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Category Archives: Regulation & Enforcement

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Correction: NFA and FINRA Do Recognize Other Regulator’s Bans Standard

John Lothian

It turns out that the NFA and FINRA do jointly recognize the bans of other regulators already. In the specific case I mentioned, that of Jon Corzine, he would register if necessary with the SEC. Whether the SEC will recognize the ban of another regulator is a question I am still awaiting an answer. There is a loophole that was expanded by Dodd-Frank that allows hedge funds with less than $150 million to not have to register with the SEC. Tom Sexton of the NFA responded to my inquiry by saying: With regard to your column last week, you should…

Time to Close the Asset Class Ban Loophole Standard

Corzine and his ilk Should be Banned Across All Asset Classes Note: A correction to this story has been posted here. The NFA and FINRA to recognize the bans of other regulators. With the recent news that former MF Global CEO Jon Corzine is attempting to make a comeback at age 70 as a hedge fund manager, it became clear there is a hole in our regulatory system that needs to be fixed. Corzine is banned for life by the CFTC from trading futures, yet he can operate in the securities and FX worlds managing other people’s money. It is…

How Do You Save the Capital Markets? Standard

Kennedy Looks to Lead Market Revamp Kevin Kennedy is my new hero. The senior vice president and head of equity options, on stage at the Options Industry Conference last week, spoke about taking the lead on a new initiative to change the existing financial and regulatory structure for financial markets. And he urged the other exchange executives from the other four major options markets to join him. In today’s political environment, it takes courage for someone to stand up and say they want to fix the financial markets so they stay the envy of world capital markets.  And there is…

How do we make American markets great again? Keep it simple, stupid. Standard

CFTC Commissioner Christopher Giancarlo detailed his plan for the agency after being nominated by President Trump as chairman of the Commodity Futures Trading Commission on Wednesday at FIA Boca. Gene Simmons would be proud — the new initiative is called Project KISS (Keep It Simple, Stupid). KISS has three key goals: fostering U.S. economic growth, enhancing markets and “rightsizing” the agency’s footprint. All of these tie into Giancarlo’s overarching point about the agency — it has lost sight of its regulatory goals.  On the topic of fostering U.S. economic growth, Giancarlo took a big picture look at the tumult of…

Walt Lukken: Three Ideas for Trump and a New Optimism for FIA Boca Standard

After almost seven years of Dodd-Frank reforms, the industry has adjusted, reacted and adapted to the new regulatory structure. Now with the new Trump administration in Washington, the FIA sees an opportunity to take stock of what’s been done and what might be the best plan going forward. There’s no doubt the industry has struggled to comply with the spate of new rules from the CFTC, not to mention from other federal agencies. Walt Lukken, president and CEO of the FIA, has advocated for looking at three main areas of regulation that maintain regulatory reforms but allow for more sensible…

CFTC Commissioner Bowen Outlines Disruptive Derivatives Developments at Brodsky Family Lecture Standard

The fate of financial regulations, and specifically the Dodd-Frank Act, under the Trump administration is one of the biggest questions facing the industry and investors.  CFTC Commissioner Sharon Bowen addressed that question in a speech at the Northwestern University Pritzker School of Law last night as part of the Brodsky Family JD-MBA Lecture Series. Bowen earned her law degree at Northwestern’s Law School and is a strong supporter of the school. In addition to her role at the CFTC, she was also acting head of the Securities Investor Protection Corporation, chartered by Congress to help protect U.S. investors from brokerage…

The Most Popular Stories of 2016 on JohnLothianNews.com Standard

As we end 2016 we should all stop in at Ceres in the Chicago Board of Trade Building for a stiff drink and to shake the hand of Billy Assimos. He was the focus of the most read story on www.johnlothiannews.com in 2016, according to Google Analytics. Sarah Rudolph penned the story, “Billy Assimos, the Face of Ceres” in June of this year. Assimos is the longtime manager of Ceres, a restaurant and bar in the CBOT Building, and a friend of many. I guess it pays to serve the stiffest drinks in Chicago. Coming in second place was Jim…

Next Man Up: Tom Sexton Takes The Reins At National Futures Association With An Eye On Technology and Swaps Regulation Standard

For the markets and market regulators, the industry is all about technology. Tom Sexton, who was named president and CEO of the National Futures Association (NFA) last week , said the organization is focused on upgrading its systems to keep up with the changing market landscape. Sexton, who has been at the NFA since 1991 and will take over for current CEO Dan Roth in March, spoke with John Lothian News about his new role and what’s next for the organization. “Some of our technology is old and some of our systems are 10-plus years or older,” Sexton said. Among…

A Basel netting issue: Pushing for less burdensome capital requirements in the options market Standard

The unintended consequences of financial regulation have been seeping into the markets since the first rule was made in the wake of the financial crisis. One prime example is the leverage ratio, which determines the required capital of general clearing members. The actual calculation of the capital requirement within the Basel III leverage ratio framework is a particular sticking point for the OCC. Right now, the Current Exposure Method (CEM) is used in the calculation, whereas the OCC and a wide swath of industry participants believe that the Standardised Approach for Counterparty Credit Risk (SA-CCR) would better encapsulate the nature…