With its new offering called Entity Exchange, Bloomberg is trying to take a bite out the market share — especially among hedge fund managers — of the existing utilities for automating know-your-customer requirements. Its strategy: give the buy side more control. Regulators require financial firms to know just who they are doing business with before they […]
Still Holes in New Tax Code for Equity Derivatives?
Foreign fund managers, prime brokers, broker-dealers and banks entering into US equity derivative transactions are facing a taxing operational challenge. Worse, at this point it isn’t entirely clear how it will work. After the US Congress passed enabling legislation in 2010 and the Internal Revenue Service floated several proposed versions of the rules to massive industry […]
Clearing the Decks for Uncleared Swaps Margins
Asset managers might not be affected by the new margin requirements on uncleared swap transactions for at least a year. Nonetheless, they are slowly starting to prepare for the inevitable legal and operational teething pains. US banking regulators and the Commodity Futures Trading Commission (CFTC) have decided that effective September 2016 or March 2017, depending on […]
Research Payments in Europe: Can CSAs Survive?
Asset managers of European funds may be breathing a sigh of relief thinking that European regulators will allow them to keep their commission sharing agreements (CSAs) to pay for research they use to make investment decisions for their clients. The reality is not so simple. As currently implemented, the CSAs may not comply with all […]
Panama Papers Fallout: Heavier KYC/AML Burden(Updated)
(Editor’s Note: After this article went to press, the US Treasury said it had adopted a rule requiring banks, broker-dealers, mutual funds, futures commission merchants and introducing brokers in commodities to collect and verify information on beneficial owners. The Treasury also sent to Congress legislation to approve requiring that companies formed in the US file […]
Transfer Agents, Brokers, DTC Debate SEC’s Proposed Rules
The Securities and Exchange Commission’s decision to overhaul the rules governing transfer agents has prompted a debate among shareholder recordkeepers on the one hand and broker-dealers and their allies on the other. It could easily take up to a year for any new requirements to take effect, However, transfer agents for equities and investment funds […]
FINRA: Making Compliance a Way of Life
Culture of compliance. Those three words recently uttered by the US Financial Industry Regulatory Authority (FINRA) as being one of its priorities during its exam process this year hasn’t exactly taken broker-dealers or their legal counsel by surprise. After all, broker-dealers know they have to fulfill regulatory requirements. Yet the term is generating plenty of […]
US Braces for Testing T+2 Preparedness (Updated)
(Editor’s Note: After the publication of this article, DTCC published a document which outlines the testing requirements from its subsidiaries NSCC, DTC and Omgeo for impacted organizations and instruments. The paper entitled “T+2 Test Approach: DTCC’s High-Level Testing Framework” can be found here). Testing, testing, testing. That is the next critical focus for achieving a successful transition […]
Investment Fund Transfer Agents: Forget About Monitoring Brokers
The US Securities and Exchange Commission has the right intention in wanting to update its outdated rules for transfer agents, say investment funds transfer agents and their legal counsel, but its approach in regulating shareholder recordkeepers of buy-side firms may be flawed. Among the growing list of concerns is whether investment fund transfer agents might […]
Syndicated Loans Market: An Evolution is Coming
Nineteen days and counting. That’s the average time it takes to settle a US syndicated loan. It’s a far cry from the two or three days for other asset classes, but fund managers, broker-dealers, agent banks and even regulators are waking up to the fact the gap must be closed to reduce risks and costs. […]