July 30, 2021
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News on the capital markets
Morning Bell
The Alternative Reference Rates Committee has officially recommended a series of forward-looking term benchmarks tied to CME Group's Secured Overnight Financing Rate term rate as a replacement for US dollar Libor, a move that could encourage adoption and assist with the transition away from Libor. "Market participants now have all the tools they need as we enter the transition's homestretch," ARRC Chair Tom Wipf says.
Full Story: Reuters (7/29),  Bloomberg (7/29),  Financial Times (subscription required) (7/29),  Practice Insight (7/29) 
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The House Financial Services Committee has advanced a bill sponsored by Rep. Brad Sherman, D-Calif., that would address tough legacy contracts by setting a legal process for automatically switching contracts from Libor to the Secured Overnight Financing Rate. SIFMA supports the Adjustable Interest Rate (LIBOR) Act of 2021 "because it addresses the variety of issues associated with the cessation of all tenors of US dollar Libor and facilitates a smooth transition to alternative reference rates," SIFMA President and CEO Kenneth E. Bentsen, Jr. says.
Full Story: American Banker (7/29) 
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Happening Today
Industry News
Investors poured a record $3.2 billion into Treasury Inflation-Protected Securities in the week through Wednesday, while bond funds drew $12.7 billion, the biggest inflow in three weeks, according to Bank of America.
Full Story: Reuters (7/30) 
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GDP growth has come in below expectations for the second quarter at an annualized 6.5%, as the Delta variant of the coronavirus spreads. While GDP is back above the pre-pandemic level for the first time, economists are concerned further spread of the variant could cause local governments and businesses to reimpose restrictions, forcing consumers to trim spending on travel, dining out and entertainment.
Full Story: The Wall Street Journal (7/29),  Financial Times (subscription required) (7/29) 
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Credit Suisse says it will pursue all avenues, including legal action, to recover $5.5 billion in losses suffered as a result of the collapse of Archegos Capital Management. Archegos probably deceived Credit Suisse and "obfuscated the true extent of its positions," but staffers also disregarded risk, according to a report from law firm Paul Weiss commissioned by the bank.
Full Story: Financial Times (subscription required) (7/29),  The Wall Street Journal (7/29),  Reuters (7/29),  Bloomberg (7/29) 
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    Washington Roundup
    Some municipal bond market participants say the infrastructure bill being considered in the Senate would fall short on key provisions that could help the market fuel economic recovery. Leslie Norwood, SIFMA's head of municipal securities, praises proposed expansion of private activity bond financing in the bill but stresses a need for reinstatement of advance refunding and direct pay bonds.
    Full Story: The Bond Buyer (7/29) 
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    The US is widely expected to avoid possible defaults by raising the debt ceiling or resuming its suspension, but analysts say this could lead to a shortage of safe short-term securities with consequent pressure on money market rates and funds.
    Full Story: Reuters (7/29),  Financial Times (subscription required) (7/29) 
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    A bipartisan Senate proposal to mandate reporting of cryptoasset transactions above $10,000 to the IRS, which would result in taxes on some trades, has caused consternation among cryptocurrency exchanges, their investors and advisers. Critics say the proposal has been drafted too hastily, while advocates say it would simply level the playing field between traditional assets and digital assets.
    Full Story: MarketWatch (tiered subscription model) (7/29),  Bloomberg (7/29) 
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    Global Update
    A rise of intolerant, illiberal governments and acute political unrest is spreading through countries including India, South Africa, Tunisia and at least four Latin and South American nations. In addition to causing chaos and suffering, the trend is making it increasingly challenging for emerging economies to catch up to wealthier counterparts.
    Full Story: The Economist (tiered subscription model) (7/31) 
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    Asset Management Report
    A number of trade groups and major asset-management firms have voiced concerns about the CFA Institute's plan to publish guidelines on how funds should disclose environmental, social and governmental investing strategies, arguing the guidelines would only add to administrative burdens and could cause confusion. A joint response letter to CFA from SIFMA and its Asian affiliate, ASIFMA, states: "We continue to believe that the [Securities and Exchange Commission] is the most appropriate entity to define ESG disclosure parameters and requirements for investment products in the US."
    Full Story: Bloomberg Law (7/29) 
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    Wealth Management Report
    UK wealth manager Charles Stanley will be acquired by Raymond James in a deal valued at £278.9 million. "I believe all stakeholders will benefit from the opportunities for growth arising from Charles Stanley becoming embedded within the Raymond James group," Charles Stanley CEO Paul Abberley said.
    Full Story: FT Adviser (7/29),  The Times (London) (tiered subscription model) (7/29) 
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    Data of the Day
    Initial unemployment claims fell by 24,000 last week to 400,000, according to the Labor Department. While still above pre-pandemic levels, the figure has been generally falling throughout the year, and the downtrend is expected to continue.
    Full Story: The Associated Press (7/29) 
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    SIFMA News
    Consumers are increasingly demanding that their personal financial data be shared with companies that provide other services to consumers, including tax preparation, budgets, personal lending and more. Join SIFMA for this panel on how consumer financial information is shared under Sec. 1033 of Dodd-Frank and what protections are placed on that data, as well as how that data should be regulated in the future.
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    In this edition of SIFMA's Diversity, Equity & Inclusion (DEI) podcast series, SIFMA's Amena Ross, managing director of advocacy, sits down with Samuel A. Ramirez Jr., president and CEO of Ramirez Asset Management and senior managing director of Samuel A. Ramirez and Company to understand how we can break down barriers and foster a culture of diversity, equity and inclusion.
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    SIFMA Video Resources
    SIFMA Minute: One Step at a Time Toward a Shorter Settlement Cycle
    In this SIFMA Minute video, SIFMA President and CEO Kenneth E. Bentsen, Jr. explains why the industry is focused on shortening the settlement cycle to T+1 and not yet T+0. Learn more about this issue.
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