April 6, 2021
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Industry News
Aspects of the Biden administration's infrastructure plan that address renewable energy could give a significant boost to environmental, social and governance investment.
Full Story: CNBC (4/4) 
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The first quarter brought developments in financial markets that indicated stronger risk appetite among investors big and small. While some observers question how long frothy conditions can last, others point out such conditions often continue far longer than what experts predict.
Full Story: The Wall Street Journal (3/31) 
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The Securities and Exchange Commission is requiring sponsors of nontransparent exchange-traded funds to submit large amounts of data, as often as biweekly in some cases.
Full Story: Financial Times (subscription required)/Ignites (4/1) 
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BlackRock has appointed Paul Bodnar as global head of sustainable investing. Bodnar has served as chief strategy officer at a clean energy nonprofit and as an adviser to the Obama administration on energy and climate change.
Full Story: Reuters (3/30) 
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Hedge funds that draw managers from varied educational, professional and ethnic backgrounds deliver between 3.59% and 6.23% more alpha each year than less diverse rivals, a new academic paper argues. Along with better returns, funds with diversified personnel are better equipped to avoid overconfident or excessively risky choices because "Members of a diverse team, by serving as effective checks and balances for each other, help curb idiosyncratic and errant behavior," the researchers note.
Full Story: Institutional Investor (4/5) 
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Turmoil at Archegos Capital Management has drawn attention to funds' use of total return swaps, but alternative products and strategies could achieve similar goals without sacrificing transparency and sound risk management. These include margin and securities lending, as well as adding a clearing process to total return swaps.
Full Story: Securities Finance Monitor (free content) (4/1),  Financial Times (subscription required) (4/1) 
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Regulatory Roundup
Treasury Secretary Janet Yellen has revived the Financial Stability Oversight Council's Hedge Fund Working Group, which has not made a presentation to the council since 2016. The FSOC, which Yellen chairs, has reviewed information on the role of hedge funds during market stress in March 2020.
Full Story: MarketWatch (tiered subscription model) (3/31),  Bloomberg (3/31),  The Wall Street Journal (3/31) 
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Family offices and nonbanks might face heightened regulation in the wake of the collapse of Archegos Capital Management and subsequent losses inflicted on banks. Treasury Secretary Janet Yellen and Democratic lawmakers had already prioritized scrutiny of nonbanks and risk they present.
Full Story: Reuters (3/30),  Morning Consult (3/31) 
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Commodity Futures Trading Commission member Dan Berkovitz wants tighter oversight of family offices in light of turmoil at Archegos Capital Management. "To protect the integrity of the commodity markets, the commission must be aware of and able to monitor the activities of large family offices," Berkovitz says.
Full Story: Bloomberg (4/1),  Reuters (4/1),  Politico Pro (subscription required) (4/1) 
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A UK-EU memorandum of understanding on financial services has drawn indifference from market participants. Kay Swinburne, vice chair of financial services at KPMG UK, says the memorandum is "essentially just a commitment to cooperation," while Allen & Overy partner Bob Penn says, "I suspect it will not represent a meaningful step towards resolving market-access issues."
Full Story: Practice Insight (3/30),  Reuters (3/30),  Bloomberg (3/31) 
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SIFMA is pleased to offer our 2021 edition of "Sources: A Resource Directory." Compiled by SIFMA, Sources is an easy-to-use guide of products and services for the securities and financial industry. Download the guide today!
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The Federal Reserve continues to support the US economic recovery by increasing its holdings of Treasury and agency mortgage-backed securities to help foster smooth market functioning and accommodative financial conditions. Lorie K. Logan, Manager of the System Open Market Account and EVP in the Markets Group of the New York Fed, will discuss via live webinar the impact of abundant reserves on money markets and policy implementation with SIFMA President and CEO Kenneth E. Bentsen, Jr. A panel discussion on Treasury market structure and emerging policy proposals, featuring leaders from SIFMA's member firms, will follow.
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