Week InReview |  SEC advisory group to take up access fee pilot | Treasury to address cash pooling in final debt-equity rules | The Fed's point man on regulation talks about commodities, asset price bubbles, and NIRP  Black swans, game theory, zombie banks, & a killer flash-boy app in  Binge Reading Disorder

Friday, July 8, 2016
Let's recap
In case you missed it . . .

Exchange access fees

SEC to take up potential pilot July 8

(Jul 8) The Securities and Exchange Commission's Equity Market Structure Advisory Committee will hold an open meeting (available via webcast) July 8 to possibly vote on a pilot program for exchange access fees that has drawn some sharp criticism from exchange representatives. The potential pilot discussed in April would lower access fees and collect data on the results. Representatives of the NYSE and Nasdaq criticized the substance of the proposal and the process used to develop it.  The committee also will consider recommendations related to the regulation of trading venues. The group's Regulation NMS and Trading Venues Regulation subcommittees will make presentations.
Cash pooling restrictions
Treasury may ease in final debt-equity rules
(Jul 6) At a Joint Committee on Taxation hearing, Treasury officials told lawmakers they expect to ease the restrictions on cash-pooling transactions in the final version of controversial debt-equity regulations. Cash pooling, a funding technique involving a central bank account used by a group of subsidiaries, has been one of the top concerns for businesses worried about the reach of the proposal that gives the IRS the ability to reclassify intercompany debt as equity.
It's healthy to discuss new ideas
Fed's Tarullo
(Jul 6) Daniel Tarullo, the Fed governor who oversaw the overhaul of Fed's approach to oversight, and a member of the Financial Stability Board's Standing Committee on Supervisory and Regulatory Cooperation, spoke on a wide range of subjects at a media event in Washington DC. Some highlights:
  • Grandfather clause for banks on commodities should end, since it is "anomalous" in bank rules, gives banks wide latitude in owning physical commodities, and allows banks to trade physical commodities
  • He's not worried about asset price bubbles, for now. He also said an increase of short-term rates would "almost surely" flatten the yield curve, and that we have to be "sensitive to what happens meeting to meeting"
  • While the Fed is "not thinking of negative interest rates, our stress test this year actually tested for" just that possibility.
Binge reading disorder
Hand-curated, chosen with love
Central banker who slayed 'Zombie Banks' meets too-big-to-fail

This is what happened to my brain when i spent more time in nature: Studies have shown that spending time in nature can lead to less stress and greater creativity. So I put it to the test.

Black swans and game theory: A post-Brexit guide to bond trading

Forget Brexit, look at China's stealth devaluation of the yuan

Jim Simons has a killer flash-boy app... and you can't have it