DTCC seeks to accelerate end of paper stock certificates | ICE discusses NYSE deal with European national regulators | Nasdaq to convert PSX into an ETF exchange
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March 13, 2013
SIFMA SmartBrief
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Regulator will consider simplifying Basel III
Criticism that Basel III rules, which require banks to hold more capital against possible losses, are too complex is prompting the Basel Committee on Banking Supervision to re-examine the rules. "A vigorous public debate has developed recently as to whether the Basel regulatory framework strikes an appropriate balance among different desirable characteristics: simplicity, comparability and risk sensitivity," Chairman Stefan Ingves said. Reuters (3/12), Bloomberg (3/12), The Wall Street Journal/Dow Jones Newswires (3/12)
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Webinar—The Time is Now: Mobilizing for Fixed Income & Options Reporting Requirements
Wed Mar 20, 2013 @ 4PM EDT—Join Deanna Flores of KPMG and Artie Wolk of SunGardWall Street Concepts for an interactive webinar hosted by Scivantage. This complimentary, one-hour session will offer critical insight into how to best prepare for the final Fixed Income and Options cost basis reporting requirements to ensure your firm is fully mobilized for a successful 2014 tax season. Register Now!
Industry News
DTCC seeks to accelerate end of paper stock certificates
Depository Trust & Clearing is striving to accelerate efforts to remove older paper stock certificates from circulation and end the issuance of new ones. "It's a much more costly and risk-prone way of holding assets," said Dan Thieke, managing director in asset services at DTCC. "Those assets can be destroyed. They can be lost. When they're lost, they need to be replaced, and there's costs associated with that." DTCC CEO Michael Bodson will be one of the featured speakers at SIFMA's 40th Operations Conference & Exhibit, April 28-May 1, in Boca Raton, Fla. Register today. The Wall Street Journal (3/12)
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ICE discusses NYSE deal with European national regulators
IntercontinentalExchange CEO Jeffrey Sprecher says the company is concentrating on European national regulators in discussions to acquire NYSE Euronext and has yet to apply for EU approval. Sprecher is confident about the talks and says they should be "coming quickly to a conclusion." He also calls for more consolidation among European exchanges. Bloomberg (3/12), Financial Times (tiered subscription model) (3/13), The Wall Street Journal (3/12)
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Nasdaq to convert PSX into an ETF exchange
PSX, the smallest of Nasdaq OMX Group's trading platforms, will be converted into a venue focused on exchange-traded products, a rapidly growing sector. Pending Securities and Exchange Commission approval, Nasdaq reportedly plans to start the changes during the second quarter. The Wall Street Journal/Dow Jones Newswires (3/12)
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Trading could be an addictive behavior, expert says
At an industry conference, John Coates, a senior research fellow in neuroscience and finance at the University of Cambridge, discussed the role biology plays in trading and risk taking. "Something happens to traders when they are on a winning streak that transforms them from something tame to something a lot more dangerous," Coates said. SmartBrief/SmartBlog on Finance (3/12)
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Washington Roundup
White tells lawmakers SEC should set money fund rules
Mary Jo White, President Barack Obama's nominee to lead the Securities and Exchange Commission, told the Senate banking committee that rules for money market funds should be written by the SEC instead of the new risk council. "It is an investment product. It is where the SEC has expertise and I think they should take the lead," White said. Concerns about White's ability to effectively oversee Wall Street seemed minimal with no senators voicing opposition to White's confirmation. Learn more at SIFMA's Money Market Reform Resource Center. Reuters (3/12), The Washington Post (3/12), The New York Times (tiered subscription model)/DealBook blog (3/12), The Wall Street Journal (3/12)
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Study finds improved economic analysis from SEC
The Securities and Exchange Commission's increased efforts to understand the economic effects of its regulations are paying dividends, according to a study commissioned by the U.S. Chamber of Commerce. The emphasis on relying on economists has made the SEC a model for other agencies, such as the Commodity Futures Trading Commission and Consumer Financial Protection Bureau, the report said. "The SEC's course of action is one that other financial regulators -- such as the CFTC, the CFPB, and the federal banking agencies -- can learn from and should follow," the study said. Reuters (3/12)
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SEC experiments with more specific penalties
The Securities and Exchange Commission may use more customized punishments when penalizing rule breakers, instead of its typical broad prohibitions. "We want to use all of the tools available to us to specifically discourage repeat misconduct and go beyond the injunctions we traditionally obtain," said George Canellos, the SEC's acting head of enforcement. Reuters (3/12)
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Asset/Wealth Management Report
Advisers added assets and revenue in 2012, report says
Assets under management by financial advisers increased 9% last year, and average revenue per adviser rose 2%, according to a report by PriceMetrix. The average number of households served declined by 4%, but the average asset total at those households climbed 13%, according to the report. InvestmentNews (free registration) (3/12)
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New SIFMA White Paper: "The Evolving Role of Compliance"
SIFMA's latest white paper -- "The Evolving Role of Compliance" -- examines the responsibilities, opportunities and limitations of the Compliance function in the evolving financial industry. The financial crisis, globalization, the use of new technologies, and new, complex and expanded regulatory requirements have significantly altered securities firms and the operations of their Compliance functions. This change has led to an enhanced role for Compliance, but it has also created the risk of blurring the line between Compliance and business supervision. "The Evolving Role of Compliance" offers recommendations to assist senior management, regulators and compliance personnel in defining the appropriate role of Compliance in an increasingly complex and variable environment. This white paper is a collaborative effort between SIFMA, the SIFMA Compliance & Legal Society, and the SIFMA Compliance and Regulatory Policy Committee.
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CFTC provides operational guidance concerning maintenance of CICIs issued through assisted registration
The Commodity Futures Trading Commission has released important guidance on the maintenance of CFTC Interim Compliant Identifiers issued through assisted registration, including that self-registration (primary party registration) includes assisted registration. In addition, the document reiterates that rules require an entity subject to CFTC jurisdiction to:
  1. Certify its CICI if the identifier was not obtained through self-registration.
  2. Maintain its CICI after the identifier is issued, including recertification at appropriate intervals.
Download the CICI Utility Guidance on Registration and Certification.
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Humor is an affirmation of dignity, a declaration of man's superiority to all that befalls him."
-- Romain Gary,
French diplomat, novelist, film director and aviator
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