Compliance Avenue

The Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC) announced that the first meeting of the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues will be held on Monday, May 24.

The Joint Committee will discuss the preliminary findings of the staffs of the CFTC and SEC related to the unusual market events of May 6.  Monday’s meeting will be webcast live on the Internet at www.sec.gov.

For a list of members of the Joint Committee please go to http://www.sec.gov/news/press/2010/2010-79.htm

According to the BBC -  A key committee of Euro MPs is preparing to vote on a controversial new directive regulating hedge funds and venture capitalists.

London-based fund managers have said the proposals will make it impossible for funds based outside the EU to raise money within Europe.

The US government has argued those plans are protectionist.

Britain’s new government wanted to delay the vote, but a report suggests efforts failed. Read the rest of this entry »

Securities and Exchange Commission Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler recently announced the formation of a joint committee that will address emerging regulatory issues.  The establishment of this committee was one of many recommendations included in the agencies’ harmonization report issued last year.  The first item on the committee’s agenda will be to review last Thursday’s market events and to make recommendations related to market structure issues, disparate trading conventions and rules across various markets.

Read More: http://www.sec.gov/rules/other/2010/33-9123.pdf
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As reported today on FINalternatives, smaller hedge funds would have to register with the Securities and Exchange Commission under an amendment to the financial regulation reform bill making its way through Congress. Read the rest of this entry »

In addition to facing continuing opposition from the GOP, the financial reform bill could also face opposition from within.

Sen. Ben Nelson (D-Neb.), a centrist whose vote fellow Democrats might need in order to secure 60 or more votes to pass the bill, said today that the bill is not yet at a place where he could support it on final passage.

Notably, Senator Nelson joined with Republicans in three procedural votes last week in an effort to block beginning debate on the reform bill.  He was the only Democrat to do so.  Although Sen. Nelson did concede that the  amendments approved earlier today are bringing him closer to supporting the legislation, he also said that he still has “a lot” of concerns with the bill, including how the legislation would affect small and community banks.

Earlier today the Senate voted to approve an amendment to the portion of the financial regulatory reform bill dealing with “too big to fail” financial institutions.  The amendment is the result of an agreement reached earlier today between Senator Chris Dodd (D-Conn.), the chairman of the Senate Banking Committee, and Senator Richard Shelby (R-Ala.), the ranking member of that committee.

Today’s vote was the first formal movement on the reform bill since Republican senators allowed debate to begin late last week on the legislation, and has cleared the way for voting to proceed on the hundreds of other amendments being proposed by senators from both sides of the aisle.

Amendments approved:

• Read the rest of this entry »

Earlier today the Senate voted to approve an amendment to the portion of the financial regulatory reform bill dealing with “too big to fail” financial institutions.  The amendment is the result of an agreement reached earlier today between Senator Chris Dodd (D-Conn.), the chairman of the Senate Banking Committee, and Senator Richard Shelby (R-Ala.), the ranking member of that committee.

Although today’s bipartisan deal represents significant progress, the bill still does not have the full support of Senator Shelby.  Shortly after he reached agreement with Senator Dodd on the “too big to fail” provisions, Senator Shelby released the following statement:

I thank Chairman Dodd for including my changes to the legislation that will correct these critical shortcomings. While this progress is encouraging, the overall legislation still has a long way to go to gain my support.  My Republican colleagues and I will continue to offer constructive proposals to restrain the drastic government overreach in this bill and promote the competitiveness of our financial system during this time of economic difficulty.   It is my hope that this legislation can be further improved to achieve these important goals as well.

Earlier today the Senate voted to approve an amendment to the portion of the financial regulatory reform bill dealing with “too big to fail” financial institutions.  The amendment is the result of an agreement reached earlier today between Senator Chris Dodd (D-Conn.), the chairman of the Senate Banking Committee, and Senator Richard Shelby (R-Ala.), the ranking member of that committee.

The amendment excludes the $50 billion liquidation fund previously proposed in the bill, opting instead to cover the costs of liquidations from asset sales and, in case of shortfalls, from fees assessed against other large firms.

The Senate also approved an amendment offered by Senator Barbara Boxer (D-CA) that would prohibit the use of taxpayer funds to bail out financial institutions.

Today’s vote was the first formal movement on the reform bill since Republican senators allowed debate to begin late last week on the legislation, and has cleared the way for voting to proceed on the hundreds of other amendments being proposed by senators from both sides of the aisle.

As reported in the Financial Times,  the US Securities and Exchange Commission is touting a new brain trust in response to an oft-cited criticism that its staffers do not have the necessary level of industry knowledge and experience to effectively regulate the business.

The SEC’s new asset management unit is part of a broader reorganisation at the agency designed to make it a more efficient and effective regulator. The unit will focus on investment advisers, investment companies, hedge funds and private equity funds. Read the rest of this entry »

As reported in the Wall Street Journal , federal regulators are examining whether hedge-fund managers abused tools known as “side pockets” that helped prevent clients from withdrawing billions of dollars of assets during the financial crisis.  More specifically, the examinations are being conducted by the Enforcement Division’s new “Asset Management Unit”, which is headed by co-chiefs Rob Kaplan and Bruce Karpati, and which was created to cover, among other things, hedge funds, private equity funds and investment advisers.  The Asset Management Unit is apparently looking into the possibility of disclosure and valuation issues surrounding the use of side pockets during the financial crisis. Read the rest of this entry »