July 14, 2017

An inside look at SIFMA's legislative and regulatory priorities as well as current developments in Washington, D.C.




SIFMA Testifies at DOL Fiduciary Rule Hearing
Jerry Lombard, President of Janney Montgomery Scott LLC's Private Client Group testified on behalf of SIFMA before the House Committee on Financial Services Subcommittee on Capital Markets, Securities, and Investment in a hearing exploring the impact of the DOL Fiduciary Rule on the capital markets. Lombard explained that the right answer for investors is a consistent best interest standard that applies across all types of accounts, but does not have the additional onerous conditions created by the DOL rule. A best interest standard done right by the SEC, the expert agency responsible for broker dealer standards of conduct, would provide protection for retail customers without a bifurcated compliance regime imposed on the same market participants by different regulators. “How switching small retirement savers from a full-service advisor to a "no advice" service desk is in their best interest, I will never understand,” he said.
Oral Statement
Written Testimony
DOL Fiduciary Resource Center

SIFMA Testifies at House Subcommittee Fixed Income Market Structure Hearing
Randy Snook, Executive Vice President at SIFMA, testified before the House Committee on Financial Services Subcommittee on Capital Markets, Securities, and Investment in a hearing entitled “A Review of Fixed Income Market Structure.” The U.S. fixed income markets are truly without parallel with total outstanding debt of nearly $40 trillion dollars. On average $775 billion of securities are traded each and every day. SIFMA believes that policymakers have the ability to enhance economic activity through tailored recalibration of regulations affecting our capital markets. “The cumulative impact of post-crisis reforms must be studied and reconsidered to ensure that our capital markets are providing funding in the most efficient way possible,” said Snook in his testimony. “This is particularly important since private credit extended to households and nonfinancial businesses has grown at a slower pace than in all recoveries in the past 60 years.” This recalibration could help jumpstart the economy without sacrificing financial stability.
Written Testimony

100-Day Talks and U.S.-China Comprehensive Economic Dialogue
The Engage China Coalition, which is chaired by SIFMA president and CEO Kenneth E. Bentsen, Jr., submitted a letter commending the Trump Administration for establishing proactive engagement with China to improve upon the growing bilateral economic relationship. With the conclusion of the 100-day talks, and the U.S.-China Comprehensive Economic Dialogue (CED) on the horizon, the letter urges the Administration to prioritize the reduction of barriers to U.S. financial services exports to China. “We encourage the Administration to continue to work towards a better balanced economic relationship by addressing level playing field issues during the CED, as well as tackling issues that will build more confidence in the investment climate and strengthen market access in China,” said Bentsen. The letter also supports the continued negotiations of the U.S.-China Bilateral Investment Treaty (BIT), which will help secure China’s commitments conveyed during previous bilateral talks and provides important investor protections that will address many existing concerns of the financial services industry.

The Hill Op-Ed: Modern-Day NAFTA Must Account for Modern Financial Services Firms
SIFMA’s Peter Matheson, managing director of international policy & advocacy, explains the need for a modernized North American Free Trade Agreement (NAFTA) that comprehensively includes our nation’s financial services firms. Free and fair trade agreements, like NAFTA, expand opportunities for American companies to compete in global markets. Through them, the Trump administration can meet its stated goals to increase exports, create American jobs and boost U.S. economic growth. A NAFTA modernization can bring our current agreement fully into the 21st century. The U.S. Trade Representative set the negotiation clock ticking on May 18, with a 90-day notification to Congress, which would allow negotiations to begin this summer. SIFMA has made the four recommendations for negotiators to ensure that American financial firms have the maximum opportunity to generate trade and growth through competition based on a level playing field: expand the free flow of goods and services; address the rise of digital protectionism; ensure consistent policies for global financial centers; and create a level playing field for foreign and domestic firms.






House Financial Services Committee Holds a Hearing with Fed Chair Yellen – On Wednesday, July 12, the House Financial Services Committee held a hearing with Federal Reserve Chair Janet Yellen entitled “Monetary Policy and the State of the Economy.” Committee members addressed a number of issues regarding the Fed balance sheet. Yellen explained ways the Fed plans to reduce the balance sheet, including diminishing reinvestments as the Fed receives principle payments on treasuries. Yellen indicated timing is very important, and reducing the balance sheet must be done in a “gradual and predictable way.”  Read More

Senate EPW Committee Holds a Hearing on TIFIA – On Wednesday, July 12, the Senate Environment and Public Works Committee held a hearing on the role that Transportation Infrastructure Finance and Innovation Act (TIFIA) bonds play in funding infrastructure development in the United States. There was a substantial amount of discussion on how to improve TIFIA’s attractiveness as a financing option for small projects, especially in rural areas, given that most TIFIA projects have been in high-density areas. Some of these ideas included bundling smaller projects or developing regional infrastructure plans with dedicated revenue streams to provide a return on private capital. Republican and Democratic Senators expressed support for TIFIA, though there was bipartisan agreement that TIFIA (and private capital generally) would be unable to meet all the nation’s infrastructure needs.  Read More

House Financial Services Subcommittee Holds a Hearing on the DOL Fiduciary Rule’s Impact on the Capital Markets – On Thursday, July 13, the House Financial Services Subcommittee on Capital Markets, Securities, and Investment held a hearing entitled “Impact of the DOL Fiduciary Rule on the Capital Markets.” Rep. Ann Wagner (R-Mo.) asked the panel to discuss how her bill’s best interest standard would build on top of the suitability standard. One panelist noted that it requires a broker dealer to disclose a conflict of interest. Another panelist added that it also asks to uphold a duty of loyalty and care, a higher standard than suitability, and is applicable to all accounts, not just retirement accounts. Wagner then asked if her draft provides a more comprehensive best interest standard than the DOL rule, and all but one on the panel replied yes.  Read More

Senate Banking Committee Holds a Hearing with Fed Chair Yellen – On Thursday, July 13, the Senate Banking Committee held a hearing entitled “The Semiannual Monetary Policy Report to the Congress.” Chairman Mike Crapo (R-Idaho) asked Fed Chair Yellen if she agreed with the principles for housing finance reform that Federal Reserve Governor Jay Powell outlined in remarks he gave on July 6. Yellen said she agreed with those principles, which were: 1) reduce the possibility of future bailouts; 2) make any government guarantee explicit and transparent; 3) increase competition in securitization; 4) use existing regulatory and market infrastructure; and 5) Congress should build on areas of bipartisan support. Yellen agreed with Crapo that Congress needs to act to end the receiverships of Fannie Mae and Freddie Mac.  Read More




Legislative & Regulatory ActiVITY


July 7

The Federal Reserve released its semiannual Monetary Report to Congress.

The Federal Reserve Divisions of Research & Statistics and Monetary Affairs released a Finance and Economics Discussion Paper entitled "The Impact of Price Controls in Two-sided Markets: Evidence from US Debit Card Interchange Fee Regulation."

The Federal Reserve Divisions of Research & Statistics and Monetary Affairs released a Finance and Economics Discussion Paper entitled "How Effective is Monetary Policy at the Zero Lower Bound? Identification Through Industry Heterogeneity."

The OCC released a Report on Semiannual Risk Perspective for Spring 2017, which reports on strategic, credit, operational and compliance risks facing national banks.

July 10
House Financial Services Committee Chairman Jeb Hensarling (R-TX) issued a statement regarding the CFPB's recently released final rule on arbitration clauses.

The CFTC announced that it will be launching a comprehensive review of the swap data reporting regulations found in Parts 43, 45 and 49. Comments due by August 21, 2017.

The FDIC released a Comment Request on a Manual for Processing Deposit Insurance Applications. Comments are due by September 8, 2017.

Federal Reserve Economists Diana Iercosan, Ashish Kumbhat, Michael Ng and Jason Wu published a FEDS Notes article, in three parts (Part 1; Part 2; Part 3), entitled "Trading Activities at Systemically Important Banks."

The Federal Reserve Bank of New York's Research and Statistics Group published a Liberty Street Economics blog post entitled "Just Released: Updated SOMA Portfolio and Income Projections."

July 11

The FDIC issued a press release announcing that it will hold an open meeting on July 18, 2017 at 10:00 a.m. to discuss, among other items, a resolution in regards to a Notice of Proposed Rulemaking on Appraisal Thresholds.

The Federal Reserve released the minutes from its interest rate meetings held on June 5 and June 14, 2017.

Federal Reserve Governor Lael Brainard delivered a speech entitled "Cross-Border Spillovers of Balance Sheet Normalization" at “Normalizing Central Banks' Balance Sheets: What Is the New Normal?”, a conference sponsored by Columbia University's School of International and Public Affairs and the Federal Reserve Bank of New York in New York City.

Federal Reserve Bank of Philadelphia President and CEO Patrick T. Harker delivered a speech entitled "Apprenticeships: Nobility and Necessity" on apprenticeships at the Chemical Heritage Foundation in Philadelphia, Pennsylvania.

The Federal Reserve Bank of New York's Research and Statistics Group published a Liberty Street Economics blog post entitled "How the Fed Changes the Size of Its Balance Sheet: The Case of Mortgage-Backed Securities."

The OCC announced that it will host a Workshop entitled "The Building Blocks for Directors" on August 28-30, 2017 in Kansas City, Missouri to discuss the roles and responsibilities of board participation for bank directors and senior management.

The Financial Industry Regulatory Authority released a Regulatory Notice on the SEC's Approved Rule Change to Reduce the Delay Period for the Corporate and Agency Debt Historic Trade Reporting and Compliance Engine. The rule change is effective October 2, 2017.

FINRA issued a press release announcing the launch of a new requirement to report certain transactions in Treasury securities to FINRA.

July 12

The FDIC, OCC and the Federal Reserve released a joint Financial Institution Letter on the Consolidated Reports of Condition and Income for Second Quarter 2017.

The FDIC's Advisory Committee on Community Banking held a meeting to discuss and provide updates on supervisory issues.

The Federal Reserve released its July 2017 Beige Book on Current Economic Conditions by Federal Reserve District.

Federal Reserve Bank of New York Executive Vice President Simon Potter delivered a speech entitled "The Foreign Exchange Global Code: Lessons Learned and Next Steps" at the 2017 FX Week Conference in New York City.

The GAO released a Report on Improvements Needed in Controls over the Processes Used to Prepare the U.S. Consolidated Financial Statements.

The MSRB released a Regulatory Notice on Implementation Guidance on Confirmation Disclosure and Prevailing Market Price and Amendments to Rules G-15 and G-30. The amendments are effective May 14, 2018.

SEC Chairman Jay Clayton delivered a speech on the SEC's Guiding Principles and Mission at The Economic Club of New York's luncheon in New York City.

SEC Commissioner Kara M. Stein delivered a speech entitled "Lighting Our Capital Markets" at the Healthy Market Structure Conference in Boston, Massachusetts.

The Financial Industry Regulatory Authority released a Regulatory Notice on the Enhanced Confirmation Disclosure Requirements in Rule 2232 for Corporate and Agency Debt Securities. The requirements take effect May 14, 2018.

July 13

Representative Scott Tipton (R-CO) and 30 other members of Congress sent a letter to Treasury Secretary Steven T. Mnuchin requesting that the Treasury improve the coordination and streamline the oversight of Bank Holding Companies, Savings and Loan Holding Companies and their affiliates.

The Federal Housing Finance Agency released a Final Rule on Minority and Women Inclusion Amendments. The rule is effective 30 days after publication in the Federal Register.

The Federal Reserve Divisions of Research & Statistics and Monetary Affairs released a Finance and Economics Discussion Paper entitled "The Federal Reserve’s Portfolio and its Effect on Interest Rates."

The MSRB released a Regulatory Notice on Guidance on Duties of Non-Solicitor Municipal Advisors in Conduit Financing Scenarios.



Introduced Legislation  

House of Representatives

H.R.3179 -- To require the appropriate Federal banking agencies, when issuing certain prudential regulations that are substantively more stringent than a corresponding international prudential standard to publish the rationale for doing so and a cost-benefit analysis of the difference, and for other purposes.

Introduced: July 12, 2017

Sponsor: Trey Hollingsworth (R-Ind)

Action: Referred to the House Financial Services Committee


H.R.3167 -- To provide that, in the event that the Secretary of the Treasury estimates that the debt ceiling will be reached, the Secretary is required to issue GDP-linked bonds to pay the principal and interest on the public debt and the President is authorized to request the rescission of certain unobligated balances and sell certain mortgage-related assets, and for other purposes.

Introduced: July 12, 2017

Sponsor: David Schweikert (R-Ariz)

Action: Referred to House Ways and Means, Budget, Rules, and Financial Services



S.1538 -- A bill to amend the Small Business Act to establish awareness of, and technical assistance for, the creation of employee stock ownership plans, and for other purposes.

Introduced: July 12, 2017

Sponsor: Gary Peters (D-Mich)

Action: Referred to Senate Small Business and Entrepreneurship Committee






Commodity Futures Trading Commission

J. Christopher Giancarlo issued a press release announcing that Daniel Gorfine was named LabCFTC Director and Chief Innovation Officer.

The White House issued a press release announcing that it sent its nomination of Rostin Behnam to the Senate, to be Commissioner of the Commodity Futures Trading Commission for a term expiring June 19, 2021.

Municipal Securities Rulemaking Board

The Municipal Securities Rulemaking Board issued a press release announcing that Michael L. Post was named General Counsel and Gail Marshall was named Chief Compliance Officer.

Federal Reserve

President Donald J. Trump announced his intent to nominate Randal Quarles to be a member of the Board of Governors of the Federal Reserve System for the remainder of a 14-year term expiring January 31, 2018, and for an additional 14-year term expiring January 31, 2032, and to be Vice Chairman for Supervision of the Federal Reserve System for a term of 4 years.






House 2017 Calendar

Senate 2017 Calendar


House and Senate in Session


Monday, July 17, 2017

12:00pm - The Heritage Foundation


“The SEC, Entrepreneurship, and Economic Growth”

1:00pm - Brookings Institution


“6th Annual Municipal Finance Conference”

7:00pm - House Appropriations Committee


“Full Committee Markup: FY2018 Transportation, Housing and Urban Development Appropriations Bill”

Tuesday, July 18, 2017

9:00am - Senate Finance Committee

“Comprehensive Tax Reform: Prospects and Challenges)”

10:00am - House Ways and Means Committee

Trade Subcommittee

“Modernization of the North American Free Trade Agreement (NAFTA)”

10:00am - House Financial Services Committee

Capital Markets, Securities, and Investment Subcommittee

“The Cost of Being a Public Company in Light of Sarbanes-Oxley and the Federalization of Corporate Governance”

10:00am - Senate Banking, Housing, and Urban Affairs Committee

Nomination Hearing

 “Nomination Hearing”

10:00am - FDIC

Board Meeting

11:00am - Senate Finance Committee


“Hearing to Consider the Nomination of David J. Kautter, of Virginia, to be an Assistant Secretary of the Treasury”

2:00pm - House Financial Services Committee

Terrorism and Illicit Finance Committee

“Managing Terrorism Financing Risk in Remittances and Money Transfers”

Wednesday, July 19, 2017


8:30am - Center for Capital Markets Competitiveness


“CFPB’s Anti-Arbitration Rule: Analysis and Implications”

10:00am - House Financial Services Committee

Oversight and Investigations Subcommittee

 “Congressional Oversight of Independent Regulatory Agencies”

2:00pm - House Financial Services Committee

Monetary Policy and Trade Subcommittee

“Restricting North Korea’s Access to Finance”

2:00pm - House Ways and Means Committee

Tax Policy Subcommittee

“How Tax Reform Will Simplify Our Broken Tax Code and Help Individuals and Families”

Thursday, July 20, 2017


10:00am - Senate Banking Committee


“Housing Finance Reform: Maintaining Access for Small Lenders”

Friday, July 21, 2017


3:00 PM - Bipartisan Policy Center


“North American Trade: Examining the Integrated Economy”






Senior Investor Protection Denver Regional Workshop
July 27, 2017 | Denver, CO

Preparing for New FINRA Senior Investor Protection Rules
September 13, 2017 | SIFMA Conference Center, New York, NY

Global Tax Reporting Symposium 

October 3-4, 2017 | New York, NY

SIFMA Annual Meeting, The Capital Markets Conference
October 23-24, 2017 | JW Marriott Washington DC






Please see: GFMA Weekly Update




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