Pennsylvania + Wall


Pennsylvania + Wall provides commentary on a broad range of current financial, economic and regulatory reform topics. The views expressed are those of the authors, and do not necessarily reflect the position of SIFMA.

July 14, 2014

NYT Dealbook OpEd: How to Improve Market Structure

By Curt Bradbury and Kenneth E. Bentsen Jr.

Arrows - Market StructureIn the following op-ed, originally published in the New York Times' DealBook, Curt Bradbury, Chief Operating Officer, Stephens Inc. and Chairman of SIFMA's board-level Market Structure Task Force, and Kenneth E. Bentsen Jr., SIFMA's President and CEO, share task force recommendations developed with the goal of enhancing transparency, providing fair and timely access to market data, and addressing the complexity and fragmentation caused by rebates and order types.  

The United States has the deepest and most liquid stock market in the world. Over the last decade, regulation, technological advancements and competition have created an equity market structure that is easier to access and far more affordable for investors, including retail investors. The result is a strong market system that helps Americans achieve financial security and provides companies with access to the capital they need to grow and create jobs.

These same factors that have benefited investors – technology, regulation, and competition – have also led to a market structure that is increasingly complex and fragmented. Much of the focus has been on speed of trading, the product of technological innovation. And while the markets are most certainly not “rigged,” and unquestionably less expensive in terms of commissions and spreads, this complexity and fragmentation has resulted in disparate treatment that is undermining investor trust and confidence. Failure to address declining trust will ultimately undermine the market itself.

 ....

June 27, 2014

SIFMA’s Views on the Department of Labor’s Fiduciary Proposal

By Lisa Bleier

DOL, Fiduciary, ERISA, RetirementWe offer the following as a clarification a clarification and reiteration of SIFMA's views on the Department of Labor's fiduciary proposal, offered in response to recent mischaracterizations of our views. 

The DOL's proposal would convert virtually anyone who speaks to a retirement investor into a "fiduciary," subject to a costly and complicated regulatory regime that was never intended to apply so broadly.  Everyday Americans trying to save for retirement would lose their ability to decide whether to work with, and pay for, a fiduciary investment adviser.  Instead, if they wanted to continue to be able to talk to their brokers, they would have no choice but to move to higher cost fee-based advisory accounts.  The smallest investors, who could not afford higher fees, would be left on their own.

In the Dodd-Frank Act, Congress directed the SEC to review the standard of conduct applicable to all retail investors.  Consistent with this mandate, the SEC has undertaken a careful review that included a comprehensive "request for information."  We support the SEC's efforts, and we do not understand why the DOL wants to jump the gun by proposing its rule before the SEC has a chance to complete its work. .... Read more...

June 25, 2014

SIFMA Applauds Secretary Lew’s Commitment to a Global LEI

By David Strongin

LEIA global Legal Entity Identifier (LEI) is one of the most critical methods available to ensure effective regulatory oversight of the financial markets. In testimony yesterday before the House Committee on Financial Services, U.S. Treasury Secretary and Chair of the Financial Stability Oversight Council (FSOC) Jack Lew noted:

"There has also been progress in improving the standardization of certain financial data, including the legal entity identifier (LEI), which will help to identify parties to financial transactions. The widespread adoption of LEI both domestically and globally, together with the work to enhance the consistency and availability of swaps data reported by swaps data repositories, would improve the ability of regulators to monitor emerging risks in the financial system. The Council supports these efforts and recommends that member agencies and the OFR continue to work together to promote high-quality data standards and fill data gaps where they exist.".... Read more...

May 09, 2014

Helping American Investors Save for Retirement

By Kenneth E. Bentsen, Jr.

Ken BentsenIn the following op-ed, originally published in U.S. News, SIFMA’s President and CEO writes that a new proposal being drafted by the Department of Labor (DOL) could have an unintended negative impact that would make it harder for Americans to meet their retirement goals.

I am writing in response to Jim Lardner's May 6, 2014 op-ed entitled "When Salespeople Call Themselves Advisors" in order to address some of the misconceptions and inaccuracies regarding the industry's position.

When helping Americans save for retirement, investment professionals work hard every day to serve in their client's best interest. In return, their clients trust them to act on their behalf in a way that is suitable for their individual retirement needs. Each day, millions of Americans rely on broker-dealers to help them save for their future. Studies have shown that investors who work with an investment professional save more and are better prepared for retirement..... Read more...

May 07, 2014

Asset Managers Do Not Pose Systemic Risk

By Timothy W. Cameron

Asset ManagersOn Thursday, Jacob Lew, Treasury Secretary and head of the FSOC, will testify before the House Financial Services Committee to talk about systemic risk in the international financial system.  It's vital that this discussion address the unique characteristics of asset management firms and how they are different from banks.

In April of 2012, the FSOC published a rule on the process for designating non-bank financial institutions as systemically important - so called SIFI designation. This framework - which was essentially a list of factors most pertinent to the banking industry - was not supported by extensive research, nor did it contain an approach tailored toward the targeted entities' business model. SIFMA's Asset Management Group is very concerned with the notion that asset managers and/or the funds they manage could be designated as SIFIs and, therefore, subject to prudential or bank-like regulation that could stifle their ability to serve individual investors..... Read more...

April 30, 2014

SIFMA Business Continuity Planning Tests and Exercises: 2014 Dates Announced

By Karl Schimmeck

SIFMA Business Continuity Planning Tests and Exercises Command Center This week, over 800 operations leaders from the financial services industry gathered in Boca at Ops 2014. Important conversations were held around shortening the settlement cycle, implementing money market reform, combating cyber attacks and more. The crowd favorite was definitely Rudy Giuliani, who said "relentless preparation" is needed for effective crisis management..... Read more...

April 30, 2014

Labor Department Proposal Could Limit Choice for Retirement Investors

By Kenneth E. Bentsen, Jr.

Ken Bentsen In the following op-ed, originally published in The Hill, SIFMA’s President and CEO argues that a pending proposal from the Department of Labor (DOL) could soon limit investor choice, restrict access to guidance, and raise the cost of saving for retirement.

Every day, millions of Americans work with investment professionals to help them plan for retirement.  At a time when our nation faces a looming retirement crisis, this relationship is more important than ever.  Unfortunately, the Department of Labor (DOL) could soon jeopardize this vital relationship with a proposal that could limit investor choice, restrict access to guidance, and raise the cost of saving for retirement. .... Read more...

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