US - New Legislation

Re: US - New Legislation

Postby millionairemind » Mon Mar 22, 2010 9:59 am

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Mar 22, 2010
Fight on financial reform
WASHINGTON - THE tactics Republicans deploy as the US Senate Banking Committee begins hashing out new rules for financial products, banks and derivatives on Monday could signal whether a bipartisan bill will emerge.

Republicans are expected to offer hundreds of amendments to a bill being offered by the panel's Democratic chairman, Senator Christopher Dodd, Senate aides said.

If Republicans insist on debating all of them, it will show a desire to kill the Dodd bill by delay, pressuring Democrats to move forward on a party-line vote.

But an agreement by Republicans to debate a reasonable number of substantive amendments during what is likely to be a week-long series of bill-drafting meetings could be a sign that a bipartisan bill may yet emerge from the committee. The panel is scheduled to begin its effort at 5pm EDT (2100 GMT, 5am Singapore time) on Monday.

If a bill emerges without any Republican support, it is unlikely Democrats will be able to muster the 60 votes that are likely to be required to move the legislation on the Senate floor. They control only 59 votes.

That could doom hopes for a broad rewrite of financial rules meant to ward off future crises like the one that punished the US economy with its deepest recession since the Great Depression. It would be a big blow to the Obama administration, which had made a regulatory revamp a top legislative priority. -- REUTERS
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: US - New Legislation

Postby winston » Mon Mar 22, 2010 10:47 am

Healtcare Bill passed. They need 216 votes. Just got 219
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: US - New Legislation

Postby millionairemind » Fri May 07, 2010 1:15 pm

May 7, 2010
2 financial reform plans fail

WASHINGTON - TWO contentious regulatory measures - one to dilute consumer provisions and the other to break up large banks - failed in the Senate on Thursday in separate defeats for Republicans and liberal Democrats.

Prodded by President Barack Obama, the Senate rejected a Republican consumer protection plan that would have diluted a central element of the administration's financial regulation package.

The 61-38 vote cleared one of the sharpest partisan disputes over a sweeping overhaul of financial regulations.

Democrats and the president argued that the Republican proposal would have 'gutted' consumer protections. Only two Republicans - Sen Olympia Snowe of Maine and Sen Charles Grassley of Iowa - joining Democrats to defeat the Republican measure.

Democrats and Republicans joined, however, to reject a proposal to limit the size of the nation's largest banks as a means of reining in the financial sector. That vote was 61-33, with 33 Republicans and 27 Democrats and one independent voting to kill the measure.

In both votes, the Obama administration prevailed. It had forcefully pressed to kill the Republican's consumer proposal and had more gently argued against the bank size limits, arguing that size alone was not at the root of the 2008 financial crisis. -- AP
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: US - New Legislation

Postby LenaHuat » Fri May 07, 2010 5:16 pm

In both votes, the Obama administration prevailed. It had forcefully pressed to kill the Republican's consumer proposal and had more gently argued against the bank size limits, arguing that size alone was not at the root of the 2008 financial crisis.


Obama is running a streak of good luck. Apart from luck, I'm impressed with his intellectual vigor.
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Re: US - New Legislation

Postby millionairemind » Tue May 11, 2010 8:39 am

May 11, 2010
High-risk speculation targeted
WASHINGTON - US SENATORS on Monday unveiled a proposal to curb high-risk, speculative trading by banks and predicted it stood an 'extremely good chance' of passing as part of a broader Wall Street overhaul.

The measure, crafted by Democratic Senators Jeff Merkley and Carl Levin, would also bar banks and bank holding companies as well as their subsidiaries from investing in or sponsoring a hedge fund or private equity fund.

The proposal, an amendment to the most sweeping regulatory overhaul of the financial industry since the Great Depression of the 1930s, would also require big non-bank financial firms to set aside additional capital to mitigate risks from speculative trading.

And it would look to prevent large financial firms from betting against packages of securities they sell to their clients.

The measure bars banks, bank holding companies, and their affiliates and subsidiaries from engaging in high-risk speculation involving any stock, bond, option, commodity, derivative, or other security or financial instrument.

Senate Banking Committee Chairman Chris Dodd backs the measure, the lawmakers said. 'We are confident that this will be voted on, and we're confident that we'll have not only Senator Dodd's support but with that support have an extremely good chance of passing' the measure, said Mr Levin. -- AFP
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: US - New Legislation

Postby millionairemind » Sun May 16, 2010 6:45 pm

The Senate financial-reform bill
Maul street
Bit by bit, things worsen for the financial industry

May 13th 2010 | WASHINGTON, DC | From The Economist print edition
Lincoln smiles, banks blanch

THE American Senate is supposed to bathe radical proposals in a breeze of moderation and reason. The opposite seems to be happening with the financial-reform bill. As it makes its way through the legislative process the bill has become progressively more hostile to Wall Street. Among the hundreds of amendments being proposed on the Senate floor are an even stricter ban on proprietary trading than originally envisaged, caps on debit- and credit-card “interchange” fees, higher deposit-insurance fees for big banks, and (potentially most serious of all) the imposition of fiduciary duties on marketmakers.

Many of these will not pass, but those that have are stringent. A draconian prohibition on banks operating derivatives-swaps desks was incorporated into the bill despite furious industry opposition. Blanche Lincoln, the Arkansas Democrat who first proposed the prohibition, has since clarified that bank-holding companies (like Citigroup) could still own a swaps desk, but a bank itself (like Citibank), which benefits from various federal backstops, could not. The industry is not comforted: creating a separate swaps unit within a holding company would require an additional $110 billion-$200 billion in capital, says the Securities Industry and Financial Markets Association. Many banks would probably just give up the business.

The provision is opposed by regulators and, reportedly, by the administration. Opponents hope it will be dropped, perhaps after Ms Lincoln has beaten back a left-wing challenger to the Democratic nomination for her seat on May 18th. But the industry looks unlikely to stop the bill’s requirements to funnel derivatives trading through exchanges and clearinghouses.

Another key shift has been on the “resolution authority” that is designed to allow regulators to seize a troubled financial firm and meet creditor claims while liquidating the firm in an orderly manner. Chris Dodd, the chairman of the Senate Banking Committee, originally proposed that the industry pay into a $50 billion fund that would cover any shortfall between a failed firm’s assets and creditors’ claims. Republicans huffed that such a fund would be seen as a promise to bail out all and sundry.

Mr Dodd has agreed to drop the fund (though the costs can be recovered after a bankruptcy) and to require regulators to recoup any benefit creditors enjoy from a bail-out. In other words, if a creditor who would have got 60 cents on the dollar in bankruptcy instead gets 100 cents, he may have to repay the 40-cent difference.

The change has vastly improved the chances that the bill will become law. It also lightens the upfront financial burden on banks. But creditors fearing only a partial recovery may be more tempted to yank their money before a troubled firm is seized, risking the very collapse the resolution authority aims to prevent. Against that, the bill does spare fully secured creditors from the recouping process.

The banks are not the only institutions in the line of fire. On May 11th an amendment subjecting the Federal Reserve’s emergency lending during the crisis to a one-time congressional audit was approved. The disclosure of which of the nation’s largest banks got how much from the Fed will no doubt provoke more outrage (even if the Fed got every penny back, plus interest). Still, the provision was watered down from its original requirement that emergency loans and monetary policy both undergo regular audits, which would have undermined the Fed’s independence
. And a separate amendment lets the Fed keep oversight of some small banks.

Democrats hope the Senate will pass the bill in the next week or so. Differences with a parallel bill in the House of Representatives will then have to be ironed out. Even then, Wall Street cannot rest easy. On May 11th the Federal Deposit Insurance Corporation passed a requirement that banks retain a portion of loans that they securitise. It is not just Congress that is bent on corralling finance.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: US - New Legislation

Postby millionairemind » Fri Jun 25, 2010 7:32 am

UPDATE 2-Senate urges tougher Volcker rule, with exemption
Thu Jun 24, 2010 6:36pm EDT

* Private equity, hedge fund investments exemption sought

* House team on negotiating panel must respond to Senate (Adds Senate proposal details, Dodd's comment, bylines)


By Kevin Drawbaugh and Andy Sullivan

WASHINGTON, June 24 (Reuters) - Banks would face stricter limits on risky trading and investing, but could make small investments in private equity and hedge funds under a modified "Volcker rule" backed by U.S. Senate Democrats on Thursday.

In a victory for financial institutions that had pushed for a fund-investing loophole in the bill, the head of the Senate's negotiating team on a panel writing landmark Wall Street reform legislation proposed changes to the controversial rule.

Democratic Senator Christopher Dodd proposed that up to 3 percent of a bank's tangible common equity could be invested in such funds, but that a bank's investment in any one fund could not exceed 3 percent of the fund's total ownership interest.

Banks would have some time to sell off stakes in private equity and hedge funds that exceed the new caps, he said.

Some of Wall Street's largest financial institutions, such as Goldman Sachs (GS.N), JPMorgan Chase (JPM.N), Credit Suisse (CSGN.VX) and Citigroup (C.N) have been deeply involved in private equity deals and could face changes, analysts said.

"One goal of these limits is to reduce participation in high-risk activity that can cause significant losses at institutions which are central to the financial system," Dodd told the joint Senate-House of Representatives panel.

The House team on the panel must react to Dodd's proposal.

He further proposed toughening the Volcker rule -- named after White House economic adviser Paul Volcker -- to give regulators less leeway in implementing it and requiring non-bank firms that do risky trading to hold more capital.

The Volcker rule, backed by the Obama administration, would bar banks from doing "proprietary trading" for their own accounts that is unrelated to the needs of their customers.

"This proposal addresses the underlying concern of putting depository funds at risk. ... It puts a stop to proprietary trading, but also recognizes that there are legitimate hedging activities that banks need to engage in," Dodd said.

A new interagency Financial Stability Oversight Council, also proposed as part of the overall legislation, would have to study the Volcker rule and regulators would have nine months after that to implement it, Dodd proposed.

Financial services afirms would have a year to comply with the new rules after regulators issue them, he said.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: US - New Legislation

Postby millionairemind » Sat Jun 26, 2010 6:35 am

The lobbyists won at the end.

Published June 26, 2010

Marathon bill ends Wall St's run of fear

Relief in the industry as horse-trading waters down final version of tough financial reform bill


By ANDREW MARKS
NEW YORK CORRESPONDENT

THE feared reforms that have kept Wall Street on edge and nervous for months finally arrived at dawn yesterday.

Touted as the most onerous reforms of the American financial system since the Great Depression, the compromise bill that finally emerged was a mercifully watered-down version that drew a collective sigh of relief from the US financial industry.

After several months of furious lobbying and contentious negotiations between lawmakers, a House-Senate committee successfully ended a nearly 24-hour marathon session with the passage of compromise legislation between separate House and Senate bills.

The provisions are aimed at toughening financial regulations and curb the worst excesses of Wall Street that led to the 2008 financial crisis that rocked the world financial system.

The deal struck now makes a vote by both houses of Congress on the full bill a certainty next week, and its passage almost a foregone conclusion. The final compromise was finessed when lawmakers overcame sticking points that had threatened to scuttle the bill.

They agreed to water down a proposal that would have required banks to spin off their lucrative swaps-dealing business to a separately capitalised affiliate.

The compromise allows banks to stay in foreign-exchange and interest-rate swaps dealing, which accounts for the bulk of the over-the-counter derivatives market.


The financial industry also won significant concessions in the so-called Volcker Rule, named after White House economic adviser Paul Volcker. Although the final version would give regulators little room to waive the trading ban, it would on the other hand allow banks to invest up to 3 per cent of their tangible equity in hedge funds and private equity funds.


Speaking after the breakthrough in the negotiations, President Barack Obama said the bill would hold Wall Street accountable and help prevent another economic meltdown. 'We are poised to pass the toughest financial reform since the ones we created in the aftermath of the Great Depression,' he said at the White House, boosted by the deal as he headed to a global economic summit in Canada over the weekend.

Fittingly, the final bill reconciled from the two separate house bills will be ready for Mr Obama to sign into law by July 4 - Independence Day in the US.

On Wall Street, bankers contacted sounded relieved by the package. The initial consensus appeared to be that while the legislation will present a big regulatory change and challenges for bank profit-making, it could have been much tougher.

'It means a heavy dose of regulation for an industry that has been operating under the opposite conditions, of massive deregulation of its business, for the last 50 years, but for the most part everyone was braced for a far worse scenario in terms of restrictions,' said Joe Battipaglia, investment strategist at Stifel Nicolaus.

Indeed, although major investment banks such as Goldman Sachs, Morgan Stanley and JP Morgan will have to deal with limits on proprietary trading and their swaps desks, that is a far cry from having to get rid of one of their most profitable businesses altogether, a provision that was still very much on the table when the joint House committee convened for this final round of negotiations on Thursday morning.

'In the end, it's not going to hit us too hard. This could have been a lot harsher,' said a swaps trader. 'I mean, a couple weeks ago, people were worried for their jobs.'

Indeed, Wall Street industry veterans such as Nicholas Colas, chief market strategist at ConvergEx Group, feel that the legislation is so full of loopholes and softened regulations that it will not prove to be a 'game-changer' for the way business is done on Wall Street, or throughout the global finance system for that matter.

'I would assume a positive response from the markets on this because it ultimately doesn't go anywhere near as far as people in the industry were fearing.'

The final revision of the Volcker rule, for instance, probably the most feared provision of the law, merely restricts, but does not prevent, banks whose deposits are federally insured from trading for their own benefit.

'What stands out to me is that the legislation doesn't address in a meaningful way 'Too Big to Fail' - you'd think that would be the main accomplishment of the reform, to ensure that we can't have a repeat of what took place in the fall of 2008, where one of a half dozen banks can take down the entire US financial system,' said Mr Colas.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: US - New Legislation

Postby millionairemind » Wed Sep 08, 2010 8:46 pm

September 8, 2010, 6.17 am (Singapore time)

SEC probes flood of orders in US stock market


NEW YORK - US regulators are looking for possible fraud related to the large numbers of rapid-fire stock orders that are placed and cancelled almost immediately, a common practice in today's markets, Securities and Exchange Commission Chairman Mary Schapiro said on Tuesday.

Mr Schapiro, addressing the Economic Club of New York, broadened the already wide array of issues the SEC is looking at in the wake of the flash crash, including the fact that some firms regularly send more than 90 buy or sell orders for every trade they ultimately make.

'People don't realise the velocity of trading and the volume of trading at the multiple venues that exist,' Mr Schapiro told reporters on the sidelines of the luncheon.

'I thought it would be helpful to give people a sense of what the numbers tell us.'

Regulators are looking at what has recently come to be called 'quote stuffing' - the flooding of markets with bogus orders - in connection with the mysterious May 6 'flash crash,' when the Dow Jones industrial average dropped dramatically before quickly recovering.

'The SEC and other regulators are looking carefully at certain practices in this area to assess whether they violate existing rules against fraudulent or other improper behaviour,' Ms Schapiro said in her address.

'Quote stuffing' is not seen as the cause of the dramatic market drop, sources have said. A report that may explain the flash crash is expected towards the end of the month, Ms Schapiro told Reuters before delivering the speech.

Regardless, the SEC has introduced a pilot 'circuit breaker' programme that pauses trading in a single stock if that stock is in a free fall. Ms Schapiro said the circuit breaker program - which stops trading for five minutes if a stock falls more than 10 per cent in five minutes - can be improved.

'Currently, the circuit breakers can be triggered by anomalous trades that may not warrant pausing all trading in the stock for five minutes,' Ms Schapiro said.

Ms Schapiro said the SEC's next steps are likely to include a careful review of a limit-up and limit-down procedure that would directly prevent trades outside specified parameters, while allowing trading to continue within those parameters.


A limit-up and limit-down rule, used in futures markets, is seen as a possible alternative to circuit breakers.

Elsewhere, Ms Schapiro said new rules for registered market makers - firms that take both sides of the market, providing liquidity - should be considered. She later told reporters the SEC is in the early stages of considering what benefits these firms should receive in return for obligations.

'Evolution, not revolution'

The SEC has undertaken a review of the structure of markets, which has changed dramatically over the years. Robert Greifeld, chief executive of exchange operator Nasdaq OMX Group, told reporters at the luncheon that the wide-ranging debate represents an 'evolution, not revolution' in market structure.

Quote stuffing is a term coined by Nanex LLC, a trade database developer that issued a study suggesting computer algorithms did this to gain an edge during the May 6 crash. The study argued that high-frequency traders regularly use the bogus orders to distract rival trading firms and to create profitable arbitrage opportunities between marketplaces.

Investors could make trades under the false impression that those orders were legitimate, only to see liquidity disappear and the market move against them when the orders are cancelled - all in the blink of an eye.

The SEC is looking at the rules for high-frequency traders.

The flash crash threw the rapid trading industry in the spotlight, triggering some lawmakers to call on the SEC to rein in the practice.

On Tuesday, New York Senator Charles Schumer urged the SEC to consider new rules to slow the rapid trades when the market is volatile. Mr Schumer, who sits on a committee that oversees the SEC, said the regulator should consider imposing a minimum quote duration so orders cannot be sent and cancelled in a fraction of a second.

Mr Schumer has inserted himself in other market structure issues and last year called on the SEC to ban flash orders, which give advance knowledge of stock orders to some traders.

The SEC has since proposed a ban on the flash orders. The agency has also proposed ways to shed light on anonymous venues known as dark pools, where much institutional trading is done.

The SEC is trying to adopt the rules before they are forced to craft about 100 rules under the Dodd-Frank financial regulation bill. Ms Schapiro did not provide a timeline for the market structure rules. -- REUTERS
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: US - New Legislation

Postby winston » Fri Jun 24, 2011 9:27 am

What are the consequences of this ?

Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15 by Tyler Durden

In conjunction with this new regulation, FOREX.com must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.


http://www.zerohedge.com/article/tradin ... ng-july-15
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