Disclosure as Solution
On July 18th, Risk.net recounted former SEC Chair Harvey Pitt’s proposal for resolving concerns that U.S. firms are avoiding U.S. oversight of their cross-border swap transactions. Pitt’s solution: disclosure. Disclosure as Solution.
On July 18th, CFO.com discussed the implications of the Eighth Circuit Court of Appeals decision in Tussey v. ABB, Inc., which made 401(k) plan sponsors liable for excessive plan fees and costs. Retirement Duties.
On July 17th, the Risk & Compliance Journal noted the pros and cons of outsourcing corporate compliance positions. Outsourced.
On July 17th, DealBook summarized New York State’s proposal for overseeing virtual currency companies. BitLicense.
Senators Seek Tax Guidance for Money Market Funds
On July 16th, Reuters reported Senators Bob Menendez, Mark Warner, Pat Toomey, and Mike Crapo have written the Treasury Department urging it to quickly issue tax guidance in the event that the SEC issues new rules requiring money market funds to adopt a floating net asset value. Taxing Issue.
Federal Reserve Could Open Discount Window to Non-Banks
On July 16th, Bloomberg summarized the comments made by Federal Reserve Board Chair Janet Yellen before the House Financial Services Committee. Yellen said that she would consider granting broker-dealers and others access to the Federal Reserve’s discount window in exigent circumstances. Yellen Testimony.
On July 16th, the Washington Post discussed the findings of an Institutional Shareholder Services report on the 2014 corporate proxy season. Among other things, the study found that shareholder proposals on social and environmental issues outnumbered those concerning corporate governance. Proxy Vote.
Financial Stability Board Makes Forex Recommendations
On July 15th, the Financial Stability Board’s Foreign Exchange Benchmarks Group proposed possible recommendations for reform in the foreign exchange market. The recommendations concern the calculation methodology of the WM/Reuters benchmark rates; the publication of reference rates by central banks; market infrastructure in relation to the execution of fix trades; the behavior of market participants around the time of the major FX benchmarks (primarily the WMR 4pm London fix); and recommendations from a forthcoming IOSCO review of the WMR fixes. Comments should be submitted on or before August 12, 2014. FSB Press Release.
San Francisco Fed Analyzes Bank Counterparty Data
On July 14th, the Federal Reserve Bank of San Francisco published an economic letter which analyzes Federal Reserve data gleaned from reports filed by bank holding companies (“BHCs”) with $10 billion or more in assets. The letter examines the nature and diversity of collateral held by BHCs with their trading partners. It finds that, although BHCs have large exposure to banks, most of the collateral involves minimal credit risk and is highly liquid. Conversely, contracts with corporations tend to use more diverse types of collateral, but the volume of these contracts is only one-quarter that of contracts with other banks. Moreover, the exposure to hedge fund counterparties is minimal and is collateralized by safe, liquid instruments.
SIFMA Makes Market Structure Recommendations
On July 14th, the Securities Industry and Financial Markets Association published a set of recommendations on equity market structure. The recommendations address market data dissemination, market complexity and fragmentation, and transparency and disclosure. SIFMA Press Release.