Regulatory Update

SIFMA files amicus brief in Enron v. ING to defend the finality of commercial paper trades on DTC

SIFMA’s amicus brief defends the district court decision – which establishes the immunity from later bankruptcy attack of securities settlements made with distressed borrowers on clearing houses such as the DTC. Establishing the finality of trading on DTC is critical to our members and our industry, given the millions of “settlement payments” that settle on New York’s clearing houses each day. To read the amicus brief, click here.

SIFMA Files Amicus Brief in Fisher v. JPMorgan Chase

SIFMA filed an amicus brief in federal circuit court in the case of Fisher v. JPMorgan Chase. SIFMA’s brief argues that ERISA plan fiduciaries may not be sued for allowing an ERISA plan to offer employer stock when the plan requires it to do so. A ruling to the contrary would undermine Congress’s longstanding encouragement of employer stock funds and threaten their very existence as an investment alternative for 401(k) participants. SIFMA previously addressed this same issue in our March and July 2010 amicus briefs in Citigroup ERISA Litigation, and Gearren v. The McGraw Hill Companies, respectively. To read the amicus brief, click here.

SIFMA Files Second Comment Letter on Proposed Elimination of Flash Order Exception

SIFMA believes that flash orders are beneficial to options investors, especially retail options investors. We believe that a broad ban on flash orders would not only deprive investors who use them of those benefits, but we also believe that such a ban could have significant adverse consequences for the options markets generally by decreasing competition and liquidity and increasing volatility.  SIFMA Comment Letter

SIFMA Submits Comments to SEC on Dodd-Frank Act Provision on GASB Funding

In anticipation of the GAO’s work, SIFMA believes it would be inappropriate for the SEC to act on the authority provided under Section 978 of the Act before the study is completed. The GAO’s research will surely provide important information and conclusions to inform the SEC’s consideration of GASB funding issues, and we urge the SEC to withhold any action on GASB funding until after the GAO has completed its work. SIFMA Comment Letter

SIFMA Supportive of GSE Reform Which Preserves Benefits to Consumers and the Economy

SIFMA expressed its support for some form of continued government support for the mortgage finance industry. Without the benefit of government support, SIFMA believes mortgage credit would be both less available and more expensive, making it more difficult for consumers to obtain loans and realize the goal of home ownership while dampening the economic benefits provided by a robust housing market.  Comment Letter

SIFMA Comment Letter on Obtaining and Retaining Beneficial Ownership Information

SIFMA filed a comment letter with the SEC and FinCEN regarding the March 5, 2010 Guidance on Obtaining and Retaining Beneficial Ownership Information.  SIFMA has significant concerns that the Guidance does not reflect the current BSA requirements of securities and futures firms, and is not appropriately tailored to the specific customer types, products and services of such financial institutions. We therefore request a meeting with representatives from FinCEN, the SEC and the CFTC to begin a dialogue about providing separate, revised guidance to securities and futures firms. SIFMA Letter

SIFMA Comment Letter on Proposed Rule Change to Arbitrator List Selection

SIFMA filed a comment letter with the SEC on the proposed rule change to the arbitrator list selection, File No. SR-FINRA-2010-022. The proposed rule change would increase the number of arbitrators available for selection when parties pick arbitration panels from eight to ten, while retaining the number of available strikes at four per party. SIFMA supports this change because we believe it will increase the likelihood that all arbitrators appointed to a case will have been selected by the parties, result in fewer administrative “extended list” appointments, and enhance party choice and satisfaction with the selection process. SIFMA Letter

SIFMA Files Amicus Briefs in a Pair of New York Martin Act Cases

SIFMA filed identical amicus briefs in a pair of New York state cases that raise the issue of whether New York’s Martin Act precludes private plaintiffs from bringing common law non-fraud tort claims against their investment managers. SIFMA, supported by numerous state and federal decisions, answers this question yes. These cases demonstrate that investments in securities don’t always yield the results that investors hoped for. As a result, SIFMA’s members are often sued by disappointed investors. In the rare event that the defendant engaged in fraud or breached its contract, New York courts allow investors to sue in state court. But where, as in these cases, the claim is essentially that the investment manager should have done a better job of anticipating the swings in the market – whether it be called negligence or breach of fiduciary or whatever – New York courts must disallow such claims, which would otherwise seriously chill investment management activity. SIFMA Briefs 

Regulatory Outlook

Regulatory Action Database: Dodd-Frank Wall Street Reform and Consumer Protection Act

SIFMA embarks on an unprecedented period of advocating for our members on numerous significant and simultaneous rule-makings. In preparation for this huge undertaking, we have created a database of the expected rule-making agenda. View Database

SIFMA Statement on Enactment of Dodd-Frank Act

“Today’s enactment of the Dodd-Frank Act marks an important step forward for America’s financial markets and its economy. We believe that a number of key provisions in the legislation will restore confidence and much needed stability to the markets and modernize our regulatory structure. As regulators now begin work on writing more than 250 rules required by the legislation, we’ll be working with each regulatory institution to ensure they strike the right balance between fair and full implementation of the law while not hindering the industry’s ability to finance economic growth and job creation. As an industry, we must also begin the hard work of communicating what these changes will mean for the American families, investors and businesses who are our clients.”

Tim Ryan on CNBC

SIFMA’s President & CEO, Tim Ryan, appeared on CNBC speaking from SIFMA’s Regulatory Reform Summit in NYC July 15th. View Video and Highlights from SIFMA's Regulatory Reform Summit.

Dodd-Frank Wall Street Reform and Consumer Protection Act

As the financial reform legislation moves closer towards final passage, we are pleased to provide SIFMA members with links to a summary of the conference results prepared by the House Financial Services Committee, along with a blackline of the final conference text against the base text prepared by Davis, Polk and Wardwell.

See also: DPW summaries addressing the following key topics in the Dodd-Frank Act: the swaps pushout provision, the Collins amendment, the Volcker Rule and fiduciary duty for personalized investment advice for retail customers. SIFMA Members: Listen to the June 28 Member Call

View DPW's Summary of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Regulatory Implementation Slides.

Tim Ryan on Financial Reform Conference Agreement
SIFMA issued a statement from President and CEO Tim Ryan on the conclusion of the House-Senate conference on financial regulatory reform legislation.  Press Release

Systemic Risk Study
SIFMA released the results of a study, produced together with Deloitte & Touche, intended to assist regulators and policymakers in preparing for expanded systemic risk oversight and enhance their ability to respond to potential future systemic risk events. The guidance is aimed at supporting the financial industry's efforts to foster financial stability and accommodate the information needs of a systemic risk regulator. Read the study and the associated press release.  

John Taft, SIFMA Chair-Elect, Discusses Reg Reform on CNBC
John Taft, SIFMA Chair-Elect and President and Chief Executive Officer of RBC Wealth Management, discusses various legislative proposals currently being debated within the House-Senate Conference, including the Volcker Rule and derivatives provisions. Watch the clip now on CNBC’s Squawk Box.  

Tim Ryan on CNBC
SIFMA’s President & CEO, Tim Ryan, appeared on CNBC to discuss the financial regulatory reform legislation passed in the Senate. The industry supports the Bill’s original goal of enhancing risk regulation, but is concerned unintended negative consequences may arise from several provisions in the current legislation. Video

Financial Reform Side-by-Side Comparison Chart - Key Senate and House Bill Issues

Industry experts from the law firm of Davis, Polk and Wardwell have made their recent client memorandum, “Financial Reform Side-by-Side Comparison Chart - Key Senate and House Bill Issues”, available to SIFMA members. It compares each major section of the Restoring American Financial Stability Act of 2010, passed by the Senate on May 20, 2010, and the Wall Street Reform and Consumer Protection Act of 2009, passed by the House on December 11, 2009.  Click Here 

SIFMA Introduces New Advocacy and Educational Website!
Visit www.investedinamerica.org and www.capitolinterest.org to learn more. Hear from John Taft, Head of U.S. Wealth Management at RBC Capital Markets and SIFMA Chair-elect, regarding the importance of staying informed as the financial regulatory reform debate progresses in Washington.  

"The Ultimate Guide to Teaching Finances"
May 27th Converge Magazine Article by Tanya Roscorla talks about SIFMA's Stock Market Game. The Stock Market Game, created by the SIFMA Foundation for Investor Education, is one of a number of activities educators, parents and financial industry professionals use to help students improve their knowledge of the financial world. Read Article