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05 December 2012
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News on the global financial markets

  Morning Bell 
  Industry News 
  • "Fiscal cliff" concerns ease among global investors
    Optimism that US budget debate will eventually lead to avoidance of the "fiscal cliff" prompted investors to increase equity overweight positions to a 20-month high in November in Europe and the US, according to a Reuters poll. "All eyes are now on the fiscal cliff, where a muddling-through until the end of [the first quarter] can be expected," said Boris Willems, a strategist at UBS Global Asset Management. Reuters (04 Dec.) LinkedInFacebookTwitterEmail this Story
  • Commentary: Clarity is needed in bank-slimming efforts
    Myriad moves are afoot on both sides of the Atlantic Ocean to slim down banks, raising many questions, columnist Francesco Guerrera writes. "Trying to determine the optimal model for banks, or indeed any company, by regulatory fiat seems like a flawed idea," he notes. "But doing it in such a cacophonous way is even worse." The Wall Street Journal (03 Dec.) LinkedInFacebookTwitterEmail this Story
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  Regulatory Roundup 
  • EU transaction tax moves forward without UK input
    The EU is proceeding with plans for a financial-transaction tax despite objections from the UK, which wants wording changes to the proposal. The European Parliament and all EU nations must approve the measure before 11 interested countries can proceed. Bloomberg (03 Dec.) LinkedInFacebookTwitterEmail this Story
  • Global regulators vow to fix derivative-rule problems
    Regulators worldwide recently met in New York and identified potential problems with derivatives rules that they agreed to implement after the financial crisis. "We have identified various potential conflicts, inconsistencies, and duplicative requirements within our respective contemplated rules and we will continue to discuss measures to ameliorate the challenges they raise," the regulators said in the joint statement. For example, the regulators will strive to minimise issues arising from extraterritoriality. Jones Newswires (04 Dec.), Reuters (04 Dec.) LinkedInFacebookTwitterEmail this Story
  • ESMA's Ross calls for buy-side input on rules
    The buy side should make itself heard more in regulation of collateral management and automated trading, said Verena Ross, executive director of the European Securities and Markets Authority. "The buy side has historically only posted collateral, but under the new [over-the-counter] derivatives rules, ESMA is supportive of a two-way system, where collateral moves both ways," she said. Ross also says European market participants likely won't face mandatory derivatives clearing before mid-2014. Her comments signal further delay to the global timetable for derivatives reform. The Trade News (U.K.) (04 Dec.), Financial Times (tiered subscription model) (04 Dec.) LinkedInFacebookTwitterEmail this Story
  • Long-term risk should factor into bankers' pay, BoE says
    Bankers' compensation should reflect risk that might ensue from actions years later, such as if a bank fails, the Bank of England says. "Steps could be taken to ensure that contracts provided sufficient incentives for executives to consider the full implications for long-term business performance," the central bank's Financial Policy Committee says. Reuters (04 Dec.), The Wall Street Journal (04 Dec.) LinkedInFacebookTwitterEmail this Story
  • UK reports of suspicious trades surge from 2009 levels
    The UK Financial Services Authority says it is on track to have 900 reports of suspicious trading in 2012, triple the number from 2009. However, the regulator doesn't see such data as evidence that market abuse is rampant. "Rather, we think our messaging around the requirement for and importance of market participants submitting [suspicious-trade reports] is hitting home," said Jamie Symington, head of wholesale enforcement. Bloomberg (04 Dec.) LinkedInFacebookTwitterEmail this Story
  Tech Trends 
  • Kill switch becomes available to all BATS Chi-X Europe traders
    All customers of BATS Chi-X Europe have gained the ability to cancel trades in case there is a software blip or a market crash, the company said in an e-mail. Previously, access to the so-called kill switch was available only to the largest clients. Recent market glitches have pressured exchanges to make such changes. Bloomberg (04 Dec.) LinkedInFacebookTwitterEmail this Story
  Spotlight on China 
  • HKMA discusses possible charge for trade reporting
    Participants in the over-the-counter derivatives market might face a charge to use the Hong Kong Monetary Authority's trade-reporting service once it's operational. Discussions with market players are under way and are expected to continue for several months. However, Esmond Lee, executive director for financial infrastructure, says "the HKMA has not yet decided whether to charge and, if so, the level of charges". (subscription required) (04 Dec.) LinkedInFacebookTwitterEmail this Story
  GFMA News 
  • IOSCO Secretary General David Wright will speak at GFMA/SIFMA LEI Seminar -- TUESDAY in New York City
    GFMA and SIFMA are partnering to present "Implementing a Global LEI Framework -- Ready. Set. Go." International Organisation of Securities Commissions Secretary General David Wright will provide the keynote address. Join Wright, US Treasury Department representatives and financial-services leaders as they address key issues that will influence and shape the future of a global standard for legal-entity identification and the impact such regulations and processes will have on your firms starting this month. Don't miss your chance to prepare. Register! LinkedInFacebookTwitterEmail this Story
The forceps of our minds are clumsy things and crush the truth a little in the course of taking hold of it."
--HG Wells,
British author

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