Financial Regulatory Forum

The JOBS Act at age two – prodigy or enfant terrible?

By Stuart Gittleman, Compliance Complete

NEW YORK, Apr. 3, 2014 (Thomson Reuters Accelus) - The financial services industry is still getting used to the two-year old JOBS Act, as funds gingerly begin to explore new general-solicitation freedoms and “crowdfunding” venues sort through the rules, speakers said at a Fordham Law School forum in New York.

As mandated by the JOBS – or Jumpstart Our Business Startups – Act enacted in April 2012, the Securities and Exchange Commission has adopted rules for general solicitations that became effective in September 2013, and is reviewing comments to a December 2013 set of proposed crowd-funding rules. (more…)

Book by high-profile author Lewis may spur high-frequency-trading reform push, success unclear

By Emmanuel Olaoye, Compliance Complete

WASHINGTON/NEW YORK, Apr. 2, 2014 (Thomson Reuters Accelus) - During a clip on Sunday night’s “60 Minutes” program, host Steve Kroft asked bestselling author Michael Lewis why he was so opposed to high frequency trading.

“If it wasn’t so complicated, it would be illegal,” said Lewis, who is the author of a new book called “Flash Boys: A Wall Street Revolt.”  (more…)

Insight: U.S. OCC’s “heightened expectations” standards for bank governance, and how to meet them

By Abel Picardi, Compliance Complete

NEW YORK, Mar. 21 (Thomson Reuters Accelus) – Proposed risk standards for banks regulated by the Office of the Comptroller of the Currency (OCC) will expose top executives and directors of federally chartered insured institutions to greater accountability for any legal, risk or compliance shortcomings.
The OCC proposed the standards in January as way to broaden and enforce the application of its “heightened expectations” for bank stability. The expectations were issued in 2010, in response to the financial crisis. The proposed guidelines’ focus on top bank governance directly aims to limit ”accountability risk,” or the risk that a leadership not held to the consequences of its decisions can endanger an institution. (more…)

Better career paths, new reporting lines as compliance gains status at banks – global report

By Bora Yagiz, Compliance Complete

NEW YORK, Mar. 20 (Thomson Reuters Accelus) - The increasingly important role compliance risk management plays in the banking sector is demonstrated in areas ranging from reorganized risk departments to clearer reporting lines and more rewarding career paths, according to a report by the financial consultancy Accenture.

“The roles of the risk, and especially of the compliance, departments have increasingly been gaining stature within banks in the last five years or so,” said Steve Culp, senior managing director of finance and risk services at Accenture. “Banks are more frequently increasingly adopting organizational structures that connect and align the compliance officers more closely with their decision-making bodies, such as with senior management or the board.”  (more…)

Conduct risk: an overview

By Jane Walshe, Compliance Complete

LONDON/NEW YORK, Mar. 19 (Thomson Reuters Accelus) – Conduct risk is one of the hottest topics in financial services but what exactly is it? This article explores the various definitions of the concept, which can be hard to pin down, put forward by regulators and international standard setting bodies. It will be followed by other articles exploring the findings of Thomson Reuters Accelus’ recent Conduct Risk Report, which provide an industry benchmark showing the work firms are doing in relation to this important area.

The phrase “conduct risk” comprises a wide variety of activities and types of behaviour which fall outside the other main categories of risk, such as market, credit, liquidity and operational risk. In essence it refers to risks attached to the way in which a firm, and its staff, conduct themselves. Although there is no official definition, it is generally agreed to incorporate matters such as how customers are treated, remuneration of staff and how firms deal with conflicts of interest. (more…)

U.S. regulation risks a “Balkanization” of cross-border capital

By Henry Engler, Compliance Complete

NEW YORK, Mar. 12 (Thomson Reuters Accelus) - The term “unintended consequences” has often been used by critics of U.S. regulatory reform when characterizing its complexities. While well-intentioned individually, when unleashed in unison the multiple requirements banks that face become highly unpredictable, including across national borders. (more…)

IA brief: Accuracy on assets reporting is crucial for upcoming amendment filing

By Jason Wallace, Compliance Complete

NEW YORK, Mar. 11 (Thomson Reuters Accelus) - The end of March is a crucial milestone of the annual compliance program for most registered investment advisers and exempt reporting advisers (ERA’s).

Every registered adviser and ERA must update their Forms ADV Part 1 and 2A within 90 days of its fiscal-year end, and that is March 31, 2014 for advisers whose fiscal year ended December 31. (more…)

Compliance Insight: The challenge of implementing new international credit derivatives definitions

By Abel Picardi, Compliance Complete

NEW YORK, Mar. 6 (Thomson Reuters Accelus) – The International Swaps and Derivatives Association, Inc. (ISDA) has announced that its 2014 ISDA Credit Derivatives Definitions will go live from September 2014, creating a challenge for firms to implement the necessary operational and infrastructure changes.

In a press release earlier this month, ISDA highlighted that the revised version of the 2003 ISDA Credit Derivatives Definitions will contain the basic terms used in the documentation of most credit derivatives transactions. Furthermore, the announcement also indicated that the ISDA Credit Steering Committee (CSC) has been working over the past three months with infrastructure providers and clearing houses to develop an appropriate implementation schedule, “including an assessment of the various changes to existing infrastructure that are necessary to support the change.” (more…)

“Big data” tools will improve regulatory oversight, FINRA’s di Florio says

By Stuart Gittleman, Compliance Complete

NEW YORK, Feb. 25 (Thomson Reuters Accelus) - The Financial Industry Regulatory Authority is developing a suite of “big data” information sources and analytics to improve regulatory oversight of securities firms, according to Carlo di Florio, FINRA’s chief risk officer and head of strategy.

Leveraging technology and analytics can make for a “unique moment in regulation [that lets regulators] see things they couldn’t have seen or understood as well before,” di Florio said at an event this week hosted by the Securities Industry and Financial Markets Association compliance and legal society. (more…)

Regulators have several options in dealing with CLOs under Volcker rule – law firm analysis

 By Henry Engler, Compliance Complete

NEW YORK, Feb. 20 (Thomson Reuters Accelus) – In assessing what to do with collateralized loan obligations under the Volcker rule, regulators have several options, some that are better than others for the banking industry, a leading law firm advised clients on Monday this week.

The five regulatory agencies charged with implementation of the Volcker rule have come under fire from U.S. legislators over the Volcker rule’s treatment of collateralized loan obligations (CLOs), an issue the regulators said was at the top of their list of unintended consequences. In essence, CLOs are treated as hedge fund investments under the rule, which was finalized on December 10, 2013. Such treatment came as shock to the industry, and led to a sharp decline in new issuance, with RBS reporting a 60 percent drop in January. (more…)

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