Morning Bell

• FDIC's Hoenig voices concern about Basel III
  Federal Deposit Insurance Corp. Director Thomas Hoenig said financial rules that failed in 2008 are still in effect but are more complicated. He was referring specifically to Basel III. "It turns out that the Basel capital rules protected no one: not the banks, not the public. ... I find a good deal of uneasiness about Basel III's ability to be more effective than previous Basel efforts; however, there is a sense that we cannot go back," Hoenig said. Reuters (9/15), The Wall Street Journal (9/14)     

Industry News

• Analysis: Private banks warm to "open architecture"
  Private bankers have traditionally done it all, but it appears that a shift is taking place. Private banks are increasingly offering their clients products from outside managers as they embrace the idea of "open architecture." Sophisticated investors are driving the shift as they demand niche global investments and insist on having the top managers. Barron's (special access for readers of SIFMA SmartBrief) (9/15)     

• Issuance surges in structured-credit market
  More than $15 billion in structured-credit deals were priced or announced last week, and more issues are on tap for this week. "We've seen an extraordinary amount of issuance compressed into a very short time span, no doubt encouraged by high investor receptivity to structured product given expectations of low base rates and volatility," said Christopher Sullivan, chief investment officer at the United Nations Federal Credit Union. "The demand for spread has risk assets very much the focus, especially in this new and now newly extended era of financial repression." International Financing Review (free content) (9/15)     

• Other News

• Lehman brokerage faces creditors' calls to pay up
  Bloomberg (9/15)     

Washington Roundup

• Sen. Corker calls on SEC to continue reform of money market funds
  Sen. Bob Corker, R-Tenn., said the Securities and Exchange Commission needs to continue working on an overhaul of rules governing money market funds. "An optimal solution will be found if the SEC Commissioners and industry work together to find an appropriate structure that minimizes the risk of a wholesale run," Corker wrote to Mary Schapiro, chairman of the SEC. "Whatever the solution, reforms are now are better than a taxpayer bailout down the road. Inaction is not an option." The Hill/On the Money blog (9/14)     

• Authorities aim to finalize Volcker rule by year's end, FDIC head says
  Martin Gruenberg, acting chairman of the Federal Deposit Insurance Corp., said regulatory authorities are planning to approve a final draft of the Volcker rule by the end of the year. "The agencies are working on it. I think that is the intention," Gruenberg said. Meanwhile, Bart Chilton of the Commodity Futures Trading Commission is urging regulators to ensure that the hedging exemption to the Volcker rule is narrow. "A too-expansive definition will significantly undercut the fundamental purposes of the rule," Chilton said. Learn more at SIFMA's Volcker Rule Resource Center. Reuters (9/14), Bloomberg (9/14)     

• Regulators will strive for simplicity, Treasury official says
  Mary Miller, a top official at the Treasury Department for domestic finance, said the Volcker rule and other regulatory changes needs to be simple. "We will strive for simplicity with Volcker and the other reforms we are implementing," Miller said. "We understand its value. At the same time, we are mindful of the need to have smart rules that are responsive to the unique needs of our financial system and promote economic growth." Bloomberg (9/14)     

• SEC targets technology of securities markets
  In the wake of high-profile trading glitches, the Securities and Exchange Commission aims to ensure regulated securities markets have adequate technology. David Shillman of the SEC said a planned rule to govern such technology could reach large brokers and dark pools. Minimum standards pertain to exchanges and clearinghouses, but they "could be applied to other market participants," Shillman said. Join your peers to hear the issues facing the U.S. securities markets at SIFMA's Market Structure Conference, Oct. 4 in NYC. Bloomberg (9/14)     

• SEC fines NYSE $5M for giving some clients preferential data access
  NYSE Euronext agreed to pay $5 million to settle an allegation by the Securities and Exchange Commission that the New York Stock Exchange gave select clients market data before they were available to retail investors. The regulator said such improper action began in 2008. The New York Times (tiered subscription model)/DealBook blog (9/14), The Wall Street Journal (9/16)     

• IOSCO launches task force to examine Libor
  Martin Wheatley, managing director of the U.K. Financial Services Authority, and Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, have been tapped to oversee a task force set up by the International Organization of Securities Commissions to investigate the London Interbank Offered Rate and other rate benchmarks. "IOSCO is committed to taking necessary steps to prevent the manipulation of benchmarks and restore confidence in the use of those benchmarks in global financial markets," the group said. Bloomberg (9/14), Reuters (9/14)     

Asset/Wealth Management Report

• Study: Financial advisers should look beyond fund performance
  Financial advisers who give undivided attention to investment strategies and fund performance keep clients from the true source of wealth, according a study by the Putnam Institute. Increasing clients' savings rate, rather than fund performance, has a much bigger impact on wealth accumulation, the study found. Reuters (9/13)     

Hot Topics

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

• Regulators will look into non-bank financial firms, sources say (Bloomberg)

• Single fiduciary standard fails to make SEC priority list (Bloomberg)

• Dimon discusses Europe, Volcker rule, JPMorgan's shake-up (The New York Times (tiered subscription model))

• Bankers and lawmakers continue to question Volcker rule (Compliance Week)

• Investment banking is changing as officials consider new measures (The Economist)

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

SIFMA's Complex Products Forum - Growth, Innovation, Regulation, is a full-day program that will address many topics such as regulatory oversight and guidance, compliance practices, sales to retail investors, and much more. Join us September 27, 2012 in New York City. Learn more.

Editor's Note

• Updated SmartBrief privacy policy
  SmartBrief has updated its privacy policy to better reflect the state of the digital world. View the updated policy.     

SIFMA News

• Greenspan, Schapiro, Siegel, Gensler to speak at SIFMA Annual Meeting -- Oct. 23 -- NYC
  Don't miss this exclusive SIFMA appearance by former Federal Reserve Chairman Dr. Alan Greenspan at SIFMA's 2012 Annual Meeting, Oct. 23 in New York City. Dr. Greenspan will provide insight on the current state of the economy, the global markets, the impact of the election and the future of our economy. Just weeks before the election, SIFMA's Annual Meeting features an array of senior-level policy officials, regulators and industry leaders who will examine the impact of the political and economic climate looking ahead to 2013 and beyond. Greenspan joins fellow featured speakers Mary Schapiro (Chairman, SEC); Gary Gensler (Chairman, CFTC); Thomas A. James (Executive Chairman, Raymond James Financial); Dr. Jeremy Siegel (Russell E. Palmer Professor of Finance, The Wharton School of the University of Pennsylvania); Douglas M. Hodge (Chief Operating Officer, PIMCO); and many more.     

• Sign-up now: Industry-Wide Business Continuity Test -- Oct. 27
  As part of the ongoing financial industry backup-site testing initiative that began in 2003, SIFMA leads an annual industry-wide business continuity test every October. Registration is open for the Oct. 27 test. This is a critical exercise that highlights our industry's ability to operate through a significant emergency using backup sites, recovery facilities and backup communications capabilities across the industry. SIFMA encourages all firms to participate in the critical industry-wide business continuity test every October.     

• SIFMA Research: Leading reports on the financial industry and markets

• Come and meet the issuers at SIFMA's Municipal Bond Summit -- Oct. 1 -- NYC

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