October 12, 2021
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Industry News
Companies are largely expected to report strong earnings for the third quarter in coming days, with analysts forecasting a 29.6% year-over-year increase for S&P 500 companies. Some firms have noted challenges such as labor shortages, supply chain bottlenecks and rising freight costs. BlackRock, Goldman Sachs and JPMorgan Chase kick off earnings season Wednesday.
Full Story: Reuters (10/11) 
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Hedge funds extended their net long positions on the US dollar by $7.2 billion over the week to Oct. 5 to reach $22.5 billion, US futures market data show. The increase is the largest on record for nearly two-and-a-half years and contrasts with funds' net short positions on the euro and sterling.
Full Story: Reuters (10/11),  Bloomberg (10/11) 
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BlackRock has announced it will allow major investors, including pensions and endowment funds, to cast votes on shareholder proposals starting next year, replacing a system in which it normally votes on their behalf. The facility will give the investors an unprecedented say in matters such as board member nominations and climate-related disclosures.
Full Story: The Wall Street Journal (10/7),  Financial Times (subscription required) (10/7) 
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Suni Harford, president of UBS Asset Management, led the firm to achieve a return on attributed equity of 74.2% in 2020, a significant rise from 29.7% in 2019, and she attributes the success to a positive attitude toward flexible work arrangements. "Continuing to focus on the health and safety of our staff around the globe is something that will continue long after we're back to the 'new normal,'" Harford said.
Full Story: American Banker (10/6) 
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Vanguard's acquisition of Just Invest, an investment advisor that specializes in tax-management strategies, enables Vanguard to add personalized indexing to its advisor offering. Industry participants note the facility helps advisors customize client portfolios, which can develop and strengthen the client relationship.
Full Story: Financial Advisor IQ (10/5) 
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Industry leaders speaking at the SIFMA Operations Conference & Exhibition have highlighted benefits that can be gained in the proposed switch of the settlement cycle from T+2 to T+1. Brian Steele, global head of market solutions at Goldman Sachs, said a shorter settlement cycle "will create a forcing mechanism for us to reduce the operational friction that exists," while Steven Morgan, Citigroup's co-head of global market operations and operations solutions, described the switch as a "big win for the industry and for clients."
Full Story: International Financial Law Review (10/5) 
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Regulatory Roundup
Treasury Secretary Janet Yellen said she expects lawmakers to pass legislation to join other jurisdictions in adopting a 15% minimum corporate tax rate. Yellen said she is "confident that what we need to do to come into compliance with the minimum tax will be included in a reconciliation package."
Full Story: Reuters (10/11) 
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Securities and Exchange Commission Chair Gary Gensler is calling for an update of regulations covering "novel and complex" exchange-traded products, which he says can be misunderstood by investors. Gensler says these products "can pose risks even to sophisticated investors and can potentially create systemwide risks by operating in unanticipated ways when markets experience volatility or stress conditions."
Full Story: Financial Times (subscription required) (10/5),  Futures & Options World (subscription required) (10/5) 
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The White House reportedly is considering an executive order that requires regulators to develop a far-reaching strategy for overseeing cryptocurrency trading. The directive would focus on issues including financial regulation, economic innovation and national security and would allocate responsibilities to various agencies and oblige them to cooperate.
Full Story: BNN Bloomberg (Canada) (10/8),  Reuters (10/8) 
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Join us for the annual Asset Management Derivatives Forum at The Ritz-Carlton Laguna Niguel Feb. 7-9. Market participants from all sides of a trade and leading regulators will examine the latest developments impacting the use of derivatives by asset managers, including business, clearing, regulatory and operations issues. Gain insight into how investors, sell-side firms and market structure operators view the landscape for derivatives activity by the asset management community. Register today!
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In this podcast, SIFMA's Peter Matheson sits down with Citi's Kimberley Claman and EY's Douglas Bell to discuss why, in an increasingly competitive global economy, it is vital that financial services are integrated into the U.S. international economic strategy. "The U.S. financial services industry is fundamental to our economy and that matters every day of the year. But the past year and a half has demonstrated particularly vividly how central to our livelihoods financial services are," says Claman. Tune in to hear more.
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Beyond myself, somewhere, I wait for my arrival.
Octavio Paz,
poet, writer, diplomat, Nobel Prize winner
National Hispanic Heritage Month is Sept. 15 to Oct. 15
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