Winner of InvestWrite contest explains why she chose Honda | ILS growth could mean shift from complement to competition | Consolidated audit trail may be at least 4 years away
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March 18, 2013
SIFMA SmartBrief
News on the capital markets, securities and financial industry

Morning Bell
SEC is months away from finalizing MA definition, official says
John Cross, head of the Securities and Exchange Commission's Office of Municipal Securities, said that while the SEC is prepared to ramp up enforcement of rules governing municipal bonds, the agency is still working on finalizing its municipal advisor definition, which could take "several months." The SEC has received more than 1,000 comment letters about the definition, Cross said. The Bond Buyer (special access for readers of SIFMA SmartBrief) (3/15)
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Video View
Winner of InvestWrite contest explains why she chose Honda
Source: CNBC
Fifth-grader Rachel Kelly was recently told live on CNBC's "Squawk on the Street" that she had won the SIFMA Foundation's InvestWrite challenge. Kelly chose to write about Honda Motor. "Honda is a good investment. The stock price has risen over the past 25 years and it is a diversified company," Kelly wrote. "InvestWrite and the Stock Market Game program require students like Rachel to monitor daily global market activity, business trends, and economic factors that drive investments to determine the growth potential of industries, companies, asset classes, and specific stocks, bonds, and mutual funds," said Melanie Mortimer, SIFMA Foundation's executive director. Read SIFMA's news release about Kelly placing first in the InvestWrite challenge. CNBC (3/15)
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Industry News
ILS growth could mean shift from complement to competition
The growth of insurance-linked securities from a niche market to one that may compete with traditional coverage was a central topic at SIFMA's recent Insurance- and Risk-Linked Securities Conference. The issues of catastrophe bond pricing, and whether the market will remain as crowded after a catastrophe occurs, were frequently discussed topics, one conference attendee said. Check out highlights from SIFMA's IRLS Conference. Artemis (3/15)
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Consolidated audit trail may be at least 4 years away
A gathering of potential bidders to develop a consolidated audit trail targeted 2017 as the likely date for a system to be released to broker-dealers. An industry working group creating a plan for the CAT originally sought to file the plan in April but has delayed that to December. Securities Technology Monitor (3/15)
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Commentary: State tax changes will affect muni-bond returns
Columnist Jack Hough writes that investors must be aware that possible state tax code changes will affect returns on municipal bonds. As proposals to cut or eliminate income taxes progress, the tax benefits of owning in-state municipal bonds will change, affecting returns, Hough writes. Barron's (special access for readers of SIFMA SmartBrief) (3/16)
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Washington Roundup
Senate probe could help SEC make case against JPMorgan
The Senate's investigation into derivatives losses by JPMorgan Chase resulted in more than 900 pages of evidence that the Securities and Exchange Commission could use if it decides to open its own investigation into the bank. The SEC's line of inquiry would likely follow whether JPMorgan adequately disclosed losses on its derivatives positions to investors, former SEC enforcement attorney Jacob Frenkel says. Bloomberg (3/16)
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Analysis: White would face big challenges at SEC
Mary Jo White, President Barack Obama's nominee to lead the Securities and Exchange Commission, was vague on many issues in her confirmation hearing, but at least she was clear on the importance of implementing the Dodd-Frank Act in a timely manner, according to The Economist. "Many of the rule-writing jobs dumped in the lap of agencies are on issues that were too complex for Congress to resolve, from the operations of credit-rating agencies to the definition of proprietary trading," the magazine notes. "Ms White's SEC career will only get tougher from here." The Economist (tiered subscription model) (3/16)
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Analysis: New year brings new dynamics to oversight discussions
In 2012, the House Financial Services Committee considered two regulatory bills, one that would have created a self-regulatory organization for advisers, and another that would have permitted the Securities and Exchange Commission to fund adviser exams with user fees. Only the second bill remains this year, which may prompt the Financial Industry Regulatory Authority, the biggest proponent of the SRO bill, to switch its support. InvestmentNews (free registration)/Washington Insider blog (3/15)
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Asset/Wealth Management Report
Young advisers want to work with people, survey finds
Financial-services firms that want to hire young advisers should offer them a role in relationship management, according to a survey by Schwab Advisor Services. Students studying financial planning want to work with people when they enter the workforce, the survey found. Only 27% of respondents would consider working on product delivery or development. AdvisorOne (3/15)
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SEC issues social media guidelines
The Securities and Exchange Commission has told fund companies that most social media activity does not need to be reviewed by the Financial Industry Regulatory Authority. Fund companies only need to submit posts that either make specific performance claims or that advertise the merits of a fund. Reuters (3/15)
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Hot Topics
SIFMA Events -- LEI, IT Training & the Clearing Transition -- check them out!
SIFMA's calendar of upcoming events has something targeted to nearly every financial services professional. This week's highlights include: Wednesday, SIFMA's Internal Auditors Society IT Training Seminar, where participants will get the latest IT solutions and can receive 7.5 CPE Credits, and Thursday, SIFMA's global affiliate, GFMA, hosts a Webinar: Global LEI Developments and Deadlines, to help your firm prepare for LEI implementation. In April, SIFMA's Asset Management Group (AMG) will host Putting the Clear in Central Clearing: An Overview of Transition Clearing for Asset Managers, an in-depth discussion designed specifically for the buy-side.
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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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What men value in this world is not rights but privileges."
-- H.L. Mencken,
American journalist and essayist
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