Some market participants have warned that the 2-year-old Sheltered Harbor initiative, which has evolved into a "buddy" system in which banks store one another's data in safekeeping overnight, is still vulnerable to cyberattacks. Technology provider Synechron is proposing a blockchain-based model, which it says would greatly improve security, but the model has not yet been evaluated by industry bodies involved in Sheltered Harbor, including FSR.
The Securities and Exchange Commission is set to vote Wednesday on whether firms will be required to disclose any cyberrisks and incidents that could financially harm their firm. The guidance, which has not been updated since 2011, comes after a data breach at Equifax.
The action by Massachusetts charging Scottrade with violating part of the Labor Department's fiduciary rule is without merit and demonstrates the importance of vacating the rule, lawyer Eugene Scalia told the US Court of Appeals for the 5th Circuit on Friday. The state's action "confirms Appellants' concern that the portions of the rule that took effect on June 9, 2017 will continue to impose extensive burdens and costs on Appellants' members, even while other aspects of the Rule have been postponed," Scalia wrote.
State securities regulators have authority to enforce the Labor Department's fiduciary rule, and exercising that authority is "part of the normal scope of what states ought to be doing to protect their citizens," said Joseph Borg, director of the Alabama Securities Commission and president of the North American Securities Administrators Association. When Massachusetts' securities regulator filed charges against Scottrade, including a claim the broker-dealer had violated impartial-conduct standards of the fiduciary rule, "Massachusetts was certainly within its parameters," Borg said.
Banks and credit unions could make more small installment loans to help consumers who face unexpected expenses, and they could do so with much lower interest rates than payday lenders charge, a report from Pew Charitable Trusts said. Pew's Alex Horowitz said such options could keep borrowers in the "financial mainstream."
The abnormally low market volatility of 2017 is unlikely to return for the foreseeable future, several strategists say. However, strategist Michael Purves says the bull market is not necessarily over because stocks can still range higher during volatility, while strategist Phil Orlando says current conditions give skillful stock pickers an opportunity to show their expertise.
While research points to good saving habits among millennials, a survey by Allianz Life Insurance Co. of North America shows 88% of respondents think social media creates a tendency to compare their lifestyles with others, and 57% say it has influenced them to spend money they had not planned to. "While every generation has experienced a need to 'keep up with the Joneses,' social media seems to have helped take it to a new level for millennials," Allianz's Paul Kelash says.
The Financial Industry Regulatory Authority has issued an investor alert that criminals are using its name and logo and the signature of its CEO in investment scams. In one advance-fee scam, prospective investors were given the false impression a FINRA guarantee backed money put into the venture.
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, laid the blame for Fannie Mae and Freddie Mac's needing Treasury funding on Federal Housing Finance Agency Director Mel Watt. Hensarling has demanded an explanation from Watt by Friday that lays out "how your decision to require continued GSE payments to the [Housing Trust Fund and Capital Magnet Fund] despite the need for a new draw on Treasury funds does not directly contradict your previous written and verbal guidance from 2014 and 2015, and how the FHFA intends to limit your ability to exercise your discretion in the future so that it can establish a consistent policy on this subject that provides both clear and reliable guidance to Congress and the GSEs."
Federal Reserve Chairman Jerome Powell has chosen two monetary-policy specialists -- Jon Faust, a professor of economics at Johns Hopkins University, and Antulio Bomfim, an economist in the Fed's monetary-affairs division -- to assist him as senior advisers, people familiar with the matter said. Faust is among those suggesting that the Fed reconsider its approach to targeting inflation.