Morning Bell

• Bond funds' increased popularity may be ending
  Despite warnings about the lack of profitability, investors have been pouring money into bond funds for the past two years. January broke a string of 20 straight months of equity withdrawals leading to cautious optimism. However, analysts say you can't read too much into one month. "In order to make any kind of definitive statement about whether people are rotating back into equities, we need to see this pattern for a good five or six months," said Shelly Antoniewicz of the Investment Company Institute. Barron's (special access for SmartBrief readers) (2/11)     

Industry News

• SEC-Citi settlement case goes before appeals court
  A push by the Securities and Exchange Commission and Citigroup for reinstatement of a mortgage-bond settlement that was rejected by a federal judge in 2011 went before an appeals court last week, with hints from judges toward calling for a new settlement. The original case relates to Citi allegedly not revealing conflicts of interest while selling a mortgage-bond product. Reuters (2/8), The Wall Street Journal/Law Blog (2/8)     

• Barclays CEO commentary: A path to move forward
  Barclays is ready to put the past behind it and embark on a new chapter, CEO Antony Jenkins writes, noting that on Tuesday he will release a business plan intended to ensure Barclays continues to profit and lives up to its high standards. The Telegraph (London) (tiered subscription model) (2/9), The Wall Street Journal (2/10)     

• G-20 is expected to focus on positive economic signs
  Leaders from the Group of 20 nations are set to meet Friday in Moscow, and analysts think that with enough positive signs in the world economy, the talks will be upbeat and forward focused. "On the whole, recent activity data have been encouraging of our view that the global economy is improving, albeit slowly," said Simon Hayes, a Barclays Capital economist. Even Japan has curbed currency-war fears in recent days, with Finance Minister Taro Aso suggesting that the yen's weakening has been too drastic. Reuters (2/10)     

• Commentary: Market-making competition is needed
  Potamus Trading CEO Eric Pritchett writes that the consolidation of market-making power is unhealthy. Increased competition would add stability and market trust, he writes. Financial Times (tiered subscription model) (2/8)     

Washington Roundup

• SEC ties to private sector are problematic, report says
  A Project on Government Oversight report notes a "revolving door" between the Securities and Exchange Commission and entities it oversees. "The close linkage between the regulators and the regulated can influence the culture, the values, and the mindset of the agency," the report says. Reuters (2/11), The New York Times (tiered subscription model)/DealBook blog (2/11)     

• SEC nominee says she would avoid cases of old firm, old clients
  Mary Jo White, the nominee to lead the Securities and Exchange Commission, has promised to avoid participation in any cases involving her law firm, Debevoise & Plimpton, or any former clients, for a year. Her husband will convert his stake in the law firm of Cravath, Swaine & Moore into a salary to avoid possible conflicts of interest. Reuters (2/8), Bloomberg (2/8), The Washington Post/The Associated Press (2/8)     

• EBSA: Swaps trading by pension funds won't trigger fiduciary duty
  The Employee Benefits Security Administration released an opinion last week that eased the concerns of pension-plan sponsors whose brokers were hesitant to execute swaps. The brokers were worried that they would be held to a fiduciary standard, but the EBSA opinion said "[i]t does not appear that Congress contemplated that (clearing members) would act as ERISA fiduciaries with respect to plan customers. The swaps regulations ... similarly do not envision" such a requirement. Registration is now open for SIFMA's Private Client Conference on April 25 in Chicago. Pensions & Investments (free registration) (2/8)     

• Basel III could be delayed in U.S. by impact study
  A possible Senate bill would require a quantitative-impact study before the U.S. implements rules by the Basel Committee on Banking Supervision. Although an actual congressional vote could be difficult to achieve, analysts say legislative pressure on regulators might be enough to dissuade them from Basel III adoption indefinitely. Learn more at SIFMA's Basel III Resource Center. Risk.net (subscription required) (2/8)     

• Commentary: Large ratings agencies remain entrenched
  Many financial-market observers are probably taking a better-late-than-never attitude toward the Justice Department's lawsuit against Standard & Poor's over its ratings leading up to the global financial crisis, Gretchen Morgenson writes. "Given that the financial crisis began unfolding more than five years ago, it is discouraging to see how entrenched the large and established ratings companies remain," Morgenson writes. The New York Times (tiered subscription model) (2/9)     

• Bill would extend BAB program at lowest subsidy rate yet
  The Bond Buyer (free content) (2/8)     

Hot Topics

Top five news stories selected by SIFMA SmartBrief readers in the past week.

• U.S. sues S&P and McGraw-Hill over mortgage-bond ratings (Bloomberg)

• Volcker rule forces banks to change private-equity business (The Wall Street Journal)

• Decades of low returns await investors, report says (Pensions & Investments (free registration))

• BAB payments may face higher cuts from sequestration (The Bond Buyer (free content))

• FINRA delays start of price bands and circuit breakers (Traders Magazine Online)

• Results based on number of times each story was clicked by readers.

SIFMA News

• Latest SIFMA Research: U.S. Securities Industry Employment & U.S. Municipal Credit Report
  SIFMA Research released the U.S. Securities Industry Employment, 2012 Q4, a report with trends of industry employment, with a greater focus on New York state and New York City giving a perspective using quarter-over-quarter and year-over-year data. Also, SIFMA Research released the U.S. Municipal Credit Report, 2012 Q4 and Full Year, a quarterly report on the trends and statistics of the U.S. municipal bond market, both taxable and tax-exempt. Issuance volumes, outstanding, credit spreads, highlights and commentary are included. SIFMA Research reports include regular outlooks and forecasts, research quarterlies, and essential industry factbooks and yearbooks.     

• Early-bird rates available: SIFMA Tech 2013 -- June 18-19 -- NYC
  For 30 years, SIFMA Tech has brought together several thousand financial services firms, industry leaders, regulators and solution providers for critical updates and expert outlooks on every issue that faces the financial services technologist today. Harness technological solutions to achieve an infrastructure that keeps you and your firm on the cutting-edge and see how products from solution providers stack up against your in-house expertise. Check out the new, official SIFMA Tech website for details on this year's offering and take advantage of early-bird rates.     

• Program available -- SIFMA Ops: Marking 40 Years of Progress -- April 28-May 1 -- Boca Raton, Fla.

• Check out SIFMA's white paper on the role of municipal securities broker's brokers

SmartQuote

The only man I know who behaves sensibly is my tailor; he takes my measurements anew each time he sees me. ... The rest go on with their old measurements and expect me to fit them." --George Bernard Shaw, Irish playwright