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SEC Jointly Proposes Prohibitions and Restrictions on Proprietary Trading
September 12, 2011-- The Securities and Exchange Commission today voted to propose a rule implementing the so-called "Volcker Rule" requirements. The requirements stem from Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The SEC is issuing the proposal jointly with the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency.
"This proposal is intended to curb the proprietary trading of commercial banks and their affiliates in order to protect taxpayers and consumers by prohibiting insured depository institutions from engaging in risky proprietary trading," said SEC Chairman Mary L. Schapiro.
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Source: SEC.gov
SEC Proposes Rules for Registration of Securities-Based Swap Dealers and Major Security-Based Swap Participants
October 12, 2011--The Securities and Exchange Commission today voted to propose rules that lay out the process by which security-based swap dealers and security-based swap participants must register with the Commission.
The rules stem from Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
"Registering the major market participants in the largely unregulated security-based swap markets is a critical step toward better protecting investors," SEC Chairman Mary L. Schapiro said in her remarks during today's SEC open meeting. "Today's proposal draws from our experience with registration rules regarding broker-dealers - rules that are familiar to many market participants."
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Source: SEC.gov
PowerShares files with the SEC
October 12, 2011--PowerShares has filed a post-effective amendment no. 257, registration statement with the SEC for the PowerShares Chinese Yuan Dim Sum Bond Portfolio.
view filing
Source: SEC.gov
CFTC.gov Financial Data for Futures Commission Merchants Update
October 11, 2011--Selected FCM financial data as of August 31, 2011 (from reports filed by October 2, 2011) is now available.
view updates
Source: CFTC.gov
CFTC To Hold Open Meeting To Consider Two Final Rules And One Proposed Amendment
October 11, 2011--The Commodity Futures Trading Commission (CFTC) will hold a public meeting on Tuesday, October 18, 2011, at 9:30 a.m., on the following topics:
(1) Final Rule on Derivatives Clearing Organization General Provisions and Core Principles;
2) Final Rule on Position Limits for Futures and Swaps; and
(3) Consider a Notice of Proposed Amendment to Effective Date for Swap Regulation.
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Source: CFTC.gov
SEC Announces Agenda and Panelists for Roundtable on Microcap Securities
October 11, 2011--The Securities and Exchange Commission today announced the panelists and final agenda for a public roundtable on microcap securities to be held next week.
The October 17 roundtable, announced last month, is being sponsored by the SEC’s Microcap Fraud Working Group and will feature three panels discussing key regulatory issues, including anti-money laundering monitoring, compliance challenges, and potential changes to the microcap regulatory framework.
The event will begin at 1 p.m. in the multi-purpose room at the SEC’s Washington D.C. headquarters, with public seating on a first-come, first-served basis. The event also can be viewed by live webcast, and will be archived on the website for later viewing.
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Source: SEC.gov
Financial Stability Oversight Council Takes Critical Step to Carry Out Wall Street Reform, Prevent Future Financial Crises
October 11, 2011--The Financial Stability Oversight Council (“the Council”) today took a key step forward to monitor and mitigate potential threats to U.S. financial stability and protect the American taxpayer by releasing details on the proposed process it will follow to determine whether a nonbank financial company should be subject to enhanced supervision.
In the recent financial crisis, financial distress at certain nonbank financial companies contributed to a broad seizing up of financial markets. An important component of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Dodd-Frank Act”), this authority provided to the Council is one of a number of tools now available to help prevent a future financial crisis.
In its tenth meeting, the Council approved the following documents put forward during today’s session: a second notice of proposed rulemaking (NPR) and proposed interpretive guidance on the Council’s authority to require supervision and regulation of certain nonbank financial companies; Council budget information for FY2012; and the minutes of the July 18, 2011, August 8, 2011 and September 15, 2011 Council meetings.
Second NPR and Proposed Interpretive Guidance on the Authority to Require Supervision and Regulation of Certain Nonbank Financial Companies
Section 113 of the Dodd-Frank Act authorizes the Council to require a nonbank financial company to be supervised by the Board of Governors of the Federal Reserve System and be subject to prudential standards if the Council determines that material financial distress at the nonbank financial company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the nonbank financial company, could pose a threat to the financial stability of the United States.
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Source: US Department of the Treasury
Dow Jones Indexes And UBS Announce 2012 Weights Of Dow Jones-UBS Commodity Index
Brent Futures Contract Added to WTI Futures Contract to Comprise Index’s Crude Oil Component
October 11, 2011--New target weightings for the Dow Jones-UBS Commodity Index and the addition of the Brent futures contract as part of the index’s crude oil component were announced today by Dow Jones Indexes andUBS Investment Bank.
Changes to the index, scheduled to be effective in January 2012, were determined and approved by the Dow Jones-UBSCommodity Index (DJ-UBSCI) Supervisory Committee following consultation with the Dow Jones-UBS Commodity Index Advisory Committee.
The Supervisory Committee cited several factors for adding the Brent futures contract to the WTI (West Texas Intermediate) futures contract in comprising the crude oil component of the index: acknowledgment of Brent’s economic significance as a global benchmark, the liquidity of the Brent futures contract and the actual production of the commodity itself. WTI will comprise approximately two-thirds of the index’s crude oil weighting, with Brent accounting for the remainder.
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Source: Dow Jones
Dow Jones Indexes to Distribute Index-Constituent Data Through Morningstar Direct
Additional Data Enables Morningstar Direct to Expand Its Suite of Key Dow Jones Indexes Information
October 11, 2011--Dow Jones Indexes today announced that Morningstar, Inc., a leading provider of independent investment research, is now including constituent data on a range of Dow Jones Indexes' gauges through Morningstar DirectSM, its global web-based institutional investment analysis platform.
Morningstar Direct already provides Dow Jones Indexes' end-of-day index values; with the addition of constituent data, Morningstar Direct is now able to offer clients an expanded suite of key Dow Jones Indexes information.
"The addition of constituent data from Dow Jones Indexes allows Morningstar Direct subscribers access to a broader package of index constituents from a highly respected source," said Xiaohua Xia, president of institutional software for Morningstar. "By making our database more comprehensive, institutional investors, asset managers and investment consultants can now perform more in-depth performance and risk analysis of portfolios against a wider range of benchmarks."
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Source: Dow Jones Indexes
Federal Reserve Board Seeks Comment On Proposal To Implement Volcker Rule requirements of the Dodd-Frank Act
October 11, 2011--The Federal Reserve Board on Tuesday requested public comment on a proposed regulation implementing the so-called "Volcker Rule" requirements of section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 619 generally contains two prohibitions. First, it prohibits insured depository institutions, bank holding companies, and their subsidiaries or affiliates (banking entities) from engaging in short-term proprietary trading of any security, derivative, and certain other financial instruments for a banking entity's own account, subject to certain exemptions.
Second, it prohibits owning, sponsoring, or having certain relationships with, a hedge fund or private equity fund, subject to certain exemptions.
The act also prohibits banking entities from engaging in an exempted transaction or activity if it would involve or result in a material conflict of interest between the banking entity and its clients, customers, or counterparties, or that would result in a material exposure to high-risk assets or trading strategies, in each case as defined by the rule. The act similarly prohibits banking entities from engaging in an exempted transaction or activity if it would pose a threat to the safety and soundness of the banking entity or to the financial stability of the United States.
The proposal, which was developed jointly with the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, clarifies the scope of the act's prohibitions and, consistent with statutory authority, provides certain exemptions to these prohibitions. It is anticipated these agencies will issue a comparable proposal today or in the near future.
Transactions in certain instruments, including obligations of the U.S. government or a U.S. government agency, the government-sponsored enterprises, and state and local governments, are exempt from the statute's prohibitions. Consistent with the statute, other activities exempted include market making, underwriting, and risk-mitigating hedging. The statute also permits banking entities to organize, offer, and invest in a hedge fund or private equity fund subject to a number of conditions.
The proposed rule would require banking entities that engage in these activities to establish an internal compliance program that is designed to ensure and monitor compliance with the statute's prohibitions and restrictions, and implementing regulations. The proposed rule provides commentary intended to assist banking entities in distinguishing permitted market making-related activities from prohibited proprietary trading activities.
view the Prohibitions and Restrictions on Proprietary Trading and Certain Interests In, and Relationships With, Hedge Funds and Private Equity Funds
Source: Federal Reserve Board
