Week inBrief

Quote of the Week

"I believe that in cyber, only the paranoid survive." 

Gottfried Leibbrandt
Swift CEO
Friday, September 30, 2016
Let's recap
In case you missed it . . .
Money markets upended as quarter-end strains meet rule shift | Use of Federal Reserve's reverse-repo facility ramps up;  Oct. 14 deadline for money-fund overhaul magnifies pressures (Sep 30)

5 trends affecting commercial real estate | C urrent lending environment is showing signs of reticence as bank reserve requirements from Basel III and CMBS risk retention requirements from Dodd-Frank are due to kick in by late 2016 (Sep 26)

EU may refuse to sign up to new banking rules | Regulatory and banking sources worry global rules, nicknamed "Basel IV" by bankers, put European banks at a disadvantage to U.S. rivals (Sep 26)

BIS: An early warning indicator of financial crises | The Bank for International Settlements now keeps a new set of data-credit-to-GDP (gross domestic product) gaps of economies (Sep 26)

Mortgage insurers net semi-win for bigger piece of Freddie loans |  Freddie pilot will share risk on about $4 billion in mortgages; Fannie Mae plans to finalize similar pilot in fourth quarter (Sep 26)
A shorter window for settling trades
SEC proposes T+2 trade settlement cycle
(Sep 28)  Parties to a securities transaction would have less time to meet their obligations under a rule proposed by a unanimous Securities and Exchange Commission.  Trades would have to be settled within two days of the transaction - T+2. The trade settlement cycle is T+3. Industry groups are trying to get the shorter cycle requirement, which applies to most asset classes, fully implemented by September 2017. Some assets, like money market funds and options, already trade at T+1, and others, including government and municipal securities, are exempt from the proposal.
'Too-big-to-fail' clearing houses
SEC to expand rules
(Sep 28) The Securities and Exchange Commission said it would adopt rules to strengthen the regulatory framework for clearing agencies deemed systemically important or that are involved in complex transactions, such as security-based swaps.  The new rules would enhance existing regulations put in place in 2014 though policies and procedures such as requiring daily stress testing, monthly review and annual validation of credit risk models.  The rules would also increase capital requirements for the agencies and require them to have plans for an orderly recovery or wind-down of their operations.  The SEC also agreed to consider expanding the scope of the rules to include any registered clearing agency that provides the services of a central counterparty, central securities depository or a securities settlement system.
CFTC expands swap clearing requirement
Regulator approves amendment to CFTC rule
(Sep 28)  The Commodity Futures Trading Commission expanded its swaps clearing requirement to include interest rate swaps denominated in nine additional currencies.  The regulator voted unanimously to approve an amendment to CFTC regulation 50.4(a) that establishes a new clearing requirement determination. Market participants must submit a swap identified in expanded regulation 50.4(a) for clearing by a derivatives clearing organization.  The commission's first clearing requirement, adopted in 2012, applied to interest rate swaps denominated in four currencies - U.S. dollar, euro, British sterling, and Japanese yen. The expansion of the requirement will include those denominated in the Australian dollar, Canadian dollar, Hong Kong dollar, Singapore dollar, Mexican peso, Norwegian krone, Polish zloty, Swedish krona, and Swiss franc.
Binge reading disorder
Hand-curated, chosen with love
You do not want to be on the radar of the IRS wealth squad | 'These are the audits from hell that your grandfather warned you about.'
Brexit lessons from Henry VIII, or, a tale of two divorces | Henry's 1534 break with Rome represents the last time the nation formally declared its independence from continental Europe

Black moon rising: Friday's rare lunar event explained (+video) |  This week's black moon is the latest in a slew of seemingly special lunar events - blue moons, blood moons, supermoons and more. But why do we make such distinctions?
How to hide it: inside the secret world of wealth managers | They know more about their clients than the clients' own wives. They are loyal in the face of appalling behavior. They are the brains behind the most ingenious tax avoidance schemes. And there are more of them than ever.

SEC's pursuit of Leon Cooperman rattles hedge fund industry | Era of personality-driven funds of old may be coming to a close
Transparency.
Inclusiveness.
Consensus.