January 25, 2022
SmartBrief on Risk and Compliance
Managing Risk in Today's MarketsSIGN UP ⋅   SHARE
Top Stories
The Securities and Exchange Commission is exploring expansion of cybersecurity rules to include third-party service providers, such as market makers and brokerages not registered with the SEC, Chair Gary Gensler said. Heightened supervision in these areas "could help ensure important investor protections are not lost and key services are not disrupted as financial-sector registrants increasingly rely on outsourced services," Gensler said.
Full Story: Reuters (1/24),  The Wall Street Journal (1/24),  BNN Bloomberg (Canada) (1/24) 
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The Biden administration is working on an executive order that sets out a strategy for dealing with digital assets, with a goal of presenting the order to the president in coming weeks, sources say. The order reportedly requires regulators to examine aspects of digital assets and their systemic impact.
Full Story: BNN Bloomberg (Canada) (1/21),  CoinDesk (UK) (1/24) 
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9 Key Real Estate Trends for 2022
PGIM Real Estate's new report outlines the top occupier and investment trends set to shape the investment outlook in 2022 and beyond. Explore 9 major insights that span the global real estate landscape in our report and watch the webinar. Go now.
Bloomberg Insights
The volume of US credit derivatives shot up Monday, sending the cost of insuring the debt against default up 2.4 basis points to 60.85, a level not seen since November 2020. Data indicates that the CDX High Yield index price fell 0.56 cents to 106.72 as the market anticipates a Fed interest rate increase in March.
Full Story: BNN Bloomberg (Canada) (1/24) 
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In a move that caught the markets by surprise, the Monetary Authority of Singapore tightened its monetary policy to blunt inflationary pressures. The action came one day after new data showed that Singapore's inflation rate surged in December at the fastest pace in almost eight years.
Full Story: Bloomberg (1/24) 
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Monitoring the Crypto Market
As the cryptocurrency market goes mainstream, proper surveillance tools and a robust risk management system are needed to mitigate against market abuses inherent in the financial system. Check out this Executive Summary to learn how the crypto market is driving innovative surveillance. Read more
Trading Trends
The Bloomberg US Corporate High Yield Bond Index is down 1.23% so far in 2022 as BB-rated bonds have fallen by 1.7%. This is the poorest performance for January in the past six years.
Full Story: Bloomberg (1/19) 
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Issuance of collateralized loan obligations in the US and Europe climbed to record levels last year, and credit quality improved, according to Fitch Ratings. The ratings agency has given CLOs a neutral performance outlook, based on portfolio credit quality and a favorable market environment.
Full Story: Fitch Ratings (1/24) 
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Traders are holding onto call options for oil, with hedge funds and other waiting for oil prices to rise and the option fall below market price. Brent crude hit a seven-year high last week.
Full Story: Bloomberg Professional Services (1/20) 
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Operational Efficiencies
JPMorgan Asset Management has formed a team specializing in sustainable investment within the company's private equity business. The team caters to privately held growth-stage companies working on resource efficiency and climate adaptation.
Full Story: Reuters (1/25) 
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Bank of America strategists expect use of stablecoins to grow and the US to issue a central bank digital currency between 2025 and 2030. "We expect stablecoin adoption and use for payments to increase significantly over the next several years as financial institutions explore digital asset custody and trading solutions and as payments companies incorporate blockchain technology into their platforms," according to a report from the strategists.
Full Story: BNN Bloomberg (Canada) (1/24) 
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Regulatory Review
Activist groups and individuals are calling on the Office of the Comptroller of the Currency to raise pressure on major banks to uphold their net-zero emissions pledges and focus more on climate-related risks.
Full Story: Axios (1/24) 
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Research & Analysis
Cerulli Associates's 2021 report on high-net-worth markets finds US advisors may be called upon to help transfer an estimated $84.4 trillion in wealth to beneficiaries in the years through 2045, the bulk of it coming from baby boomer estates. With an estimated $72.6 trillion of the total going to heirs, Cerulli notes that financial advisors who offer complex wealth planning strategies that include tax advice should benefit.
Full Story: Financial Advisor IQ (1/21) 
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