April 20, 2021
SIFMA SmartBrief
News on the capital markets
Morning Bell
Securities and Exchange Commission Chair Gary Gensler has hired four senior staffers, including the AFL-CIO's Heather Slavkin Corzo as policy director. Gensler's priorities are expected to include environmental, social and governance issues, special-purpose acquisition companies and the mainstreaming of cryptocurrencies.
Full Story: The Wall Street Journal (4/19),  The New York Times (4/19),  ThinkAdvisor (free registration) (4/19) 
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Is This The End Of Domestic Dominance?
All rides come to an end. Between overvaluation, reduced earnings strength, and a weakened U.S. dollar, the trends may be pointing to the end of domestic dominance and the beginning of a new international era. Here's what clients need to know.
Happening Today
Industry News
Morgan Stanley is conducting a three-part bond offering worth about $6 billion, sources say, following in the footsteps of other big banks. The unsecured bonds reportedly are fixed-to-floating-rate notes.
Full Story: Bloomberg (4/19) 
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Citigroup has selected Philip Drury to head a new investment banking group that advises data, entertainment, media, technology and telecommunication companies. Drury will relocate to San Francisco, according to an internal memo.
Full Story: Bloomberg (4/19),  PYMNTS (4/19) 
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Washington Roundup
President Joe Biden said ahead of a second bipartisan discussion with lawmakers on his infrastructure plan he was "prepared to compromise, prepared to see what we can do, what we get together on." Republican lawmakers have said they want a more modest package than the $2 trillion-plus proposal from Biden.
Full Story: CNBC (4/19),  Reuters (4/19) 
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The Investors Choice Act, which would effectively ban pre-dispute mandatory arbitration agreements in brokerage and investment advisory customer contracts and would make it easier to launch class-action lawsuits, has been reintroduced in the House and the Senate. SIFMA has voiced opposition to the bills, with President and CEO Kenneth E. Bentsen, Jr., stating: "The securities arbitration system has worked effectively for decades because it is subject to public oversight, regulatory oversight by multiple independent regulators, and rules of procedure that are designed to benefit investors."
Full Story: InvestmentNews (tiered subscription model) (4/16) 
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Rep. Steve Stivers, R-Ohio, who serves as co-chair of the Municipal Finance Caucus, is resigning from Congress to become CEO and president of the Ohio Chamber of Commerce. Stivers is known as a dynamic and influential presence. "SIFMA thanks Representative Stivers for his leadership on issues of importance to the municipal securities industry, particularly on infrastructure funding, which has enjoyed bipartisan support," said SIFMA President and CEO Kenneth E. Bentsen, Jr.
Full Story: The Bond Buyer (subscription required) (4/19) 
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Global Update
A review by the European Central Bank shows the largest eurozone banks have underestimated capital requirements by using models that understate the riskiness of assets.
Full Story: Financial Times (subscription required) (4/19),  Reuters (4/19),  Risk (subscription required) (4/19),  GlobalCapital (subscription required) (4/19) 
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Chinese markets are being monitored for big inflows and outflows of foreign money, says Fang Xinghai, chair of the China Securities Regulatory Commission. The commission is confident it can keep capital markets steady while widening access, Fang says.
Full Story: Reuters (4/19) 
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Asset Management Report
The continued rise of equities markets, widening market breadth and influx of retail investors have contributed to a sharp decline in short-selling bets. "Short selling of what were historically the 'go-to' shorts has slowed dramatically and not been replaced by 'new' shorts," a team of Morgan Stanley analysts told clients.
Full Story: Bloomberg (4/19) 
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Wealth Management Report
Banks including Citigroup are making it a key part of their strategy to cater more to ultrawealthy individuals, with Bank of America and Morgan Stanley noting significant increases in account balances of such clients during the past year. "Demand for advice is surging," said Andy Sieg, president of BofA's Merrill Lynch Wealth Management, who expects a continued upturn in requests for high-net-worth wealth-management services. Register to hear Sieg and others at SIFMA's virtual Private Client Conference on May 26 and 27.
Full Story: Bloomberg (4/19) 
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Data of the Day
The four largest banks gathered $919 billion in additional deposits last year, which was kept in cash and securities holdings, data from the Federal Reserve shows.
Full Story: Bloomberg (4/19) 
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On April 22, from 11 a.m. to 12:15 p.m. ET, hear from FINRA officials as they discuss their new organizational model for monitoring and examining broker-dealers, with a focus on financial and operational examination priorities. Learn about the changes to FINRA's model for Examinations and Risk Monitoring; remote examinations in the world of COVID-19; and 2021 financial management examination priorities. The event is hosted by the SIFMA Financial Management Society.
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In this note from SIFMA Insights, we walk through retirement account and stock ownership trends, updating data points on stock ownership and reinforcing key points. We find individual investors own stocks in America with key takeaways including private retirement accounts outweigh government funded at 65.2% of total retirement assets. Download the full report for more.
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April prepares her green traffic light and the world thinks Go.
Christopher Morley,
writer, editor, journalist
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