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U.S. May Target ETFs for Collateral Add-Ons

By Louie Woodall
January 15, 2016, Risk

U.S. firms that buy and sell exchange-traded funds (ETFs) fear they may be in line for hefty new collateral requirements from U.S. regulators when trading in international or less-liquid products.

Fears were sparked by a January 5 letter from the Financial Industry Regulatory Authority (FINRA), which has warned it will "review the processes firms use to measure and monitor the impact of overnight counterparty credit risk" associated with creating and redeeming huge blocks of ETF shares on a free-of-payment (FOP) basis.

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U.S. FINRA Latest to Target Firm's Trading Culture

By Cian Burke
January 6, 2016, FOW

Wall Street's self-regulator the Financial Industry Regulatory Authority (FINRA) is set to ramp up its scrutiny of firms' culture this year after naming it as a priority for 2016.

Outlining the regulator's annual priorities on Tuesday, FINRA Chairman and CEO Richard Ketchum said the regulator would look to formalize its assessment of firm culture and would complete the review begun in late 2015 of incentives and conflicts of interest. 

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After Delays Are Cleared, New Rules Will Lead to Big Changes

By Rick Baert
December 28, 2015, Pensions&Investments

The new year is expected to be an uncertain one for regulations in trading because of delays in European market rules and a U.S. pilot on tick sizes, as well as a proposal to increase transparency in dark-pool trading.

But make no mistake, said Kevin Cronin, director, global head of trading, at Invesco Ltd., Atlanta. Once the delays are gone and proposals become regulations, there will be big changes affecting institutional trading, both in 2016 and beyond. “There are a lot of things that, if they go into effect, could change the landscape of trading — in equities, but also in fixed income, derivatives,” Mr. Cronin said. “It could be a very impactful year.”

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FINRA's Andrews to Lead Global Regulatory Group IOSCO

By Jed Horowitz, Suzanne Barlyn and Huw Jones
October 9, 2015, Reuters

Paul Andrews, a veteran American securities industry regulator, will be the next head of a global consortium of regulators that tries to coordinate financial markets standards worldwide, according to a regulatory source.

Andrews, currently vice president of international affairs at the Financial Industry Regulatory Authority (FINRA), will become Secretary General of the International Organization of Securities Commissions (IOSCO), which is based in Madrid. He will succeed David Wright, a Briton who will retire from the post at the end of the year after a three-year term.

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Demonstrating Cybersecurity Readiness to Regulators - Hatstand

August 20, 2015, Automated Trader

Many industry experts predict that it is not a matter of if, but when a firm will experience a cybersecurity breach and it was reported that the number of cybersecurity attacks increased by over 50% in 2014 over the number recorded in 2013.

With such a high threat, US financial markets watchdogs such as the Security and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have made cybersecurity preparedness a top priority for their 2015 member firm examinations.

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American Is Front-Runner to Head Panel of Global Markets Regulators

By Juliet Samuel
July 16, 2015, The Wall Street Journal

An American is close to replacing the European at the helm of one of the world’s most powerful financial regulatory bodies, as the organization seeks to deepen U.S. involvement in its activities, according to a person familiar with the matter.

Paul Andrews, a vice president at the Washington-based Financial Industry Regulatory Authority, is the front-runner to lead an international committee of markets regulators called the International Organization of Securities Commissions, according to a person familiar with the matter. The current secretary-general of Iosco, David Wright, a British bureaucrat who previously spent 34 years at the European Commission, has championed the idea of international cooperation in regulating the financial sector during his three years at the helm. He will step down from his post at the start of next year.

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Did Bank Rules Kill Liquidity? Volcker, Frank Respond

By Yalman Onaran and Dakin Campbell
Published October 20, 2014 Bloomberg Businessweek

Last week’s market gyrations sparked questions about whether bank regulations implemented after the 2008 financial crisis exacerbated price declines by limiting the ability of Wall Street banks to make markets.

As stocks and some corporate bonds fell last week, some hedge-fund managers said higher capital requirements had curbed Wall Street trading desks’ ability to cushion the declines by stepping in to buy securities -- what is known as providing liquidity. Also blamed: the Dodd-Frank Act’s Volcker Rule that limits federally insured banks from speculating on some assets, including corporate debt.

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Artificial Intelligence and the Future of Financial Regulation

By Alexander Campbell
October 16, 2014 Risk

Software has taken over from humans in trading – and will spread further in the years to come. Regulators will need to prepare for a faster, darker industry

At some point in the last few years, the human stock trader became an endangered species. Most trades on the world's equity markets are now conducted by machines – algorithmic trading systems. And research in the areas of machine learning, big data and artificial intelligence promises to change the financial world still more fundamentally in the near future – bringing both new benefits and new challenges for operational risk teams and compliance managers.

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Regulators Weighing New Rules for Private Trading Venues

By Scott Patterson
Published September 10, 2014 The Wall Street Journal

Market regulators are considering imposing additional steps to require greater transparency and disclosures by private trading platforms and heightened oversight of computerized trading strategies.

The Financial Industry Regulatory Authority will weigh a new set of rules at its Sept. 19 meeting, including a proposal that would require trading platforms, including so-called dark pools, to provide additional details about buy and sell orders. Dark pools are alternative trading venues that currently don't post buy and sell orders, only reporting trades after they take place.

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Finra Rejects ‘More Than Half’ of Structured Product Adverts

By Yakob Peterseil
Published May 16, 2014 Risk

Financial Industry Regulatory Authority (Finra) staff warned brokers in more than 50% of cases not to use sales materials related to structured products that failed to comply with new communications rules, said Thomas Selman, executive vice-president for regulatory policy at Finra, speaking at a conference last week.

More than half of sales materials related to structured products have earned a "do not use" warning from Finra staff in the past 14 months, while 75% merited comments for perceived deficiencies under the new rules, Selman told the Structured Products Americas conference in Miami on May 8.

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