The International Swaps and Derivatives Association, Inc. (ISDA) has announced that its 2014 ISDA Credit Derivatives Definitions will go live from September 2014, creating a challenge for firms to implement the necessary operational and infrastructure changes.
In a press release earlier this month, ISDA highlighted that the revised version of the 2003 ISDA Credit Derivatives Definitions will contain the basic terms used in the documentation of most credit derivatives transactions. Furthermore, the announcement also indicated that the ISDA Credit Steering Committee (CSC) has been working over the past three months with infrastructure providers and clearing houses to develop an appropriate implementation schedule, “including an assessment of the various changes to existing infrastructure that are necessary to support the change.” (more…)
The Financial Industry Regulatory Authority is developing a suite of “big data” information sources and analytics to improve regulatory oversight of securities firms, according to Carlo di Florio, FINRA’s chief risk officer and head of strategy.
Leveraging technology and analytics can make for a “unique moment in regulation [that lets regulators] see things they couldn’t have seen or understood as well before,” di Florio said at an event this week hosted by the Securities Industry and Financial Markets Association compliance and legal society. (more…)
In assessing what to do with collateralized loan obligations under the Volcker rule, regulators have several options, some that are better than others for the banking industry, a leading law firm advised clients on Monday this week. (more…)
The question of which regulator will take the lead in enforcing the complex Volcker rule took center stage this week, as U.S. lawmakers voiced concern over the lack of clear leadership among the five agencies in charge of the statute.
In testimony before the House Financial Services Committee on Wednesday, the heads of the five agencies — the Federal Reserve, Office of the Comptroller of the Currency, Securities Exchange Commission, FDIC, and Commodities Futures Trading Commission – found themselves questioned repeatedly over which agency was at the helm. (more…)
An international study for a bank regulators’ group has found deficiencies in the way banks measured and reported counterparty exposures. But the regulators themselves may share responsibility for the shortcomings, as they have provided little specific guidance for the banks.
The report by the Senior Supervisors Group (SSG) –a forum of senior officials from banking regulatory agencies of several countries– found that 19 participating large banks fall short in some areas of data aggregation and quality. The report was based on the banks’ own self-assessments. (more…)
Last week, representatives of the Securities and Exchange Commission gave the first of many reports concerning its “presence exam” initiative for conducting initial regulatory exams of private advisers, and reported a lower rate of deficiencies compared with regular exams. The panel highlighted exam findings and staff observations concerning investment conflicts, marketing, valuation and custody.
The Dodd-Frank Act required approximately 1,500 private advisers to register with the SEC in 2012 – resulting in a current population of approximately 4,000 registered private advisers. (more…)
By March 31, 2014, applicable group purchasing organizations (GPOs)1 and manufacturers of drugs, devices, biologicals, and medical supplies covered by Medicare, Medicaid, and CHIP2 must report certain payments, transfers of value, and ownership and investment interests involving physicians and teaching hospitals. As required by the Physician Payment Sunshine Act (PPSA), which was enacted as part of the Affordable Care Act (ACA), the Centers for Medicare & Medicaid Services (CMS) published the final rule implementing these reporting requirements on February 8, 2013 (Final Rule).3
The annual reporting requirements provide a mechanism to increase public awareness of potential conflicts of interest on the part of physicians, but not without cost to entities subject to the Final Rule. As the March 31, 2014 deadline approaches, applicable GPOs and manufactures must ensure compliance with the reporting requirements outlined in the Final Rule or risk civil penalties ranging from $1,000 to $1,000,000.
The Securities and Exchange Commission is on track to meet its goal for auditing private advisers that are newly-registered with the SEC under the Dodd-Frank Act , according to the agency’s 2014 examination priorities published this month.
The SEC has made it clear that this initiative remains a priority this year and if a firm has not already been audited, it should prepare by reviewing five focus areas. (more…)
The year 2013 saw a raft of new legislation stemming from regulators worldwide and 2014 looked like the year in which the dust would settle and that compliance professionals could spend focusing on implementing those changes. However, this has not been the case and compliance staff are still operating in a changing environment, where political pressures and cultural inertia mean that it is hard to pause for breath.
This year will still be one of implementation in a world that in some respects has not changed over the past seven years. A number of serious challenges will have to be tackled in 2014. They range from the international reach of the U.S. Foreign Account Tax Compliance Act, the Volcker rule and cross-border derivatives regulations, to the minute complexities of the European Market Infrastructure Regulation.
Read this in-depth special report from Thomson Reuters that looks at an array of regulatory initiatives and their impact on the current global economy and political world. Gain a better understanding of what 2014 will bring to market participants and how businesses should prepare to face the regulatory changes.
Download the Special Report: State of Regulatory Reform 2014.
Banks that have relied over the years on a special type of assets to fulfill their capital requirements may soon have to restructure their investment portfolios to bring it in line with the Volcker rule limiting risky trading by banks. At stake is the treatment of the Trust Preferred Securities (TRuPS), whose inclusion as “investments in entities referred to as covered funds” such as collateralized loan obligations and collateralized debt obligations, would oblige banks to divest them in compliance with the Volcker rule.
The intent behind the complex Volcker rule is clear. It is aimed at limiting the exposure of banks to certain type of “covered funds” such as hedge funds or private equity funds to 3 percent, and to prevent them from engaging in proprietary trading, namely, trading with their customers’ funds for their own short term gains rather than trade on their clients’ behalf. It is, therefore, a rule to make banks’ investments less risky and more transparent. (more…)