Wells Fargo Asset Management is rebranding as Allspring Global Investments and is hiring former Legg Mason chief Joseph Sullivan as CEO. Wells Fargo Asset Management plans to invest heavily in technology to gain ground against rivals.
Swaps desks have shifted to the Secured Overnight Financing Rate for most interdealer trades. The move should cause a flurry of activity and should create enough activity to establish a forward-looking term rate, a critical milestone in the transition to SOFR. This "is a huge deal," says Thomas Pluta, global head of linear rates trading at JPMorgan Chase. "We've been surprised at how slow the uptake in SOFR derivatives has been to this point, so this is exactly what the market needs."
Global funds bought $8.4 billion worth of high quality bonds up to Wednesday last week, the largest amount in nearly five months, as they backed out of their reflation strategy trades, Bank of America analysts said. A new surge in COVID-19 cases raised concerns for investors about the ongoing global economic recovery.
A Fidelity survey finds 71% of institutional investors expect to add digital assets to portfolios, while 90% of respondents expect to add digital assets within the next five years. "The increased interest and adoption we're seeing is a reflection of the growing sophistication and institutionalization of the digital assets ecosystem," said Tom Jessop, president of Fidelity Digital Assets.
The Financial Industry Regulatory Authority is planning a series of targeted examinations, focusing on special-purpose acquisition companies, compliance with options account openings and possibly the relationship between financial-services firms and social media influencers, CEO Robert Cook said at the SIFMA Compliance & Legal Virtual Forum. Cook also said FINRA's sweeps of a trend toward zero commissions are ongoing, adding, "As new products and fee arrangements evolve, we look at compliance with our rules on communications with the public, which require that there be clear, not misleading, communications about any product or service offered."
Daniel Kahl, due to become acting director of examinations at the Securities and Exchange Commission next month, said at a SIFMA-hosted event the SEC intends to look closely at systemically important investment firms' management of climate change risk. Kahl did not name any firms but said the SEC is interested in their thinking on the issue.
The Financial Industry Regulatory Authority might extend a temporary rule beyond December that relieves firms of a need to conduct branch office inspections. The rule was passed last year in light of the pandemic, but CEO Robert Cook said at the SIFMA Compliance & Legal Virtual Forum: "What I'd like to see happen here is that we would extend [the relief] into next year and that we would step back and look at that [supervision] rule holistically and think about whether it could use some updating to accommodate a thoughtful, risk-based approach to when in-person exams would be necessary." Cook's statement was welcomed by Ira Hammerman, SIFMA executive vice president and general counsel, who said, "We stand ready to help with that."
Platforms offering cryptoasset tokens or other products with prices derived from securities need to report to the Securities and Exchange Commission, Chair Gary Gensler says. Gensler also notes a plan to write registration and regulation rules for security-based swap execution facilities, and he wants to harmonize security-based derivatives market rules with the Commodity Futures Trading Commission's derivatives framework.
The Chinese Cabinet says it will proceed with opening the domestic market to foreign banks and insurers, according to reports from state media. The country will also improve rules governing exchanges between subsidiaries of financial firms and parents companies, the reports state.
Financial strain on millions of customers continues to be a top-of-mind concern for risk management professionals. Join this SIFMA Webinar, co-hosted by FICO, on Thursday, July 29th, from 1 to 2 p.m. EDT to hear from industry representatives on the current consumer credit landscape, insights into developing FICO® Score trends, and important recent changes in key credit metrics. Register today!
SIFMA Research just published our Research Quarterly, Fixed Income -- Issuance and Trading report for the second quarter of 2021. Total fixed income issuance is up 4.5% year over year, but its composition is markedly different: US Treasury, asset-backed securities and mortgage-backed securities issuance are up 48.8%, 34.8% and 19.7%, respectively, while corporate and agency issuance are down 40.0% and 47.4%, respectively. Download the full report for details, including data, tables and the chart book.