Press Release
ICE Trade Vault Prepares Energy and Commodities Data Repository for 2012 Launch
ATLANTA, Nov. 7, 2011 /PRNewswire/ -- IntercontinentalExchange (NYSE: ICE), a leading operator of global regulated futures exchanges, clearing houses and over-the-counter (OTC) markets, announced today that it has applied to register its ICE Trade Vault service as a swap data repository (SDR) with the Commodity Futures Trading Commission (CFTC).
(Logo: http://photos.prnewswire.com/prnh/20090727/CL51999LOGO )
"ICE appreciates that regulators have initially focused on trade reporting and recordkeeping in OTC derivatives markets while implementing the Dodd-Frank Wall Street Reform Act," said Chuck Vice, President and Chief Operating Officer of IntercontinentalExchange. "ICE Trade Vault will provide reporting compliance for our global customer base through a widely-accepted, proven method for capturing and reporting commodity trade data."
ICE eConfirm will serve as the front-end application for the ICE Trade Vault SDR under the Dodd-Frank Act. ICE Trade Vault is slated to launch in the first half of 2012. The combination of ICE Trade Vault and ICE eConfirm will streamline reporting by employing processes and systems already in use by the industry. Participants in the commodity markets will be able to use the ICE eConfirm platform to submit non-cleared trades and end-user clearing exemptions in order to comply with new reporting requirements.
ICE Trade Vault is designed to deliver to market participants a cost-effective, easy-to-use, open access service that builds on ICE's deep expertise across commodity markets, including energy and agricultural products. In applying for registration, ICE detailed extensive capabilities to perform as a SDR in accordance with core principles identified by the CFTC and the Dodd-Frank Act.
About IntercontinentalExchange
IntercontinentalExchange (NYSE: ICE) is a leading operator of regulated futures exchanges and over-the-counter markets for agricultural, credit, currency, emissions, energy and equity index contracts. ICE Futures Europe hosts trade in half of the world's crude and refined oil futures. ICE Futures U.S. and ICE Futures Canada list agricultural, currencies and Russell Index markets. ICE is also a leading operator of central clearing services for the futures and over-the-counter markets, with five regulated clearing houses across North America and Europe. ICE serves customers in more than 70 countries. www.theice.com
The following are trademarks of IntercontinentalExchange, Inc. and/or its affiliated companies: IntercontinentalExchange, ICE, ICE and block design, ICE Futures Europe and ICE Clear Europe. All other trademarks are the property of their respective owners. For more information regarding registered trademarks owned by IntercontinentalExchange, Inc. and/or its affiliated companies, see https://www.theice.com/terms.jhtml
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 - Statements in this press release regarding IntercontinentalExchange's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the SEC on February 9, 2011 and ICE's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, as filed with the SEC on August 3, 2011.
Tampilkan postingan dengan label dodd-frank act. Tampilkan semua postingan
Tampilkan postingan dengan label dodd-frank act. Tampilkan semua postingan
Senin, 07 November 2011
Jumat, 03 Juni 2011
FDIC Board Creates Advisory Committee on Systemic Resolutions
FDIC Board Advisory Committee on Systemic Resolutions First Meeting Scheduled for June 21st in Washington, D.C.
FOR IMMEDIATE RELEASE
June 3, 2011
Media Contact:
Michele Heller (202) 898-3679
mheller@fdic.gov
The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) has approved the creation of the FDIC Advisory Committee on Systemic Resolutions to provide advice and guidance on a wide range of issues regarding the resolution of large, systemically important institutions. The FDIC gained the authority to resolve such institutions with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act on July 21, 2010.
"Congress has given the FDIC a tremendous amount of responsibility to ensure that financial organizations formerly deemed too big to fail will no longer receive taxpayer funded bailouts," said FDIC Chairman Sheila C. Bair. "The Advisory Committee we created brings together some of the best and brightest minds to augment the groundwork that the FDIC has already put in to place to handle an extremely large and complex failure. I am very pleased with the caliber of people who have agreed to serve on this important committee."
The Committee was formed to advise the FDIC on the effects on financial stability and economic conditions from a systemically important company's failure; how resolution strategies would affect stakeholders and customers of these entities; the tools available to the FDIC to wind down the operations of a failed organization; and the tools needed to assist in cross-border relations with foreign regulators and governments when a systemic company has international operations.
James R. Wigand, Director, Office of Complex Financial Institutions has been named the Designated Federal Officer for the Advisory Committee. The committee, which will not have formal decision-making authority, has a two-year charter. The Committee is expected to meet at least semiannually.
The first meeting is scheduled for June 21 at the FDIC's Washington, D.C., headquarters located at 550 17th Street, N.W.
The 18 committee members have a wide range of knowledge and experience, including managing complex firms; administering bankruptcies; working in the legal system, accounting field, and academia; and other relevant expertise.
The Advisory Committee Members are:
* Anat R. Admati
* Michael Bodson
* Charles A. Bowsher
* Michael Bradfield
* H. Rodgin Cohen
* William H. Donaldson
* Peter R. Fisher
* Janine Guillot
* Richard J. Herring
* Simon Johnson
* Donald Kohn
* John Koskinen
* Jerry Patchan
* Raghuram G. Rajan
* John S. Reed
* Deven Sharma
* Gary Stern
* Paul A. Volcker
# # #
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,575 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-99-2011
FOR IMMEDIATE RELEASE
June 3, 2011
Media Contact:
Michele Heller (202) 898-3679
mheller@fdic.gov
The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) has approved the creation of the FDIC Advisory Committee on Systemic Resolutions to provide advice and guidance on a wide range of issues regarding the resolution of large, systemically important institutions. The FDIC gained the authority to resolve such institutions with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act on July 21, 2010.
"Congress has given the FDIC a tremendous amount of responsibility to ensure that financial organizations formerly deemed too big to fail will no longer receive taxpayer funded bailouts," said FDIC Chairman Sheila C. Bair. "The Advisory Committee we created brings together some of the best and brightest minds to augment the groundwork that the FDIC has already put in to place to handle an extremely large and complex failure. I am very pleased with the caliber of people who have agreed to serve on this important committee."
The Committee was formed to advise the FDIC on the effects on financial stability and economic conditions from a systemically important company's failure; how resolution strategies would affect stakeholders and customers of these entities; the tools available to the FDIC to wind down the operations of a failed organization; and the tools needed to assist in cross-border relations with foreign regulators and governments when a systemic company has international operations.
James R. Wigand, Director, Office of Complex Financial Institutions has been named the Designated Federal Officer for the Advisory Committee. The committee, which will not have formal decision-making authority, has a two-year charter. The Committee is expected to meet at least semiannually.
The first meeting is scheduled for June 21 at the FDIC's Washington, D.C., headquarters located at 550 17th Street, N.W.
The 18 committee members have a wide range of knowledge and experience, including managing complex firms; administering bankruptcies; working in the legal system, accounting field, and academia; and other relevant expertise.
The Advisory Committee Members are:
* Anat R. Admati
* Michael Bodson
* Charles A. Bowsher
* Michael Bradfield
* H. Rodgin Cohen
* William H. Donaldson
* Peter R. Fisher
* Janine Guillot
* Richard J. Herring
* Simon Johnson
* Donald Kohn
* John Koskinen
* Jerry Patchan
* Raghuram G. Rajan
* John S. Reed
* Deven Sharma
* Gary Stern
* Paul A. Volcker
# # #
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,575 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-99-2011
Selasa, 12 April 2011
CFTC Issues Notice Of Proposed Rulemaking On Swap Data Record Keeping And Reporting Requirements For Pre-Enactment And Transition Swaps
Press Release
Washington, DC – The Commodity Futures Trading Commission (“CFTC”) today announced that it has proposed rules establishing swap data recordkeeping and reporting requirements for counterparties to pre-enactment swaps (those executed prior to enactment of the Dodd-Frank Act) and transition swaps (those entered into between the enactment date and the future effective date for final rules concerning swap recordkeeping and reporting). A Notice of Proposed Rulemaking, Swap Data Recordkeeping and Reporting Requirements: Pre-Enactment and Transition Swaps, has been submitted to the Federal Register and will be published shortly.
The proposed rule provides clarity concerning what records must be kept and what data must be reported to swap data repositories with respect to these historical swaps. The rule proposes limited recordkeeping requirements for counterparties to historical swaps. For swaps in existence on or after the date of publication of the proposed rule, counterparties would be required to keep records of specified, minimum primary economic terms for the swaps.
The proposed rule is also designed to ensure that data needed by regulators concerning historical swaps is available to regulators through swap data repositories (“SDRs”) beginning on the effective date for swap data reporting.
Washington, DC – The Commodity Futures Trading Commission (“CFTC”) today announced that it has proposed rules establishing swap data recordkeeping and reporting requirements for counterparties to pre-enactment swaps (those executed prior to enactment of the Dodd-Frank Act) and transition swaps (those entered into between the enactment date and the future effective date for final rules concerning swap recordkeeping and reporting). A Notice of Proposed Rulemaking, Swap Data Recordkeeping and Reporting Requirements: Pre-Enactment and Transition Swaps, has been submitted to the Federal Register and will be published shortly.
The proposed rule provides clarity concerning what records must be kept and what data must be reported to swap data repositories with respect to these historical swaps. The rule proposes limited recordkeeping requirements for counterparties to historical swaps. For swaps in existence on or after the date of publication of the proposed rule, counterparties would be required to keep records of specified, minimum primary economic terms for the swaps.
The proposed rule is also designed to ensure that data needed by regulators concerning historical swaps is available to regulators through swap data repositories (“SDRs”) beginning on the effective date for swap data reporting.
Rabu, 05 Januari 2011
Federal Consumer Agency to Partner with State Regulators on Supervision of Providers of Consumer Financial Products and Services
U.S. Department Of The Treasury Press Release
WASHINGTON – The Consumer Financial Protection Bureau (CFPB) implementation team currently housed within the US Department of the Treasury and the Conference of State Bank Supervisors (CSBS) today signed a memorandum of understanding (MOU) to establish a foundation of state and federal coordination and cooperation for supervision of providers of consumer financial products and services.
Specifically, state regulators and the CFPB will endeavor to promote consistent examination procedures and effective enforcement of state and federal consumer laws and to minimize regulatory burden and efficiently deploy supervisory resources. Further, the MOU provides that state regulators and the CFPB will consult each other regarding the standards, procedures, and practices used by state regulators and the CFPB to conduct compliance examinations of providers of consumer financial products and services, including non-depository mortgage lenders, mortgage servicers, private student lenders, and payday lenders.
The consumer financial protection regime established by the Dodd-Frank Wall Street Reform and Consumer Protection Act strikes a constructive balance between federal and state regulation of firms offering many of the financial products families rely on every day. This MOU is an important step in implementing this balance and provides a starting point for additional state agreements as the states and the CFPB work to fulfill their mandates. Whether shopping for a mortgage for their first home or exploring possibilities to finance their child’s education, consumers will benefit from this partnership as the CFPB and CSBS coordinate efforts to enforce applicable federal and state law and to protect consumers. For the first time, a federal agency with the sole job of looking out for consumers as they interact with the financial system will work with state regulators to review businesses’ practices and ensure that firms that provide consumer financial products, such as mortgages, are following the law.
“The new consumer financial agency and the state banking regulators are forging an alliance to protect American families,” said Elizabeth Warren, special advisor to the Secretary of the Treasury on the CFPB. “This agreement allows us to bring thousands of financial service providers out of the shadows and to begin the process of ensuring that all lenders comply with the same basic rules.”
"Today is an important day for financial supervision," said Thomas Gronstal, Chairman of CSBS. "The formalized coordination between the states and the federal government established by the MOU will do much to create a comprehensive and seamless system of financial supervision and is a step toward a more cooperative system of supervision, which will benefit consumers and financial services providers alike."
WASHINGTON – The Consumer Financial Protection Bureau (CFPB) implementation team currently housed within the US Department of the Treasury and the Conference of State Bank Supervisors (CSBS) today signed a memorandum of understanding (MOU) to establish a foundation of state and federal coordination and cooperation for supervision of providers of consumer financial products and services.
Specifically, state regulators and the CFPB will endeavor to promote consistent examination procedures and effective enforcement of state and federal consumer laws and to minimize regulatory burden and efficiently deploy supervisory resources. Further, the MOU provides that state regulators and the CFPB will consult each other regarding the standards, procedures, and practices used by state regulators and the CFPB to conduct compliance examinations of providers of consumer financial products and services, including non-depository mortgage lenders, mortgage servicers, private student lenders, and payday lenders.
The consumer financial protection regime established by the Dodd-Frank Wall Street Reform and Consumer Protection Act strikes a constructive balance between federal and state regulation of firms offering many of the financial products families rely on every day. This MOU is an important step in implementing this balance and provides a starting point for additional state agreements as the states and the CFPB work to fulfill their mandates. Whether shopping for a mortgage for their first home or exploring possibilities to finance their child’s education, consumers will benefit from this partnership as the CFPB and CSBS coordinate efforts to enforce applicable federal and state law and to protect consumers. For the first time, a federal agency with the sole job of looking out for consumers as they interact with the financial system will work with state regulators to review businesses’ practices and ensure that firms that provide consumer financial products, such as mortgages, are following the law.
“The new consumer financial agency and the state banking regulators are forging an alliance to protect American families,” said Elizabeth Warren, special advisor to the Secretary of the Treasury on the CFPB. “This agreement allows us to bring thousands of financial service providers out of the shadows and to begin the process of ensuring that all lenders comply with the same basic rules.”
"Today is an important day for financial supervision," said Thomas Gronstal, Chairman of CSBS. "The formalized coordination between the states and the federal government established by the MOU will do much to create a comprehensive and seamless system of financial supervision and is a step toward a more cooperative system of supervision, which will benefit consumers and financial services providers alike."
Senin, 13 Desember 2010
Federal Reserve Board Proposes Rules To Expand Coverage Of Consumer Protection Regulations To Areas Including Credit Transactions
Press Release
Release Date: December 13, 2010
For immediate release
The Federal Reserve Board on Monday proposed two rules that would expand the coverage of consumer protection regulations to credit transactions and leases of higher dollar amounts.
The proposed rules would amend Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) to implement a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Effective July 21, 2011, the Dodd-Frank Act requires that the protections of the Truth in Lending Act (TILA) and the Consumer Leasing Act (CLA) apply to consumer credit transactions and consumer leases up to $50,000, compared with $25,000 currently. This amount will be adjusted annually to reflect any increase in the Consumer Price Index.
TILA requires creditors to disclose key terms of consumer loans and prohibits creditors from engaging in certain practices with respect to those loans. Currently, consumer loans of more than $25,000 are generally exempt from TILA. However, private education loans and loans secured by real property (such as mortgages) are subject to TILA regardless of the amount of the loan.
The CLA requires lessors to provide consumers with disclosures regarding the cost and other terms of personal property leases. An automobile lease is the most common type of consumer lease covered by the CLA. Currently, a lease is exempt from the CLA if the consumer's total obligation exceeds $25,000.
The notices that will be published in the Federal Register are attached. Comments on the proposals must be submitted by the later of 30 days after publication in the Federal Register or February 1, 2011.
Release Date: December 13, 2010
For immediate release
The Federal Reserve Board on Monday proposed two rules that would expand the coverage of consumer protection regulations to credit transactions and leases of higher dollar amounts.
The proposed rules would amend Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) to implement a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Effective July 21, 2011, the Dodd-Frank Act requires that the protections of the Truth in Lending Act (TILA) and the Consumer Leasing Act (CLA) apply to consumer credit transactions and consumer leases up to $50,000, compared with $25,000 currently. This amount will be adjusted annually to reflect any increase in the Consumer Price Index.
TILA requires creditors to disclose key terms of consumer loans and prohibits creditors from engaging in certain practices with respect to those loans. Currently, consumer loans of more than $25,000 are generally exempt from TILA. However, private education loans and loans secured by real property (such as mortgages) are subject to TILA regardless of the amount of the loan.
The CLA requires lessors to provide consumers with disclosures regarding the cost and other terms of personal property leases. An automobile lease is the most common type of consumer lease covered by the CLA. Currently, a lease is exempt from the CLA if the consumer's total obligation exceeds $25,000.
The notices that will be published in the Federal Register are attached. Comments on the proposals must be submitted by the later of 30 days after publication in the Federal Register or February 1, 2011.
Selasa, 16 November 2010
SIFMA Supports Regulatory Changes for Securitization to Revive Market
Press Release Date: November 16, 2010
Contact: Katrina Cavalli, 212.313.1181
kcavalli@sifma.org
SIFMA Supports Regulatory Changes for Securitization to Revive Market
New York, NY, November 16, 2010–In two comment letters filed yesterday, SIFMA expressed its support for regulatory changes in disclosure of repurchase requests and due diligence proposed by the Securities and Exchange Commission (SEC) under the Dodd-Frank Act which will help revive the securitization market by enhancing transparency and rebuilding investor confidence. SIFMA is particularly supportive of proposed changes which will allow investors to make more informed investment decisions and facilitate the recovery of the securitization markets. In SIFMA’s view, however, some proposals could have unintended consequences that will impede the renewal of securitization activity and therefore economic recovery.
“Our comments on these important issues reflect SIFMA’s goal of restoring capital flows to the securitization markets and increasing the availability of affordable credit to American consumers and small businesses. Improving disclosure regarding repurchase requests and due diligence in asset-backed securities is an important step towards restoring a functioning, thriving, liquid and efficient securitization marketplace,” said Richard Dorfman, managing director and head of SIFMA’s Securitization Group. “We urge the SEC to very carefully consider the implications of new regulations to ensure that the new rules support the long term health of this essential tool for our economy.”
In its comment letter focused on due diligence, SIFMA:
* Supports the proposal to require an issuer of registered asset-backed securities or a third party designated by the issuer to perform a review of the assets underlying the securitized pool.
* Recommends a third party conducting a due diligence review not be named an “expert,” as the liability associated with that designation could limit the availability of these types of services, thus denying the securitization industry’s access to the valuable due diligence provided by these types of firms.
* Expresses its belief that it would be unwise for the SEC to delineate granular minimum standards for diligence reviews, given the complexity of this task and the short time frame allotted in Dodd-Frank for rule promulgation, and asks the SEC to observe disclosure practices before making a determination that granular standards should be mandated.
* Recommends the proposal exclude asset-backed commercial paper conduits as well as foreign offered asset-backed securities.
In its comment letter focused on disclosure relating to fulfilled and unfulfilled repurchase requests, SIFMA:
* Recommends that rules requiring disclosure of repurchase requests apply to outstanding asset-backed securities of a single class, and that asset-backed commercial paper, collateralized debt obligations, resecuritizations and foreign offered asset-backed securities be excluded from the proposed rule.
* Notes that the definition of securitizer should be applied solely to Fannie Mae or Freddie Mac and not the financial institution transferring loans to Fannie Mae or Freddie Mac.
Suggests that any retrospective disclosure requirement should not carry with it strict liability, given the challenges that sponsors and trustees will face in gathering historic data for which there may not have been retention and reporting policies and procedures in place.
* Requests a definition of what constitutes a “repurchase request”.
* Recommends quarterly filing of repurchase request disclosure forms, with Regulation AB disclosures presented in the same format as non-Regulation AB disclosures.
-30-
Contact: Katrina Cavalli, 212.313.1181
kcavalli@sifma.org
SIFMA Supports Regulatory Changes for Securitization to Revive Market
New York, NY, November 16, 2010–In two comment letters filed yesterday, SIFMA expressed its support for regulatory changes in disclosure of repurchase requests and due diligence proposed by the Securities and Exchange Commission (SEC) under the Dodd-Frank Act which will help revive the securitization market by enhancing transparency and rebuilding investor confidence. SIFMA is particularly supportive of proposed changes which will allow investors to make more informed investment decisions and facilitate the recovery of the securitization markets. In SIFMA’s view, however, some proposals could have unintended consequences that will impede the renewal of securitization activity and therefore economic recovery.
“Our comments on these important issues reflect SIFMA’s goal of restoring capital flows to the securitization markets and increasing the availability of affordable credit to American consumers and small businesses. Improving disclosure regarding repurchase requests and due diligence in asset-backed securities is an important step towards restoring a functioning, thriving, liquid and efficient securitization marketplace,” said Richard Dorfman, managing director and head of SIFMA’s Securitization Group. “We urge the SEC to very carefully consider the implications of new regulations to ensure that the new rules support the long term health of this essential tool for our economy.”
In its comment letter focused on due diligence, SIFMA:
* Supports the proposal to require an issuer of registered asset-backed securities or a third party designated by the issuer to perform a review of the assets underlying the securitized pool.
* Recommends a third party conducting a due diligence review not be named an “expert,” as the liability associated with that designation could limit the availability of these types of services, thus denying the securitization industry’s access to the valuable due diligence provided by these types of firms.
* Expresses its belief that it would be unwise for the SEC to delineate granular minimum standards for diligence reviews, given the complexity of this task and the short time frame allotted in Dodd-Frank for rule promulgation, and asks the SEC to observe disclosure practices before making a determination that granular standards should be mandated.
* Recommends the proposal exclude asset-backed commercial paper conduits as well as foreign offered asset-backed securities.
In its comment letter focused on disclosure relating to fulfilled and unfulfilled repurchase requests, SIFMA:
* Recommends that rules requiring disclosure of repurchase requests apply to outstanding asset-backed securities of a single class, and that asset-backed commercial paper, collateralized debt obligations, resecuritizations and foreign offered asset-backed securities be excluded from the proposed rule.
* Notes that the definition of securitizer should be applied solely to Fannie Mae or Freddie Mac and not the financial institution transferring loans to Fannie Mae or Freddie Mac.
Suggests that any retrospective disclosure requirement should not carry with it strict liability, given the challenges that sponsors and trustees will face in gathering historic data for which there may not have been retention and reporting policies and procedures in place.
* Requests a definition of what constitutes a “repurchase request”.
* Recommends quarterly filing of repurchase request disclosure forms, with Regulation AB disclosures presented in the same format as non-Regulation AB disclosures.
-30-
Selasa, 26 Oktober 2010
Statement by SIFMA President and CEO Tim Ryan in Connection with National Economists Club Speech
Press Release
Release Date: October 26, 2010
Contact: Andrew DeSouza, (202) 962-7390, adesouza@sifma.org
Statement by SIFMA President and CEO Tim Ryan in Connection with National Economists Club Speech
Washington, DC, October 26, 2010—The Securities Industry and Financial Markets Association today released the following statement from President and CEO Tim Ryan in connection with his speech to the National Economists Club:
—The Securities Industry and Financial Markets Association today released the following statement from President and CEO Tim Ryan in connection with his to the National Economists Club:
235 rulemakings, 41 reports, 71 studies authored by eleven different federal agencies, bureaus and the Government Accountability Office.
That’s what, as legislated by the Dodd-Frank Act, needs to be studied and written over the next two-to-five years. And that’s just in the United States.
Parallel rulemaking is taking shape across the globe, initiated by the same financial crisis, and necessitated by the fact that we do business today in a global economy. It will be vital for global rules to be coordinated and to apply equally to the entire industry to avoid market distortions, regulatory arbitrage and competitive advantages among different jurisdictions.
Our focus—everyone’s focus—must be on how we safeguard our financial system without constraining capital formation, credit availability and our industry’s ability to contribute to economic growth and job creation.
With the breadth and depth of SIFMA’s membership—which includes global, national and regional securities firms, banks and asset managers active in financial markets around the world— we can and will be a trusted, credible resource for everyone participating in the regulatory rulemaking process.
This isn’t about simply meeting the rulemaking deadlines, it’s about getting it done right. The stakes are too high for anything less. Poorly crafted regulations that create market distortions or other unintended consequences could constrain capital formation or even increase systemic risk—the exact opposite of the intent of Dodd-Frank.
To be most effective, SIFMA is focusing primarily on seven areas:
· systemic risk, specifically the new Financial Stability Oversight Counsel and its research arm the Office of Financial Research;
· resolution authority and living wills;
· oversight of the over-the-counter derivatives market;
· securitization and the credit rating agencies;
· capital and liquidity standards via Basel and Dodd-Frank;
· the future of proprietary trading and private equity under what’s come to be known as the Volcker Rule; and
· the creation of a federal fiduciary standard for investment advisors and broker/dealers who provide personalized investment advice to retail investors.
With many firms operating in a global financial system, what happens in one jurisdiction does affect firms operating globally. In addition to the work we’ll be doing on Dodd-Frank rulemaking, we’re paying close attention to what is happening globally, focusing primarily on the west by looking at the regulatory efforts of the United Kingdom, the European Union and the Financial Stability Board.
Systemic Risk
To deal with systemic risk in the U.S., Dodd-Frank has created two new entities, the Financial Stability Oversight Council (FSOC), and its research arm, the Office of Financial Research, which will provide analytical support. FSOC will oversee bank holding companies with total consolidated assets of more than $50 billion. The FSOC can also designate non-bank financial institutions as systemically significant by a 2/3 vote of the FSOC’s 10 voting members.
In Europe, the European Commission is looking into what attributes beyond size alone make an institution financially risky, and, much like the FSOC, has established the European Systemic Risk Board, monitoring risk to the 27 EU countries and coordinating the actions of national supervisors. It is comprised of Europe’s Central Bankers, and to coordinate with among others the European Supervisory Authorities.
Resolution Authority
To address the failure of a large, interconnected financial institution the U.S. and UK has already created a new resolution authority, with Europe following. Dodd–Frank has granted the FDIC the explicit authority to unwind failing firms or covered financial companies, and large complex companies are now required to periodically submit living wills to the FDIC and the Federal Reserve.
In addition to the existing resolution authority, the UK is proposing a separate administrator for investment firms. The UK’s recently passed Financial Services Bill also requires firms to submit living wills. In addition, they are investigating the utility of contingent capital or “CoCos” and bail-ins. Questions remain as to what other countries within the EU might consider and how each of these processes will interact.
In the end, the goal is to provide for a process that will wind down failing institutions, end ‘too-big-to-fail,’ and ensure functioning financial markets.
Derivatives
For the first time, the trading of derivatives will move from a primarily over-the-counter market to one utilizing central clearing houses and exchange trading. Both the EU and the U.S. will soon have mandated central clearing of most swaps. In the U.S., beyond those swaps that are fundamentally not suitable for clearing, the only exception to the mandated clearing requirement is for trades where one party is a non-financial, hedging end-user. Otherwise, all swaps that are clearable will be cleared, and in addition required to be executed on an exchange or swap execution facility (SEF). Dodd-Frank also now makes the regulation of over-the-counter derivatives the responsibility of the Commodity Futures Trading Commission and the Securities and Exchange Commission.
In Europe, central clearing of standardized contracts also will take place through CCPs, with additional capital charges made for non-centrally cleared contracts.
SIFMA is working with ISDA and the FIA to ensure that these reforms, among others, will aid in more effectively managing the interconnectivity these products create, without making the cost of risk management prohibitive.
Securitization
When it comes to securitization, we again see very similar mandates on both sides of the Atlantic— mandatory risk retention of 5 percent. However, here in the U.S., Congress provided regulators discretion in imposing such retention and exempted any retention for securitizations of “qualified” residential mortgages, a new classification to be defined, but presumably your plain vanilla, well underwritten, 30-year home loan and allows regulators to implement retention regimes—and amounts—calibrated to different asset classes.
Dodd-Frank also states that regulators should reduce financial institutions’ reliance on credit rating agencies in regulation and supervisory practices. Bank regulators have put out for comment an initial proposal regarding this provision.
The EU has already addressed this by requiring EU market participants use only EU-registered CRA issued ratings for their regulatory purposes.
Getting these efforts right will help create more aligned interests of dealers and investors, without choking off consumer credit for businesses and families.
Capital and Liquidity Requirements
When it comes to capital and liquidity requirements for systematically important companies, Dodd-Frank and Basel III are both fairly specific.
Dodd-Frank requires these companies to maintain a debt-to-equity ratio of 15-to-1, with trust preferred and hybrid capital counting as Tier 2, not Tier 1, capital. Banks are required to hold a 30-day liquidity buffer. What we still need to formulate is a counter-cyclical means of permitting banks to build in capital buffers.
Basel III’s capital and liquidity rule sets out total capital requirements of 10.5 percent, broken out as 8.5 percent Tier 1 capital and 7 percent common equity. Liquidity requirements include a liquidity coverage ratio for 30-day systemic and idiosyncratic risk and a net stable funding ratio for 1-year idiosyncratic risk.
The leverage ratio will supplement, rather than replace, the current risk-based minimum capital ratio.
Still being explored by the committee is the utility of dynamic provisioning as a useful countercyclical measure.
Volcker Rule
Financial institutions in the United States will also have to work with the ban on proprietary trading and private equity within Dodd-Frank has come to be known as the Volcker Rule. All proprietary trading by bank holding companies is prohibited. The important aspect will be how regulators define what activities are deemed “proprietary”’ and thus prohibited, while ensuring that markets remain liquid and deep.
Also, bank holding companies are generally prohibited from investing in, advising on or owning hedge funds or private equity funds. Total investments are limited to 3 percent of tier 1 capital. Investments in a fund within the first year of its establishment are capped at 3 percent of that fund.
The UK’s Independent Banking Commission is calling for evidence on whether limits on proprietary trading and investment are warranted. But how will a U.S.-only rule such as this affect our nation’s competitiveness with Europe, who is generally not considering such a rule?
Fiduciary Duty
A strictly domestic, and far less cut and dry, piece of rulemaking is the creation of a federal fiduciary standard that would apply—uniformly—to all investment advisers and brokers providing personalized investment advice to retail investors about securities, regardless of their business model.
Making sure the standard is written in a way that preserves investor choice of the products and services that best fit individual investment needs is a little tougher. It’s writing rules about the intersection of conduct and offerings.
So, as you’ve seen, six out of the seven areas in Dodd-Frank we’re focusing on have a global, or at the least EU, equivalent.
But we’ll be involved in other areas of the Dodd-Frank rulemaking process, such as compensation, the regulation of hedge funds and short sales. And we’ll also be offering commentary on the convergence of FASB and IFRS and the resulting accounting standards that will emerge.
Reforming Housing Finance
And there are some issues that are vital to the U.S. economy and financial markets that are not in the Dodd-Frank Act. Two immediate concerns are reforming our housing finance system and the taxing capital gains and dividends.
The GSEs, government sponsored entities, primarily through Fannie Mae and Freddie Mac in mortgage finance, have made possible cost-effective lending to consumers for the past 30 years. Our members active in these markets believe some form of government support will be necessary to attract and maintain capital investment in the U.S. mortgage market anywhere near the historical level over the past several decades, but recognize there is no single, easy answer for the task of reforming them.
Additionally, recent press coverage has focused on issues within the mortgage foreclosure process and its impact on the securitization markets. Indeed, some have called for a national moratorium on all foreclosures until these issues have been addressed.
Let me be clear: imposing a system-wide foreclosure moratorium would be catastrophic to the housing market and to the economy.
The mortgage market, investors and the health of the economy are all inter-related. Investors in the housing market include American workers with pension funds, 401(k) plans, and mutual funds. These hardworking Americans would unjustly suffer losses in their savings from a foreclosure moratorium.
A foreclosure moratorium would create increased uncertainty in the already weak securitization and housing markets, further constraining consumer credit and spending and dampening our already unhealthy economic situation.
If mistakes have been made in relation to foreclosure processing, SIFMA firmly believes such mistakes should be corrected accurately and fairly.
While each situation may have variations, we believe the customary loan transfer and assignment practices used in securitization are legally sound an in accordance with generally accepted and settled legal principles. We believe sweeping generalizations regarding endemic defects are not accurate.
Foreclosures are in no one’s best interest, neither the bank nor the homeowner nor the investor, but in some cases are unavoidable. In those situations, moratoriums and similar actions will only delay the inevitable, and lengthen the timeline for housing recovery.
Capital Gains and Dividends Taxation
Investors also need certainty with respect to tax issues as nearly all of the Bush era tax cuts are set to expire at the end of this year. As to capital gains and dividends, without Congressional action—soon—the tax rates on capital gains will increase by 33 percent and the rates on dividends will increase by 164 percent—that’s right 164 percent— this coming January 1. Seniors on fixed incomes will be hit particularly hard by these increases, resulting for many in significant decreases in their discretionary spending. And higher tax rates on investment income will lead to fewer jobs, lower take-home pay and even slower economic.
January 1 is not far off, and that’s a very big change. Right now, the lack of action is already having a negative effect on investors. Investors like certainty, and they’re not getting it. Congress should provide that certainty by extending the current 15 percent tax rates in capital gains and dividends before the end of 2010.
Conclusion
The financial industry and federal regulators are faced with an unprecedented task over the next 2 to 5 years. Many of the agencies tasked with making these rules are taking on responsibilities outside their historical purview; the expertise needed to get these regulations right doesn’t necessarily reside within their walls. However, there is a robust rulemaking process that encourages comment. Again, we are committed to being a valuable resource during this rulemaking process, providing content-rich, fact-based commentary, drawing on the expertise of SIFMA’s member firms, And, when needed, we are moving beyond even that, contracting for third-party, in-depth economic analysis of the effects of proposed regulations.
We’re also concerned with how our new regulations will coordinate with similar efforts internationally. And how all of these new rules, working together, will affect capital formation, credit availability, economic growth, and ultimately the prosperity of consumers.
We’re doing all this because we must get these regulations right; the stakes are too high to do anything less. Unintended consequences of poorly crafted regulations could slow economic growth and stifle job creation; it could create capital market winners and losers.
This is not what any of us wants. We’ll be living with these regulations for decades. Let’s look back at the next two to five years as the time when we laid a foundation for growth and safety—as the time when we all got it right.
-30-
The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA's mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit www.sifma.org.
Release Date: October 26, 2010
Contact: Andrew DeSouza, (202) 962-7390, adesouza@sifma.org
Statement by SIFMA President and CEO Tim Ryan in Connection with National Economists Club Speech
Washington, DC, October 26, 2010—The Securities Industry and Financial Markets Association today released the following statement from President and CEO Tim Ryan in connection with his speech to the National Economists Club:
—The Securities Industry and Financial Markets Association today released the following statement from President and CEO Tim Ryan in connection with his to the National Economists Club:
235 rulemakings, 41 reports, 71 studies authored by eleven different federal agencies, bureaus and the Government Accountability Office.
That’s what, as legislated by the Dodd-Frank Act, needs to be studied and written over the next two-to-five years. And that’s just in the United States.
Parallel rulemaking is taking shape across the globe, initiated by the same financial crisis, and necessitated by the fact that we do business today in a global economy. It will be vital for global rules to be coordinated and to apply equally to the entire industry to avoid market distortions, regulatory arbitrage and competitive advantages among different jurisdictions.
Our focus—everyone’s focus—must be on how we safeguard our financial system without constraining capital formation, credit availability and our industry’s ability to contribute to economic growth and job creation.
With the breadth and depth of SIFMA’s membership—which includes global, national and regional securities firms, banks and asset managers active in financial markets around the world— we can and will be a trusted, credible resource for everyone participating in the regulatory rulemaking process.
This isn’t about simply meeting the rulemaking deadlines, it’s about getting it done right. The stakes are too high for anything less. Poorly crafted regulations that create market distortions or other unintended consequences could constrain capital formation or even increase systemic risk—the exact opposite of the intent of Dodd-Frank.
To be most effective, SIFMA is focusing primarily on seven areas:
· systemic risk, specifically the new Financial Stability Oversight Counsel and its research arm the Office of Financial Research;
· resolution authority and living wills;
· oversight of the over-the-counter derivatives market;
· securitization and the credit rating agencies;
· capital and liquidity standards via Basel and Dodd-Frank;
· the future of proprietary trading and private equity under what’s come to be known as the Volcker Rule; and
· the creation of a federal fiduciary standard for investment advisors and broker/dealers who provide personalized investment advice to retail investors.
With many firms operating in a global financial system, what happens in one jurisdiction does affect firms operating globally. In addition to the work we’ll be doing on Dodd-Frank rulemaking, we’re paying close attention to what is happening globally, focusing primarily on the west by looking at the regulatory efforts of the United Kingdom, the European Union and the Financial Stability Board.
Systemic Risk
To deal with systemic risk in the U.S., Dodd-Frank has created two new entities, the Financial Stability Oversight Council (FSOC), and its research arm, the Office of Financial Research, which will provide analytical support. FSOC will oversee bank holding companies with total consolidated assets of more than $50 billion. The FSOC can also designate non-bank financial institutions as systemically significant by a 2/3 vote of the FSOC’s 10 voting members.
In Europe, the European Commission is looking into what attributes beyond size alone make an institution financially risky, and, much like the FSOC, has established the European Systemic Risk Board, monitoring risk to the 27 EU countries and coordinating the actions of national supervisors. It is comprised of Europe’s Central Bankers, and to coordinate with among others the European Supervisory Authorities.
Resolution Authority
To address the failure of a large, interconnected financial institution the U.S. and UK has already created a new resolution authority, with Europe following. Dodd–Frank has granted the FDIC the explicit authority to unwind failing firms or covered financial companies, and large complex companies are now required to periodically submit living wills to the FDIC and the Federal Reserve.
In addition to the existing resolution authority, the UK is proposing a separate administrator for investment firms. The UK’s recently passed Financial Services Bill also requires firms to submit living wills. In addition, they are investigating the utility of contingent capital or “CoCos” and bail-ins. Questions remain as to what other countries within the EU might consider and how each of these processes will interact.
In the end, the goal is to provide for a process that will wind down failing institutions, end ‘too-big-to-fail,’ and ensure functioning financial markets.
Derivatives
For the first time, the trading of derivatives will move from a primarily over-the-counter market to one utilizing central clearing houses and exchange trading. Both the EU and the U.S. will soon have mandated central clearing of most swaps. In the U.S., beyond those swaps that are fundamentally not suitable for clearing, the only exception to the mandated clearing requirement is for trades where one party is a non-financial, hedging end-user. Otherwise, all swaps that are clearable will be cleared, and in addition required to be executed on an exchange or swap execution facility (SEF). Dodd-Frank also now makes the regulation of over-the-counter derivatives the responsibility of the Commodity Futures Trading Commission and the Securities and Exchange Commission.
In Europe, central clearing of standardized contracts also will take place through CCPs, with additional capital charges made for non-centrally cleared contracts.
SIFMA is working with ISDA and the FIA to ensure that these reforms, among others, will aid in more effectively managing the interconnectivity these products create, without making the cost of risk management prohibitive.
Securitization
When it comes to securitization, we again see very similar mandates on both sides of the Atlantic— mandatory risk retention of 5 percent. However, here in the U.S., Congress provided regulators discretion in imposing such retention and exempted any retention for securitizations of “qualified” residential mortgages, a new classification to be defined, but presumably your plain vanilla, well underwritten, 30-year home loan and allows regulators to implement retention regimes—and amounts—calibrated to different asset classes.
Dodd-Frank also states that regulators should reduce financial institutions’ reliance on credit rating agencies in regulation and supervisory practices. Bank regulators have put out for comment an initial proposal regarding this provision.
The EU has already addressed this by requiring EU market participants use only EU-registered CRA issued ratings for their regulatory purposes.
Getting these efforts right will help create more aligned interests of dealers and investors, without choking off consumer credit for businesses and families.
Capital and Liquidity Requirements
When it comes to capital and liquidity requirements for systematically important companies, Dodd-Frank and Basel III are both fairly specific.
Dodd-Frank requires these companies to maintain a debt-to-equity ratio of 15-to-1, with trust preferred and hybrid capital counting as Tier 2, not Tier 1, capital. Banks are required to hold a 30-day liquidity buffer. What we still need to formulate is a counter-cyclical means of permitting banks to build in capital buffers.
Basel III’s capital and liquidity rule sets out total capital requirements of 10.5 percent, broken out as 8.5 percent Tier 1 capital and 7 percent common equity. Liquidity requirements include a liquidity coverage ratio for 30-day systemic and idiosyncratic risk and a net stable funding ratio for 1-year idiosyncratic risk.
The leverage ratio will supplement, rather than replace, the current risk-based minimum capital ratio.
Still being explored by the committee is the utility of dynamic provisioning as a useful countercyclical measure.
Volcker Rule
Financial institutions in the United States will also have to work with the ban on proprietary trading and private equity within Dodd-Frank has come to be known as the Volcker Rule. All proprietary trading by bank holding companies is prohibited. The important aspect will be how regulators define what activities are deemed “proprietary”’ and thus prohibited, while ensuring that markets remain liquid and deep.
Also, bank holding companies are generally prohibited from investing in, advising on or owning hedge funds or private equity funds. Total investments are limited to 3 percent of tier 1 capital. Investments in a fund within the first year of its establishment are capped at 3 percent of that fund.
The UK’s Independent Banking Commission is calling for evidence on whether limits on proprietary trading and investment are warranted. But how will a U.S.-only rule such as this affect our nation’s competitiveness with Europe, who is generally not considering such a rule?
Fiduciary Duty
A strictly domestic, and far less cut and dry, piece of rulemaking is the creation of a federal fiduciary standard that would apply—uniformly—to all investment advisers and brokers providing personalized investment advice to retail investors about securities, regardless of their business model.
Making sure the standard is written in a way that preserves investor choice of the products and services that best fit individual investment needs is a little tougher. It’s writing rules about the intersection of conduct and offerings.
So, as you’ve seen, six out of the seven areas in Dodd-Frank we’re focusing on have a global, or at the least EU, equivalent.
But we’ll be involved in other areas of the Dodd-Frank rulemaking process, such as compensation, the regulation of hedge funds and short sales. And we’ll also be offering commentary on the convergence of FASB and IFRS and the resulting accounting standards that will emerge.
Reforming Housing Finance
And there are some issues that are vital to the U.S. economy and financial markets that are not in the Dodd-Frank Act. Two immediate concerns are reforming our housing finance system and the taxing capital gains and dividends.
The GSEs, government sponsored entities, primarily through Fannie Mae and Freddie Mac in mortgage finance, have made possible cost-effective lending to consumers for the past 30 years. Our members active in these markets believe some form of government support will be necessary to attract and maintain capital investment in the U.S. mortgage market anywhere near the historical level over the past several decades, but recognize there is no single, easy answer for the task of reforming them.
Additionally, recent press coverage has focused on issues within the mortgage foreclosure process and its impact on the securitization markets. Indeed, some have called for a national moratorium on all foreclosures until these issues have been addressed.
Let me be clear: imposing a system-wide foreclosure moratorium would be catastrophic to the housing market and to the economy.
The mortgage market, investors and the health of the economy are all inter-related. Investors in the housing market include American workers with pension funds, 401(k) plans, and mutual funds. These hardworking Americans would unjustly suffer losses in their savings from a foreclosure moratorium.
A foreclosure moratorium would create increased uncertainty in the already weak securitization and housing markets, further constraining consumer credit and spending and dampening our already unhealthy economic situation.
If mistakes have been made in relation to foreclosure processing, SIFMA firmly believes such mistakes should be corrected accurately and fairly.
While each situation may have variations, we believe the customary loan transfer and assignment practices used in securitization are legally sound an in accordance with generally accepted and settled legal principles. We believe sweeping generalizations regarding endemic defects are not accurate.
Foreclosures are in no one’s best interest, neither the bank nor the homeowner nor the investor, but in some cases are unavoidable. In those situations, moratoriums and similar actions will only delay the inevitable, and lengthen the timeline for housing recovery.
Capital Gains and Dividends Taxation
Investors also need certainty with respect to tax issues as nearly all of the Bush era tax cuts are set to expire at the end of this year. As to capital gains and dividends, without Congressional action—soon—the tax rates on capital gains will increase by 33 percent and the rates on dividends will increase by 164 percent—that’s right 164 percent— this coming January 1. Seniors on fixed incomes will be hit particularly hard by these increases, resulting for many in significant decreases in their discretionary spending. And higher tax rates on investment income will lead to fewer jobs, lower take-home pay and even slower economic.
January 1 is not far off, and that’s a very big change. Right now, the lack of action is already having a negative effect on investors. Investors like certainty, and they’re not getting it. Congress should provide that certainty by extending the current 15 percent tax rates in capital gains and dividends before the end of 2010.
Conclusion
The financial industry and federal regulators are faced with an unprecedented task over the next 2 to 5 years. Many of the agencies tasked with making these rules are taking on responsibilities outside their historical purview; the expertise needed to get these regulations right doesn’t necessarily reside within their walls. However, there is a robust rulemaking process that encourages comment. Again, we are committed to being a valuable resource during this rulemaking process, providing content-rich, fact-based commentary, drawing on the expertise of SIFMA’s member firms, And, when needed, we are moving beyond even that, contracting for third-party, in-depth economic analysis of the effects of proposed regulations.
We’re also concerned with how our new regulations will coordinate with similar efforts internationally. And how all of these new rules, working together, will affect capital formation, credit availability, economic growth, and ultimately the prosperity of consumers.
We’re doing all this because we must get these regulations right; the stakes are too high to do anything less. Unintended consequences of poorly crafted regulations could slow economic growth and stifle job creation; it could create capital market winners and losers.
This is not what any of us wants. We’ll be living with these regulations for decades. Let’s look back at the next two to five years as the time when we laid a foundation for growth and safety—as the time when we all got it right.
-30-
The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA's mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit www.sifma.org.
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