Markets largely unmoved by tax cut announcement | Future of Reg NMS is a top issue, SIFMA's Snook says | Proposed tax cuts' effects on munis remain unclear
April 27, 2017
SIFMA SmartBrief
News on the capital markets
Morning Bell
Markets largely unmoved by tax cut announcement
The announcement by Treasury Secretary Steven Mnuchin that the corporate tax rate might be cut to 15% and the administration's proposed tax reform program will be completed by the end of the year caused only modest upward movement in the major financial indexes. "There is really not much new here, and there still is no clear path to getting this through Congress," said Douglas Kass of Seabreeze Partners, a hedge fund.
Reuters (4/26),  Politico (4/26),  Financial Times (tiered subscription model) (4/26) 
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Industry News
Future of Reg NMS is a top issue, SIFMA's Snook says
Randy Snook, an executive vice president at SIFMA, told participants at the SIFMA Equity Market Structure Conference in New York on Wednesday that the future of Regulation National Market Structure, adopted by the Securities and Exchange Commission in 2005, is a top priority. "Equity markets have evolved considerably since Reg NMS was adopted. Now is a very appropriate time for the SEC to conduct a review," he said. "Ultimately, SIFMA's goal is to improve market resilience and ensure the equity market continues to benefit investors and play an essential role in capital formation." Read Snook's remarks.
Traders magazine online (4/27) 
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Proposed tax cuts' effects on munis remain unclear
The Trump administration's proposed tax cuts could threaten the municipal bond market, but that market has so far remained stable in the wake of the proposal's announcement. Some sectors may even outperform in the near future, experts say.
Bloomberg (4/26) 
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Washington Roundup
SEC plans test of lower exchange fees
The Securities and Exchange Commission is working on a pilot program that will offer lower fees for stock exchange access, addressing a concern of many brokers. Acting SEC Chairman Michael Piwowar has ordered the test, David Shillman, associate director of the SEC's Division of Trading and Markets, said at the SIFMA Equity Market Structure Conference on Wednesday.
Reuters (4/26) 
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Mnuchin eyes reform for housing market finance
Treasury Secretary Steven Mnuchin says once the Trump administration has its major tax reforms underway, it will turn its attention to a fundamental overhaul of housing market finance. The issue has remained problematic since the financial crisis of 2008, and many market participants would welcome an initiative to bring private capital investment back into the market and avoid the need for further taxpayer bailouts of Freddie Mac and Fannie Mae.
MarketWatch (4/26),  Reuters (4/26) 
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Lawmaker wants regulators to create innovation offices
Lawmaker wants regulators to create innovation offices
McHenry (Saul Loeb/AFP/Getty Images)
Rep. Patrick McHenry, R-N.C., vice chairman of the House Financial Services Committee, said he will introduce a bill requiring financial regulators to launch innovation offices. The offices would exchange financial technology with one another and help fintech startups get in touch with the proper government authorities, he said.
Bloomberg BNA (free content) (4/26),  MLex (subscription required) (4/25) 
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Fed reportedly overhauls big-bank oversight panel
The Federal Reserve is revamping its Large Institution Supervision Coordinating Committee, sources said. Changes to the LISCC, created in 2010 to improve the Fed's oversight of major banks, involve streamlining the panel's subgroups to clarify roles and reduce redundancies.
The Wall Street Journal (tiered subscription model) (4/26) 
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Commentaries: Lawmakers take on financial rules again
Authorities implemented rules after the financial crisis to prevent another catastrophe, but the regulatory tide has shifted, commentators write. An updated Financial CHOICE Act could alter how the Securities and Exchange Commission supervises markets, Peter Henning writes.
The New York Times (free-article access for SmartBrief readers) (4/24),  The Wall Street Journal (tiered subscription model) (4/24) 
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Opinion: 2 more damaging regulations need to be repealed
Lawmakers should repeal the Education Department's borrower-defense rule and the Labor Department's exemption of state-run retirement plans from the Employee Retirement Income Security Act. "Republicans would do taxpayers and the Trump Administration a favor by unwinding these rules before they do serious damage," according to this opinion piece.
The Wall Street Journal (tiered subscription model) (4/26) 
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Operations Update
Audit: Fed's bank cybersecurity oversight needs work
An internal Federal Reserve audit concluded that cybersecurity risks at large banks are being overlooked because Fed bank examiners have difficulty identifying thousands of service providers. The central bank's inspector general said those vendors process loans and checks; prepare checks, statements and notices for mailing; and calculate and post interest and other credits and charges.
Federal Computer Week (4/24),  MLex (subscription required) (4/25) 
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Last Chance to Register: Regional Senior Investor Protection Workshop -- May 2, Philadelphia
There is less than a week left to register for SIFMA's Senior Investor Protection Regional Workshop. Join us on May 2 in Philadelphia for a unique opportunity to explore real-life financial crime and cognitive decline scenarios. Also gain practical insights into the current legal and regulatory landscape and more during our hands-on program. Attendees will be eligible to earn up to five certified financial planner credits and will also receive a complimentary copy of SIFMA's Senior Investor Protection Toolkit.
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Calling All Volunteers: SIFMA Foundation is Looking for InvestWrite Judges
More than 5,000 industry volunteers served as judges for last year's InvestWrite program, a national essay competition based on the acclaimed Stock Market Game. SIFMA and the SIFMA Foundation encourage you and your firms to get involved with this year's program. Take a small step -- judging takes less than two hours and is completely virtual -- to make a big impact on a child's life by supporting this financial capability program. Registration is now open; sign up today!
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The empires of the future are the empires of the mind.
Winston Churchill,
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