Sifma : News on the capital markets, securities and financial industry

06/12/2011 | SIFMA

  Washington Roundup  

Group urges SEC and MSRB to adopt suitability standards
The Government Finance Officers Association asked the Securities and Exchange Commission and the Municipal Securities Rulemaking Board to prevent inappropriate financial products from being sold to state and local governments. The MSRB recently withdrew several proposed rules for municipal bond advisers. SIFMA had sought cost-benefit analysis on the changes. Leslie Norwood, managing director and co-head of the municipal securities division at SIFMA, said the proposals were too broad, because they would apply even when a financial adviser had been engaged. The Bond Buyer (special access for readers of SIFMA SmartBrief)(12/5)

CFTC adopts tighter restrictions on futures firms
The Commodity Futures Trading Commission unanimously approved a rule to further limit how brokerages can use customer funds. "This rule is important, but I might say the agency will look at additional ways to enhance customer protections," said Chairman Gary Gensler. Regulators are considering several proposals to toughen oversight after MF Global Holdings collapsed. The Wall Street Journal(12/6), Reuters(12/5)

Dodd-Frank tax benefit for derivatives investors is questioned
Sen. Bill Nelson, D-Fla., has raised questions about a measure in the Dodd-Frank Act that gives many derivatives investors a tax benefit. The provision is expected to be discussed today at a congressional hearing. The measure exempts credit default swaps and other derivatives from rules against tax shelters. The Wall Street Journal/Washington Wire blog(12/5)

Committee report finds difficulties in taxing financial products
The Joint Committee on Taxation issued a report on financial instruments, including exchange-traded notes and options. The flexibility of such instruments "creates great difficulties in the taxation," according to the report, which was prepared for a hearing today of the House Ways and Means Committee and Senate Finance Committee. “These are very good information-gathering opportunities for the members of the committee that will help them as they hopefully ultimately move toward broad-based tax reform,” said Ken Bentsen, the executive vice president for public policy and advocacy at SIFMA. Bloomberg(12/6)

Basel panel considers move that could cut sovereign-debt demand
The Basel Committee on Banking Supervision is considering allowing financial institutions to use more corporate debt, as well as cash and sovereign bonds, to meet liquidity standards, sources said. That could lower demand for sovereign bonds. "One of the central pillars of the Basel III framework is the notion of a risk-free asset class," said Matthew Czepliewicz, a banking analyst at Collins Stewart Hawkpoint. "That central pillar is disintegrating. Basel is quite clearly going to have to be revised." Bloomberg Businessweek(12/6)

  • Other News

Fed to consider changing how it discloses policy plans
The Wall Street Journal (12/5)

SEC says it needs more time on accounting-rule recommendation