Financial Regulatory Forum

U.S. futures regulator wants ‘Eddie Murphy’ insider-trading ban

By Roberta Rampton and Charles Abbott

WASHINGTON, March 3 (Reuters) – The top U.S. futures regulator wants Congress to include as part of its financial regulatory reform package new securities-style firewalls and insider trading bans for commodities, the chairman of the Commodity Futures Trading Commission said on Wednesday.

The CFTC and Securities and Exchange Commission proposed the harmonized rules in October, many of which require authority from Congress. This is the first time CFTC Chairman Gary Gensler has indicated how soon he wants to begin implementing the new measures.

The CFTC is calling its insider trading ban the “Eddie Murphy rule” after the actor’s role in the movie “Trading Places,” in which traders stole an Agriculture Department report on the U.S. orange crop and then placed positions on the market.

Gensler said the House version of the reform bill included some of the harmonized measures, and said the CFTC will suggest legislative provisions to the Senate on other measures.

“We will provide language to the Senate as they consider financial regulatory reform legislation,” Gensler said in testimony prepared for a House Agriculture subcommittee hearing.

U.S. government to enhance municipal market regulation

WASHINGTON, March 2 (Reuters) – The Internal Revenue Service has agreed to work more closely with the Securities and Exchange Commission to regulate the U.S. municipal bond market, the IRS said on Tuesday, adding the two federal agencies had signed memorandum of understanding.

“This memorandum reflects the commitment both agencies have in using all means possible to ensure the municipal bond market operates in accordance with all the laws that govern it,” said IRS Commissioner Doug Shulman in a statement.

Under the agreement, the two agencies will identify issues and trends in the municipal securities industry and “enhance performance” in regulating the $2.8 trillion market.

U.S. market regulators eye clearinghouse governance – CFTC’s Gensler

By Christopher Doering

WASHINGTON, March 1 (Reuters) – Congress should give U.S. securities and futures regulators the authority to ensure clearinghouses are protected against conflicts of interest, the chairman of the Commodity Futures Trading Commission said on Monday.

Gary Gensler outlined his vision for clearinghouses as two U.S. Senate committees work to finalize financial regulatory reform bills that will include new oversight for over-the-counter derivatives.

“Open governance would ensure that clearinghouses are not governed by parties that might have a conflict of interest or financial stake in particular transactions,” Gensler said in remarks prepared for the Institute of International Bankers.

SPECIAL REPORT – Philadelphia SEC unit, where rogue traders dare not tread

By Matthew Goldstein

PHILADELPHIA, Feb 19 (Reuters) – An office building that sits atop an upscale shopping mall in downtown Philadelphia is not the sort of place that would ordinarily strike fear into the hearts of bad guys on Wall Street.

But that is home turf for the little-known regulator who has built a better mousetrap: an increasingly sophisticated computer database which is already helping the U.S. Securities and Exchange Commission catch insider traders.

Last month, Daniel Hawke, an energetic, guitar-playing 46-year-old lawyer, was named head of a new task force charged with cracking down on a variety of market abuses.

INTERVIEW – Proxy access for all, U.S. SEC Commissioner says

By Rachelle Younglai

WASHINGTON, Feb 9 (Reuters) – All publicly traded companies should be required to give shareholders a way to influence the composition of their corporate boards, a top U.S. Securities and Exchange Commission official said on Tuesday.

Luis Aguilar, one of five officials who decides on federal securities rules, said companies should not be given the option to opt out of potential rules being considered by his agency.

“It’s a slippery slope,” SEC Commissioner Aguilar told Reuters in an interview. Aguilar said giving companies such an option could lead to other exemptions.

U.S. SEC bolsters money market fund rules on risk, liquidity

By Rachelle Younglai

WASHINGTON, Jan 27 (Reuters) – U.S. securities regulators adopted rules aimed at making money market funds a safer investment after the collapse of the Reserve Primary Fund triggered a run on the $3.24 trillion market in 2008.

The Securities and Exchange Commission voted 4-1 on Wednesday to bolster the funds’ liquidity, limit their riskier investments and to show investors the funds may not always maintain a stable $1 share value.

The fund industry was pleased the new rules were less restrictive than the agency initially proposed last year, but the new rules were likely to come at the expense of some yield.

US SEC mull tough rules for money market funds

By Rachelle Younglai and Aaron Pressman

WASHINGTON/BOSTON, Jan 26 (Reuters) – U.S. regulators are preparing new rules to limit the risks taken by money market funds, aiming to ensure investors can always withdraw their money, two people familiar with the plans said on Tuesday.

The Securities and Exchange Commission wants to avoid a repeat of the run on the $3.24 trillion market that occurred during 2008′s collapse of the Reserve Primary Fund.

The agency is considering requiring money market funds to hold a minimum of 10 percent of their assets in liquid securities and may shorten the average maturity of debt the funds can hold to 60 days from 90 days, the sources said.

EXCLUSIVE – Argentina eyes late Jan, Feb debt swap

By Kevin Gray and Luis Andres Henao

BUENOS AIRES, Jan 14 (Reuters) – Argentina is working to launch an exchange of $20 billion in defaulted debt by the end of January or early February despite a political battle over foreign reserves that has roiled markets, the finance secretary told Reuters on Thursday.

Finance Secretary Hernan Lorenzino said Argentine officials have been talking with retail investors and would travel to Europe next week to discuss the swap with holders of the country’s defaulted debt.

Argentina hopes the swap will allow it to issue new global bonds eight years after a massive sovereign default and ease tight financing this year as it confronts some $13 billion in debt payments.

Top regulators to face U.S. financial crisis panel

By Kevin Drawbaugh

WASHINGTON, Jan 14 (Reuters) – Senior U.S. regulators, including outspoken Federal Deposit Insurance Corp Chairman Sheila Bair, will tell their side of the story on Thursday to a commission examining the origins of the 2008 financial crisis.

The 10-member panel, in its first public hearing, heard a tale of misjudgments and regret from top Wall Street bankers on Wednesday, but did not get an outright apology or any new explanations for the debacle that shook world markets.

Four of Wall Street’s top bankers acknowledged taking on too much risk and having choked on their own financial cooking in the subprime mortgage market, but they defended their pay packages and the huge size of their businesses.

US SEC proposes “effective” ban on naked access

By Rachelle Younglai and Jonathan Spicer

WASHINGTON/NEW YORK, Jan 13 (Reuters) – U.S. securities regulators proposed rules on Wednesday that would require more supervision of unlicensed high-frequency traders who gain unfettered, or “naked,” access to public markets.

The Securities and Exchange Commission voted for a proposal that would require brokerages that rent out their access to the markets to have rules in place to protect against potential mishaps from unlicensed traders.

In the practice known as “sponsored” access, brokerages that have been approved to trade on an exchange rent their access to traders, who are then able to shave milliseconds from the time it takes to access the markets.