When the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law last month, we ran a poll question on our website asking whether it: a) ends “too big to fail,” b) doesn’t end “too big to fail,” or c) is a full employment act for lawyers. Most of those who responded chose option c, and from the looks of things at the Futures Industry Association‘s financial reform forum in Chicago yesterday, they were right. The forum was packed with lawyers who will be very busy over the next year as new rules stemming from the legislation are put in place. Their discussion on the new rules was complicated and mind-numbing, and it seemed like the only certainty at this point is that there are many UNcertainties. (more…)
Posts Tagged ‘regulation’
New regulations: Clear as mud
Wednesday, August 18th, 2010Managing regulation
Wednesday, July 21st, 2010The International Securities Exchange (ISE) announced this week that it is introducing a new order type called “Do not route” (DNR). Both “priority” and “professional customers” will be able to designate an order DNR so that it would not be routed to another exchange if the ISE is not posting the National Best Bid or Offer (NBBO).
Financial reform is law, but what happens now?
Wednesday, July 21st, 2010President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law today, but this is far from the end of the road in financial reform. In fact, it’s just the beginning of a longer process, and the devil is definitely in the details. The law gives most of the power to the regulatory agencies to actually make the rules, a process that could take up to a year, analysts say. And a history of lack of cooperation and regulatory overlap in some financial products from the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) only complicates matters. Many experts still aren’t sure of the exact ramifications of the law. (more…)
Financial reform: Almost there
Thursday, July 1st, 2010After the House and Senate worked out a compromise on the financial reform bill last week and that compromise passed the House yesterday, only the Senate remains as a hurdle to the bill’s passage, and the bill could become law within the next few weeks. The legislation will mean many changes for traders, including requirements for clearing of OTC derivatives, with the new structure meaning changes in pricing and liquidity. And new restrictions on proprietary trading could cause larger traders to shift from banks to hedge funds, private equity firms or foreign firms.
Out of sight, out of mind
Wednesday, June 16th, 2010Federal Housing Finance Agency (FHFA), has ordered government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to delist from the New York Stock exchange. The NYSE asks companies trading below $1 to either take corrective action or delist.
When is an obligation not an obligation?
Thursday, June 3rd, 2010The investigation of the May 6 “flash crash” is centering on the concept of stub quotes. This is a relatively new practice that allows designated market makers (specialists) to technically meet their obligation to provide two-sided markets without actually doing it.
We noted on this page earlier that markets makers had appeared to disappear during the extreme move on May 6.
Will George Clooney be there?
Wednesday, May 12th, 2010Is the futures industry going Hollywood? That’s the question as the battle over approval of futures contracts based on box office receipts continues. The Commodity Futures Trading Commission (CFTC) is apparently giving serious consideration to the contracts, though, as they announced today that there will be an open meeting on May 19 to consider them. But you have to wonder: are traders in general actually taking this seriously? (more…)
The Emperor’s new clothes part 2
Thursday, April 22nd, 2010If one is to believe the Securities and Exchange Commission’s (SEC) version of what occurred leading to its charges of fraud against Goldman Sachs; hedge fund Paulson and Co. identified a group of vulnerable mortgaged backed securities, worked along with Goldman on creating a synthetic collateralized debt obligation (CDO) based on those securities while Goldman went about to find suckers to take the long side of the trade. One of Goldman’s defenses is that it was one of those suckers.
Hold the onions
Monday, April 19th, 2010Sen. Blanche Lincoln’s new bill on derivatives legislation raises some eye-watering questions on how far banning trading on certain commodities could go. The Wall Street Transparency and Accountability Act of 2010, released by the Senate last week, would ban trading on onion futures and motion picture receipts. According to the Financial Times, onion futures haven’t been traded since 1958 upon protest by farmers after prices collapsed. The FT story says that some argue that the ban on exchange trading for onions (which is supported by the National Onion Association) actually contributes to price volatility in the onion markets. (more…)
