Fed minutes signal rate increase likely next month | Barclays faces $150M fine over FX system | Commentary: Bond-market risk increasing for investors
November 19, 2015
SIFMA SmartBrief
News on the capital markets, wealth management and asset management industries

Morning Bell
Fed minutes signal rate increase likely next month
A majority of the Federal Open Market Committee's members agreed in October that conditions might be right in December to increase interest rates for the first time in almost a decade, meeting minutes show. However, policymakers expressed anxiety about "unanticipated shocks" that could affect the US economy. The committee's next meeting is set for Dec. 15 and 16. Los Angeles Times (tiered subscription model) (11/18), Bloomberg (11/18), The Wall Street Journal (tiered subscription model) (11/19)
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Industry News
Barclays faces $150M fine over FX system
The New York Department of Financial Services has fined Barclays $150 million after finding the firm's "last look" system was rejecting foreign exchange trading orders it deemed unprofitable. The Guardian (London) (11/18), The New York Times (free-article access for SmartBrief readers) (11/18), Financial Times (tiered subscription model) (11/18)
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Commentary: Bond-market risk increasing for investors
A bond-buying spree by investors after the financial crisis because of near-zero interest rates might end "if bonds are no longer the safe haven investors expect them to be," Howard Gold writes. "[R]isk is definitely rising and bond investors have to pay a lot closer attention," he writes. MarketWatch (11/18)
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Washington Roundup
Republicans want cost-benefit data before SEC acts on fiduciary rule
SEC Chairwoman Mary Jo White Speaks At SEC 2014 Conference
White (Win McNamee/Getty Images)
House Republicans said they want to see the Securities and Exchange Commission's data on the cost and benefits of adopting a uniform fiduciary standard for financial professionals before the SEC makes its proposed rule public. Mary Jo White, head of the SEC, said during a hearing of the House Financial Services Committee that its analysis will be released when it proposes its rule. The effect of the rule on the ability of retail investors to obtain financial advice will be carefully considered, she said. InvestmentNews (11/18), ThinkAdvisor (11/18)
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Basel Committee downplays consequence of trading-book review
The Basel Committee on Banking Supervision has found in an assessment of the Fundamental Review of the Trading Book that overall capital requirements for banks would increase by less than 5%. "It shows that the change in market risk capital charges would produce a 4.7% increase in the overall Basel III minimum capital requirement," according to the committee. Market participants, however, are questioning the conclusion. Bank for International Settlements (11/2015), Reuters (11/18), Financial Times (tiered subscription model) (11/18)
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Draft TLAC forces banks to rethink capital structure
The Federal Reserve has prompted some confusion with its definition of structured notes in its draft version of total loss-absorbing capacity requirements. "Folks were previously anticipating some of these provisions, but no one thought it would go so far in excluding certain liabilities from eligible TLAC, so every affected bank is likely in a scramble to restructure its capital so it can comply with the proposed rule," said Lee Ann Anderson, a partner at Ashurst. Risk.net (subscription required) (11/18)
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Bank resolution regimes defended by central bankers
US and UK central bank officials are defending the Group of 20 nations' effort to develop resolution regimes for banks on the verge of collapse. "This is not a power grab by power-hungry authorities. This means where there is a falling knife, shareholders and creditors of these enterprises catch the knife -- not taxpayers," said Andrew Gracie of the Bank of England. Risk.net (subscription required) (11/18)
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SEC's White weighs in on hedge fund transparency bill
A bill introduced by Rep. Nydia Velázquez, D-N.Y., to increase hedge fund oversight by requiring some to file quarterly reports could protect private investors through better transparency but may expose specific hedge fund strategies, said Mary Jo White, head of the Securities and Exchange Commission. The Bond Buyer (free content) (11/18)
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Wealth Management Report
Experts discuss how technology changes financial advising
Experts at SIFMA's recent Annual Meeting discussed how technological changes and millennials are affecting the world of financial advice. Financial advisors need to embrace technology as a tool, not a replacement, they said. "For most clients, it's a spectrum," said Lisa Kidd Hunt of Charles Schwab. "It doesn't displace human contact and face-to-face. But it enables them to engage with us on the phone, in a mobile environment." Pennsylvania+Wall (11/18)
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Operations UpdateSponsored By
Microsoft offers block chain service
Microsoft is striving to help financial companies develop block chain applications by using its network of computers. "We want to create an environment for large financial institutions to get involved easily and inexpensively so that they can compete with fin-tech companies that don't have the same regulatory and legacy burdens," said Marley Gray of Microsoft. "Using our system, you can start building smart contracts and running complex scenarios without overloading your own systems." International Financing Review (free content) (11/13)
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SIFMA's Annual Meeting—The Capital Markets Conference: Highlights
Treasury Secretary Jacob J. Lew, CFTC Chair Timothy Massad and SEC Chair Mary Jo White joined more than 40 expert speakers from the financial industry, policymakers and regulatory community see the highlights.
Register today -- SIFMA Welcomes the European Money Markets Institute for a Discussion of Benchmark Developments, Dec. 2 in NYC
Benchmark reform has significant implications for all market participants -- stay informed on both the thematic elements of benchmark reform and the specific implementation consideration therein at SIFMA's Euribor forum on December 2nd. SIFMA is pleased to welcome the European Money Markets Institute (EMMI) for this discussion. EMMI, as the administrator of Euribor and Eonia®, will share their unique perspective on benchmark regulation in the EU, provide an update on the plans for a transaction-based Euribor®, and review other benchmark projects related to Eonia® and a risk-free rate. Join us for this morning event; event registration is complimentary. Register today!
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Register today: AFME/vdp 3rd Annual Covered Bonds Market Conference: Berlin, Dec. 4
AFME/vdp 3rd Annual Covered Bonds Market Conference in Berlin will convene 150 experts from the buy and sell side, as well as other market participants and regulators for a half day of thought-provoking discussion and networking opportunities. Join AFME to learn more about important developments in European Covered Bond markets, hear expert opinions and panel debates on the latest regulatory developments, and obtain an outlook for 2016.
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Hard work spotlights the character of people: Some turn up their sleeves, some turn up their noses, and some don't turn up at all."
-- Sam Ewing,
baseball player
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