• ETF disclosure should be standardized only after industry talks, State Street tells SEC
    11 February 2019
    State Street Global Advisors, one of the three largest exchange-traded fund sponsors, asked the US Securities and Exchange Commission to launch an industry approach to consistent ETF disclosures rather than adopt a federal rule.

    A rule has been called for by an SEC advisory panel seeking a uniform classification scheme that identifies risks among funds and offers more “truth in labeling” after billion-dollar losses during market gyrations last year.

    State Street voiced concern that the panel’s apparently simple scheme “does not fully disclose risk attributes" in a letter to the SEC.

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  • Banks to be checked to see if Basel III being carried out in unforeseen ways, Coen says
    08 February 2019
    The Basel Committee on Banking Supervision will examine whether banks are implementing Basel III standards by exploiting rule differences or adapting their business practices in unanticipated ways, the committee’s William Coen said.

    “We need to understand all the impacts, not just the quantitative impact,” Coen, Basel's secretary general, said in an industry interview posted on the Bank for International Settlements website. “For example, are banks changing their behavior? Are there opportunities for regulatory arbitrage? How are banks optimizing the rules?”

    He continued: “I say that not in a negative sense. Naturally, banks are expected to meet rules as set out by the Basel framework.”

    Basel, made up of central banks and financial regulators around the world, will then consider ways to address any problems discovered in these assessments, Coen said in the interview with Institute of International Finance trade group.

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  • Regional banks ask Fed to eliminate Dodd-Frank standards for firms of their size
    07 February 2019
    SunTrust and four other regional banks have asked the US Federal Reserve to exclude all firms of their size from liquidity and stress-test requirements because they pose little systemic risk.

    The banks objected to the Fed’s proposal to ease, but not eliminate, Dodd-Frank Act requirements for firms with assets of $100 billion to $250 billion.

    Banks of this size, their letter said, have risk profiles that are “smaller, less complex and less likely to cause a systemic risk to the US financial system”.

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  • Basel III market-risk standards still 'quite complex,' Basel's Coen acknowledges
    06 February 2019
    Basel III market-risk capital standards that were finalized last month partly to simplify the previous regime remain complicated and possibly in need of clarification, said William Coen, secretary general of the Basel Committee on Banking Supervision.

    “One of my lasting, I wouldn’t call it regrets, but I’m quite aware of the fact that finalized market-risk rules continue to be quite complex,” he said in an industry interview posted on the Bank of International Settlements website. “I’m quite aware of the need for the Basel Committee to provide stability and certainty to the framework.”

    The new principles seek to help banks absorb losses from the price movements of trading instruments. They aim to improve the risk sensitivity of Basel 2.5’s standardized approach of a decade ago, improve its simplicity and enable consistent implementation among jurisdictions.

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  • Exchanges' plan to make circuit-breaker program permanent lauded by asset managers, traders
    05 February 2019
    A cross-section of asset managers and traders have backed a proposal for US securities exchanges to make permanent a pilot program using circuit breakers to pause trading during unusual stock market swings.

    The “limit up-limit down” program, or LULD, “not only helps to ensure orderly markets in periods of extraordinary volatility, but also prevents potentially harmful price volatility during normal market conditions, when transitory gaps in liquidity may occur for non-fundamental reasons,” the group’s letter to the US Securities and Exchange Commission said.

    Asset managers such as BlackRock and Vanguard, as well as the trading units of JPMorgan, Citigroup and Citadel Securities were among the letter's 22 signees. Others include the Security Traders Association and Virtu Financial, a leading high-frequency trader.

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