Financial Regulatory Forum

Regulators globally seek to curb supercomputer trading glitches

By Guest Contributor
August 31, 2012

By Christopher Elias

LONDON, Aug. 31, (Business Law Currents) - A series of stock market glitches has prompted regulators around the world to introduce new regulations to limit the impact of computer malfunctions on trading. Shielding markets from another Knight Capital disaster, the new rules seek to defend market participants from malicious machines and risky robots. (more…)

Standard Chartered’s big shareholders stay quiet on compliance, say focus is on governance

By Guest Contributor
August 31, 2012

By Martin Coyle

LONDON/HONG KONG, Aug. 31 (Thomson Reuters Accelus) – Standard Chartered Bank’s major shareholders are declining to openly criticise the firm’s compliance practices but some cited overall governance issues as their primary interest following its settlement over allegations it breached Iran-sanctions laws. One institutional investor said that it had discussed compliance issues with the bank before this month’s $340 million settlement was reached with New York’s Department of Financial Services (DFS) for breaches of sanctions with Iran. The UK fund manager, which declined to be named, said that it discussed the allegations in general as well as compliance issues.  (more…)

U.S. consumer bureau’s mortgage servicing rules are in the right direction despite shortcomings

By Guest Contributor
August 31, 2012

By Bora Yagiz

NEW YORK, Aug. 31 (Thomson Reuters Accelus) - The Consumer Finance Protection Bureau’s proposed rules earlier this month on mortgage servicing are a step in the right direction in its efforts to uproot the malpractices that were once prevalent in the subprime mortgage market. The proposals suffer from a few shortcomings, however, not the least because the Bureau, with its “one-size-fits-all” approach, seems to have ignored the nuances between the different players within the servicing industry. (more…)

Staging “Macbeth” in Manhattan: enforcement in the aftermath of Libor and Standard Chartered

By Guest Contributor
August 31, 2012

By Justin O’Brien, Thomson Reuters Accelus contributing author

LONDON/NEW YORK, Aug. 31 (Thomson Reuters Accelus) - Despite the lack of commentary from either the White House or federal executive agencies, the Standard Chartered investigation — and the manner in which it was handled — is certain to reignite the festering feud over how to regulate finance. Absent the physical bloodshed, the power struggle for control of banking regulation and how to change its culture finds remarkable parallels in Macbeth, the classic Shakespearean tale of political infighting. As with Banquo’s Ghost, the spectre of Eliot Spitzer and his battles with federal counterparts over the purpose of regulation looms large.  (more…)

Standard Chartered case highlights competing agendas of compliance, legal departments in firms

By Guest Contributor
August 13, 2012

By Julie DiMauro

NEW YORK, Aug. 13 (Thomson Reuters Accelus) – The sanctions evasion case against Standard Chartered PLC highlights a governance disconnect at many financial services firms between the legal and compliance departments and their perceived obligations, with the former being focused on the letter of the law and the latter on its spirit.

Knight Capital crisis brings new push for rules on trading, technology, structure

By Guest Contributor
August 6, 2012

By Nick Paraskeva

NEW YORK, Aug. 6 (Thomson Reuters Accelus) - The near-collapse of equity market maker Knight Capital after sending erroneous trades to the New York Stock Exchange last week is the latest in a string of errors causing heavy losses and disrupting markets. While smaller in dollar terms than losses from JPMorgan’s ‘London whale’ or UBS’ rogue trader, it is causing regulators to review firms’ compliance and controls over operational risks, and rules for restructuring of equity markets.

Knight Capital’s filings reveal scant oversight focus on tech risks for board

By Guest Contributor
August 3, 2012

By Emmanuel Olaoye

WASHINGTON, Aug. 3 (Thomson Reuters Accelus) – Knight Capital Group’s public filings show that the company viewed technology systems among significant risks faced by the firm, but the duties outlined for its seven board members do not specify oversight of technology as a factor that could derail it, a threat the company now faces.

INTERVIEW: Whistleblowing is a duty if internal calls unheeded, U.S. bailout overseer tells compliance officers

By Guest Contributor
July 31, 2012

By Stuart Gittleman

NEW YORK, July 31 (Thomson Reuters Accelus) - Compliance officers have a duty to become whistleblowers if their concerns are not heeded internally, Neil Barofsky, the watchdog over the U.S. financial crisis bailout program, told Compliance Complete in an interview.

Collateral management reform could herald benefits for risk managers

By Guest Contributor
July 30, 2012

By Rachel Wolcott

LONDON/NEW YORK, July 30 (Thomson Reuters Accelus) - Risk managers could benefit from the financial services industry’s revamp of collateral management services in preparation for the new regulatory requirements that will drive demand for high-quality collateral. New regulations for the clearing of over-the-counter (OTC) derivatives through central counterparties (CCPs) alone could increase demand for high-quality collateral to $2 trillion or more, according to some estimates. In response, some firms are aiming for a more universal approach to collateral management.

Pressures of high revenues, growth, fuel compliance shortcuts, study finds

By Guest Contributor
July 26, 2012

By Julie DiMauro and Stuart Gittleman

NEW YORK, July 26 (Thomson Reuters Accelus) – Most Fortune 500 companies have the components of a comprehensive compliance program, but many have too many employees who feel pressured to compromise standards, a recent nationwide survey revealed. Pressures intensify in periods of growth and high profits, the survey’s sponsor said.
The National Business Ethics Survey (NBES) study, for the nonpartisan research group Ethics Resource Center (ERC), polled adult employees in a wide range of job titles working at least 20 hours per week for U.S.-based for-profit companies with yearly revenues of $5 billion or more.