement plans. Representative John Kline (R-MN), Chairman of the House Committee on Education and the Workforce, and Rep. Phil Roe (R-TN), Chairman of the Subcommittee on Health, Employment, Labor and Pensions, want to know if and how the DOL and the Securities and Exchange Commission (SEC) are working together to minimize potential conflicts, higher costs, and detrimental effects on information available to those saving for retirement.

Revised Fiduciary Standards Slowed but Not Stopped

by David Schwartz J.D. CPA | Thursday, March 19, 2015 | All, Change Overview and Rationale, Formal Regulatory Remedies

Pursuant to a mandate in the Dodd-Frank act, both the Department of Labor and the Securities and Exchange Commission have been working to develop uniform fiduciary standards for investment advisers and broker-dealers. The efforts of the DOL and SEC have unfolded over the past five years with both floating proposals that have been met with stiff opposition from industry and in Congress. Each effort has hit its own respective roadblocks over the past year. However, despite eleventh-hour efforts by members of the investment industry and some on Capitol Hill, both the DOL and SEC appear to be moving ahead with their respective uniform fiduciary standards.

A Call for Academics to Join Policy Debates Over Securities Regulations

by David Schwartz J.D. CPA | Monday, March 16, 2015 | All, Formal Regulatory Remedies, Procedural Changes

In a recent address before the Center for the Study of Financial Regulation at the University of Notre Dame’s Mendoza College of Business, SEC Commissioner Michael S. Piwowar urged academics to engage more actively in policy debates over securities regulation. Commissioner Piwowar is particularly interested in “data-driven” input from academics in connection with potential reforms to the structure of the U.S. securities markets. The Commission recently finalized the composition of a Market Structure Advisory Committee that will focus on the structure and operations of the U.S. equities markets and will function as a forum and resource for reviewing specific, clearly articulated initiatives or rule proposals. Piwowar sees the Committee’s work as a prime opportunity for academics studying the securities markets to provide real input and make their voices heard.

Basel Banking Supervision Committee Priorities for 2015-2016

by David Schwartz J.D. CPA | Tuesday, February 24, 2015 | All, Change Overview and Rationale, Formal Regulatory Remedies

The Basel Committee on Banking Supervision has announced its planned areas of focus for 2015 and 2016 as it continues to propose and finalize the remaining elements of its Basel III regulatory reform agenda. The Committee will continue to pursue its post-crisis reform agenda, but will now look toward restoring confidence in capital ratios, ensuring consistency across the regulatory framework, monitoring and assessing the implementation of the framework, and improving the overall effectiveness of supervision.

A Hard Push Against the FSOC’s Non-Bank SIFI Designation

by David Schwartz J.D. CPA | Thursday, February 19, 2015 | All, Change Overview and Rationale, Formal Regulatory Remedies

Over the objections many, including asset managers, insurance companies, and even legislators and other regulators, the Financial Stability Oversight Council (FSOC) has pushed ahead with its mandate to identify risks to financial stability that could arise from the material financial distress or failure, or ongoing activities, of nonbank financial companies (Non-bank SIFIs).

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Formal Regulatory Remedies