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| November 3, 2009 |
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Supreme Court considers mutual fund advisers' compensation
The Supreme Court heard arguments regarding compensation policies for mutual fund investment advisers. The court appeared reluctant to give judges a role in overseeing the policies, although some justices indicated that courts might have to intervene. The high court's case focuses on mutual funds, but justices touched on compensation policies of other sectors. Read SIFMA's amicus brief filed in Jones v. Harris Associates. NYTimes.com (11/2) National Public Radio (11/2)
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Fed says pay guidelines should be implemented this year
Although compensation rules aimed at reining in excessive risk-taking do not officially come into force until next year, the Federal Reserve told major banks that they need to follow pay guidelines in this year's round of bonuses. The Fed's call is likely a way to pre-empt public backlash against what is expected to be a massive bonus season for banks. The central bank made the call as banks decide how to divvy up bonus pools for 2009. 
CNBC (11/2) Financial Times (tiered subscription model) (11/2) The Washington Post (11/3)
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CIT must overcome hurdles to emerge as viable entity
After filing for bankruptcy, CIT Group faces several obstacles, including approval of its prepackaged bankruptcy plan by the court, before it can return as a viable business. The court must determine whether CIT's plan is "feasible" and that the lender will likely not have to liquidate or refile for bankruptcy before Judge Allan Gropper may approve the plan. CIT is expected to pass that hurdle, but analysts said there are other concerns. Financial Times (tiered subscription model) (11/3) Reuters (11/3)
Economist must figure out how to soak up Fed's money
During the financial crisis, the Federal Reserve poured $1 trillion into the financial system to keep the economy from plunging. Brian Sack, an economist at the Federal Reserve Bank of New York, is in charge of figuring out how to soak up that money. Sack runs the Fed's market group, which manages the central bank's trading, buying and selling of Treasuries to influence interest rates. The group came up with complex programs during the past year, including purchases of mortgage-backed securities and commercial paper loans, and it must end the programs without disrupting the economy too much. The Wall Street Journal (11/3)
Credit Suisse's Mathisson touts benefits of dark pools
While regulators and lawmakers scrutinize dark pools, Daniel Mathisson, an executive at Credit Suisse, explained that the facility offers considerable benefits to the market. Mathisson, who recently defended dark pools before a Senate subcommittee, said the platform allows traders to avoid influencing stock prices when they are trading large blocks of stock. NYTimes.com/DealBook blog (11/2)
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FDIC's Bair says government can't maintain status quo
Federal Deposit Insurance Corp. Chairwoman Sheila Bair said the government's intervention into financial markets, though necessary, has been challenging to her as a market advocate. She also said the government needs additional tools to keep financial institutions from becoming too big to fail. "The government has been going into places where we don't want to be," Bair said. "We simply cannot afford to maintain the status quo." Reuters (11/2)
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Curious about what you might have missed out on at SIFMA's Annual Meeting 2009?
Some of the most prominent people in financial services addressed an audience of senior executives at SIFMA's Annual Meeting 2009. Mary Schapiro, chairman of the Securities and Exchange Commission, and Richard Ketchum, chairman and CEO of the Financial Industry Regulatory Authority, were only two of the speakers who addressed the crowd at the New York Marriott Marquis hotel, while Charlie Rose had conversations with Jamie Dimon, chairman and CEO of JPMorgan Chase, and Treasury Secretary Timothy Geithner. Additionally, special panels were convened to focus on three areas of the market that have attracted considerable attention: the changing landscape for financial advisers, municipal securities and market structure. See more of what you might have missed.
Back-to-school night: Reception provides preview of 2010 Securities Industry Institute
Class was in session early on the evening of Sept. 23 when faculty from the Securities Industry Institute, the premier executive-education program for the financial services industry, provided industry practitioners a sample of what the program has to offer. Hosted by SIFMA and held at the SIFMA Conference Center in New York City, the program allowed attendees to listen to three faculty members, including Jeremy J. Siegel, talk about their perspective on markets, leadership and regaining trust. Learn more about the reception and the 2010 Securities Industry Institute.
Financial industry execs oppose proposed transaction tax
Lawmakers are considering a proposal that would levy a tax on all trades of financial products, including stocks, bonds, derivatives and commodities. Executives in the financial industry said the tax would discourage investment in the country, driving business overseas. "Transaction taxes have been suggested on and off at the state and federal levels for as long as there have been both stock trades and governments looking for revenue," said Travis Larson, a SIFMA representative. "As an industry, we have an equally long history of opposing such proposals." Pensions & Investments (11/2)
Key senator sees unsettled issues hindering financial reform
Sen. Richard Shelby, the top Republican on the banking committee, wants bipartisan support for overhauling financial regulation, but he sees unsettled issues and opposes establishment of the Consumer Financial Protection Agency, an aide said. Shelby supports stronger protection for consumers, but he thinks "the creation of a stand-alone agency is neither necessary nor wise," said Jonathan Graffeo, a representative for the lawmaker. Shelby is also interested in further debate on derivatives, bank supervision and systemic risk, Graffeo said. Reuters (11/2)
Bill would move some advisory firms from SEC to state oversight
The House Financial Services Committee is expected to approve legislation that would raise the threshold requirement for investment advisory firms to be registered with the Securities and Exchange Commission from $25 million to $100 million. The change would mean state regulators would take on oversight of about 4,200 advisory firms. The bill also includes measures to harmonize regulation of investment advisers and broker-dealers. InvestmentNews (free registration) (11/1)
Commentary: Markets should keep on top of technology
Technological advances prompted exponential growth in trading during the past several years. Tom Steinert-Threlkeld, editor in chief of Securities Industry News, explains that regulators are looking into how these advances, including high-frequency trading and algorithms, are affecting markets. He argues that market participants, particularly individual exchanges, should consider developing a consolidated database of trade information before lawmakers and regulators do. Securities Technology Monitor (11/2)
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