If attractive target materialized, CME might buy it, CFO says | Trading could be an addictive behavior, expert says | Obama gathers CEOs to discuss cybersecurity concerns
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March 14, 2013
SIFMA SmartBrief Operations & Technology
News for operations and technology executives in financial services

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SEC proposes rules aimed at trading platforms
The Securities and Exchange Commission has been working for more than a year on rules intended to ensure trading platforms are better prepared to handle technology glitches, hurricanes and other issues that might cause market disruptions. The SEC has proposed rules that would require certain exchanges, clearing agencies and alternative trading systems to develop procedures to ensure security, resilience, integrity and capacity. Reuters (3/7), The Wall Street Journal (3/7)
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The Business Case for Complying with Dodd-Frank
Approached proactively, the quest to comply with Dodd-Frank can help firms achieve better response and business efficiency, improve customer service and grow organically. Don't stand around and wait for regulators to give direct guidance - step up your enterprise architecture now to better support customer interactions.
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If attractive target materialized, CME might buy it, CFO says
CME Group's chief financial officer, James Parisi, said the exchange would be willing to make a sizable acquisition if the right target emerged, the latest sign that the company may reverse its longstanding lack of interest in a merger. "If a great opportunity were to arise where we can create shareholder value through some type of M&A opportunity, we will certainty take a look at it," Parisi said. Reuters (3/6)
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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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How to Motivate Employees
Learn which employee incentives work best from research from Kellogg School of Management faculty. Learn more.
Technology Update
Obama gathers CEOs to discuss cybersecurity concerns
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JPMorgan Chase CEO Jamie Dimon and Bank of America CEO Brian T. Moynihan were among corporate leaders who met with President Barack Obama to discuss issues related to cybersecurity. The meeting was part of the administration's efforts to raise alarms about threats posed by hackers. Dimon said the meeting was "very helpful, productive." Bloomberg (3/13)
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Cyberattacks on banks concern intelligence chief
The growth in cyberattacks on U.S. banks and infrastructure is of increasing concern to federal intelligence agencies. Testifying before the Senate intelligence committee, officials told lawmakers that the U.S. is vulnerable to cyberattacks from governments, hackers and terrorists. "It's hard to overemphasize its significance," said Director of National Intelligence James Clapper. Register and get the latest strategies for your firm at SIFMA's 40th Operations Conference & Exhibit, April 28-May 1 in Boca Raton, Fla. The Wall Street Journal (3/13)
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Eurex signs long-term technology deal with BSE
The Bombay Stock Exchange launched a long-term arrangement with the Eurex Group, which runs the Deutsche Börse, to phase out its trading technology architecture and replace it with the German stock exchange's architecture. BSE's derivatives business will be the first portion of the exchange's operations to use the new technology. Business Standard (India) (3/12)
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Using tablets to brief boards saves time and money
Shifting preparation of information for corporate board meetings from paper documents and binders to tablets offers the opportunity for substantial improvements in efficiency, including saved time and money. Technology allows staff members to give board members extra information or answers to questions using the electronic equivalent of sticky Post-it notes. Securities Technology Monitor (3/11)
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Regulatory and Legislative Update
Clearinghouse requirement for swaps starts in Europe and U.S.
Big users of swaps now have to process transactions through a clearinghouse, a major step in derivatives regulation that Group of 20 nations agreed upon in 2010. Financial Times (tiered subscription model) (3/10)
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SEC faces challenges in HFT investigation
The Securities and Exchange Commission is facing significant challenges in its probe into high-frequency trading, partially because of the rapid nature of the strategy. Financial Times (tiered subscription model) (3/10)
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White emphasizes need to understand HFT
In testimony prepared for her confirmation hearing, Mary Jo White highlights a need to better understand high-frequency trading. "There must be a sense of urgency brought to addressing these issues to understand their impact on investors and the quality of our markets so that the appropriate regulatory responses can be made," White says in reference to HFT. She also says an aggressive enforcement policy "is not only the right thing to do, but it also will serve to deter the sharp and unlawful practices of others." Bloomberg (3/11), Reuters (3/11), The Washington Post (3/11)
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Banks must improve FX risk management, New York Fed says
Jeanmarie Davis, head of financial market infrastructure at the Federal Reserve Bank of New York, said that banks need to improve their risk management of foreign exchange trading. "We will monitor the progress of implementation of the guidance and we want to see an improvement in the industry's ability to identify, measure and monitor the duration of the risks, and then take steps to eliminate or mitigate the risk," Davis says. Risk.net (subscription required) (3/11)
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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
On March 7, the CFTC released important guidance on the maintenance of CICIs issued through assisted registration, including that Self-registration (Primary Party Registration) includes Assisted Registration. In addition, the CFTC document reiterates that its rules require an entity subject to CFTC jurisdiction to both (1) certify its own CICI if the CICI was not obtained through self-registration, and (2) maintain its own CICI after it is issued, including re-certification at appropriate intervals. Download the CICI Utility Guidance on Registration and Certification now.
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People may say I can't sing, but no one can ever say I didn't sing."
-- Florence Foster Jenkins,
American amateur operatic soprano
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