Contributor: Stephen Nimmo
As the final rule for market classification definition of the Dodd-Frank Act (DFA) was entered in the Federal Register on May 23, 2012, the triggers for many of the 60-90 day compliance periods are active. This publication has set many DFA initiatives into motion at many different swap market participants, most notably those with new swap data repository (SDR) offerings.... read more
Contributor: David Morgan
The regulatory push towards real-time trading risk management was addressed in a panel session at the 2012 SunGard Industry Seminar in London. The discussion pulled together of a lot of useful information for participants, but ultimately didn’t generate too much controversy. It seems that the regulators are for the most part pushing at an open door with their demands for tighter pre-trade risk controls. Stories abound, we’re told, of risk management teams now able to pursue projects they had long thought important or even necessary, but had historically lost out to other competing priorities. ... read more
Contributor: Marcus Cree
This month saw the Professional Risk Managers International Association (PRMIA) celebrate its tenth birthday in style at the Marriott Marquis in New York’s Times Square at its inaugural risk conference, sponsored in part by SunGard. Even with the credit crisis behind us, ongoing issues with euro zone sovereignty risk, Basel III, the Volcker rule, the failure of MF Global, and the move to central clearing proved that there was plenty to talk about at the event. And if 2012 had not been eventful enough so far, J.P. Morgan’s announcement of a $2 billion loss on the eve of the conference both highlighted the profile of risk management and guaranteed a buzz at the party.... read more
Contributor: Andrew Shinn
Facebook’s problems on its first day of trading had many brokers concerned about their ability to borrow shares on Wednesday to settle short sales. Therefore, on Tuesday, as some institutional investors received shares early in the allocation process, brokers borrowed 26 million Facebook shares at a costly 40% annual interest rate. However, on Wednesday, a flood of lendable shares sent borrowing costs for Facebook shares down 80%. Another 28 million FB shares were borrowed at these lower rates on Wednesday. On Thursday, brokers borrowed another 10 million shares but returned 9 million, for a net additional 1 million shares borrowed.... read more
Contributor: Mark Gialo
Come July 2012, FINRA will be “raising the bar” on the fiduciary obligations financial advisors have relative to their clients. While prior rules (FINRA 405 & 2090) emphasized transaction suitability, FINRA 2111 suitability & 2090 know your customer rules focus on greater investor protection and advisor accountability. This puts the onus on financial advisors to use reasonable diligence and understand essential facts about their clients. Broker dealers need to interpret and incorporate the new FINRA regulations into their technology solutions to ensure they are in compliance. What is the scope of this activity? What are the rules and enhancements necessary to fulfill the obligation set forth by FINRA?... read more
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