White House not planning to break up big banks, Mnuchin says | Fed accepting bond market rate projections | Report: ETF/ETP industry larger than hedge funds
May 19, 2017
SIFMA SmartBrief
News on the capital markets
Morning Bell
White House not planning to break up big banks, Mnuchin says
Mnuchin opposes big bank breakup
Mnuchin (Tasos Katopodis/Getty Images)
The Trump administration has no plans to break up big banks, Treasury Secretary Steven Mnuchin told the Senate banking committee Thursday. Breaking up Wall Street's biggest banks would negatively affect liquidity and the economy, he said.
Bloomberg (5/18),  The Wall Street Journal (tiered subscription model) (5/18),  Financial Times (tiered subscription model) (5/18) 
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Industry News
Fed accepting bond market rate projections
Bond traders have benefited from countering the Federal Reserve's optimistic projections, turning the maxim "Don't fight the Fed" on its head. The Fed has capitulated, matching its projections to the market.
Financial Times (tiered subscription model) (5/19) 
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Report: ETF/ETP industry larger than hedge funds
The global exchange-traded fund and exchange-traded product industry outpaced the global hedge fund industry at the end of the first quarter by $847 billion, according to an ETFGI report. The ETF/ETP industry had $3.913 trillion in assets, compared with hedge funds' $3.066 trillion.
Nasdaq (5/18) 
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Bitcoin rises to record close near $1,900
Bitcoin climbed to a record of $1,875.08 Thursday. With the technology supporting bitcoin appearing to become more stable, it is attracting new interest from investors.
CNBC (5/18) 
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Washington Roundup
Lawmakers hear conflicting testimony on fiduciary rule
Critics and supporters of the Labor Department's fiduciary rule stood by their opposing views on the measure during a hearing of a subcommittee of the House Education and Workforce Committee. Bradford Campbell, a partner at Drinker Biddle & Reath, said an Investment Company Institute survey provided evidence of the harm the rule will cause, while Micah Hauptman, financial-services counsel at the Consumer Federation of America, said the institute didn't provide any facts to support its claims.
InvestmentNews (tiered subscription model) (5/18),  ThinkAdvisor (free registration) (5/18) 
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Trump signs repeal of safe harbor for state-run retirement plans
President Donald Trump signed a resolution doing away with the safe harbor the Labor Department enacted to help state governments set up retirement plans for private-sector workers whose employers don't provide them. Some states have said they will go ahead with their plans without the safe harbor.
ThinkAdvisor (free registration) (5/18),  Pensions & Investments (free access for SmartBrief readers) (5/19) 
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Mnuchin expects Fannie, Freddie to keep paying dividends
Treasury Secretary Steven Mnuchin expects Fannie Mae and Freddie Mac to continue making dividend payments to the Treasury Department despite comments from Federal Housing Finance Agency Director Mel Watt that he may suspend them to allow the housing giants to retain enough capital to operate safely. The firm's zero-capital targets were intended to force Congress to take action on housing reform.
MarketWatch (5/18) 
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Q&A: Reviewing the Volcker rule
While the repeal or replacement of the Volcker rule could take years, the review ordered by Treasury Secretary Steven Mnuchin could lead regulators to better define the types of trading banned by the rule, giving banks more leeway to trade within its bounds. The Federal Reserve, Securities and Exchange Commission, Federal Deposit Insurance Corp., Commodity Futures Trading Commission and the Office of the Comptroller of the Currency were tasked with reviewing the rule.
Bloomberg (5/18) 
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Operations Update
Fintech firm calls on SEC to clarify blockchain rules
Fintech firm Ouisa has requested that the Securities and Exchange Commission provide guidance and rulings on blockchain and other digital assets. Currently, the SEC evaluates such assets the same way it does their traditional counterparts, but Ouisa, which uses blockchain for its ATS trading system, asserts that it is time for it to be assessed and regulated separately.
The Trade (UK) (5/18) 
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Early Bird Ends Today! SIFMA C&L St. Louis Regional Seminar, June 20
This one-day seminar, to be held on June 20 at the Edward Jones Conference Center in St. Louis, will feature presentations by leading securities regulators and industry professionals. Discussion topics include: Regulatory Update, Litigation, DOL Fiduciary Rule, Cybersecurity, Analytics Shaping your Compliance Programs and more. Register before early bird rates end at midnight on May 19.
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Now available: SIFMA's Research Quarterly, 1Q 2017
Total long-term securities issuance was $1.85 trillion in 1Q'17, a 15.5% decrease from $1.60 trillion in 4Q'16 but an 11.3% increase year-over-year. Treasury, corporate, agency and equity securities experienced increases q-o-q in the first quarter, while municipal, mortgage-related, and asset-backed securities experienced declines. SIFMA's Research Quarterly is a flagship report containing brief commentary and statistics on the US capital markets, including issuance, trading volume and outstanding data broken down by asset class.
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