Articles tagged by SEC
As FX markets continue to anticipate what will happen next following Donald Trump’s surprise victory in the US Presidential election, there could also be significant changes in the country’s regulatory landscape that financial services firms need to consider.
For starters, the Commodity Futures Trading Commission (CFTC) could look very different.
Historically, when there’s a transition of parties, the Chairman of the Commission has tendered their resignation on the inauguration day of the new President and then the remaining Commissioners vote amongst themselves for an acting chairman.
Just weeks after Securities & Exchange Commission (SEC) head Mary Jo White exited the US regulator, the SEC is set to lose a second senior figure.
Stephen Luparello, director of the Division of Trading and Markets, will leave the agency before the end of this year. He was named director of the office in February 2014.
The SEC says Luparello played a key role in enhancing the transparency and strengthening the integrity of US markets, including the operation of trading platforms, clearing agencies, and broker-dealers.
The US Financial Industry Review Authority (FINRA) has filed a notice with the Securities and Exchange Commission that will enable it to clamp down on what it considers “disruptive quoting and trading activity” much quicker than is currently possible.
In the filing FINRA notes that taking action against an alleged miscreant can take “several years” before it is concluded, but it points out that there are, “…certain clear cases of disruptive and manipulative behaviour or cases where the potential harm to investors is so large, that FINRA should have the authority to initiate an expedited proceeding to stop the behaviour from continuing”.
US Commodity Futures Trading Commission chairman Christopher Giancarlo has welcomed an announcement from the Commission’s Market Risk Advisory Committee that it will hold a public meeting on January 31, 2018 to discuss the statutory and regulatory process for the listing of new and novel products on CFTC-regulated designated contract markets and swap execution facilities through self-certification.
At the meeting, which is sponsored by CFTC Commissioner Rostnin Benham, CFTC staff from a variety of operating divisions will provide an overview of the current self-certification process and CFTC authorities and responsibilities related to the oversight, surveillance, and monitoring of listed derivatives products within CFTC jurisdiction.
The US Securities and Exchange Commission (SEC) has said that certain exchanges listing crypto-assets need to register with the agency because they offer trading in products that meet the definition of a “security”.
In particular, it is targeting exchanges that list crypto-assets linked to Initial Coin Offerings (ICOs).
“A number of these platforms provide a mechanism for trading assets that meet the definition of a "security" under the federal securities laws. If a platform offers trading of digital assets that are securities and operates as an "exchange," as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration,” says the SEC in a statement today.
Galen Stops takes a look at how and why Aston Capital Management is planning to scale up following its recent $100m investment.
Aston Capital Management recently received an injection of $100 million in AUM and an additional $5 million in seed operating capital from private investors. Following this investment, the firm’s CEO Isaac Lieberman is, perhaps unsurprisingly, bullish about its future.
“We have a goal through our strategic mandate and product development timeline to have capacity to be managing $2 billion in AUM within two years and I can actually see us achieving this goal quickly as this business accelerates,” he says.
To help achieve this goal, Lieberman has deliberately been structuring the firm so that it can easily scale up in the future. For starters, the firm has been getting a whole slew of regulatory and accountancy registrations in place.
A Securities and Exchanges Commission (SEC) official explicitly stated today that he does not consider bitcoin and ether (the native cryptocurrency of the Ethereum network), to be securities.
Speaking at the Yahoo Finance All Markets Summit in San Francisco, William Hinman, the
Director of the Division of Corporation Finance at the SEC, gave a speech about whether digital assets should be considered as securities.
Hinman pointed out that the network upon which bitcoin functions has always been decentralised and therefore there is no central third party “whose efforts are a key determining factor in the enterprise”.
At the start of 2017, a single bitcoin was valued at less than $1,000, yet by mid-December it had almost hit $20,000. Investors were pouring into the space, Initial Coin Offerings (ICOs) were being launched left, right and centre and - given the limited supply of bitcoins that can ever exist - some market commentators were making wild predictions about how high the value of this asset would ultimately go.
But despite starting the year at around the $15,000 mark, the price of bitcoin has fallen to $6,671 at the time of writing and other major cryptocurrencies have suffered a similar decline. So what went wrong?
From a regulatory perspective, one of the challenges around operating in the crypto markets is that different regulators appear to define cryptoassets in different ways.
For example, the Commodity Futures Trading Commission (CFTC) has defined digital currencies as commodities, while the Securities and Exchange Commission (SEC) seems to think that at least some of them might be securities.
Speaking at Profit & Loss Forex Network New York, Mike Gill, chief of staff to US CFTC chairman, Christopher Giancarlo, and the CFTC’s COO, discussed some of the challenges facing regulators when it comes to defining these products.
Profit & Loss’s latest OnTheBlock series featured a one-one-one discussion with former CFTC staffer Justin Slaughter, now a partner at Mercury Strategies, in which he provided an insider’s perspective on how cryptoassets are being viewed by regulators in Washington, DC.
P&L OnTheBlock: An SEC official recently said that the agency does not view ether[eum] as a security. Does this mean that the issue is settled and the SEC definitely won’t try and regulate it as a security now?
Justin Slaughter: What we are basically hearing is that there isn’t an explicit, major problem with ether as a security. They are not yet saying it's totally, absolutely, not a security.
In this week's In the FICC of it podcast, Colin Lambert and Galen Stops discuss the Mark Johnson trial, pointing out that if the current verdict is upheld despite the ongoing appeal against it and ACIFMA's decision to file an amicus brief in support of the appeal, it could have a very significant impact on both the Global FX Code and how the FX industry operates more broadly. They also look at why crypto regulation is unlikely to move as fast as some people in the industry would like, and why this might not be such a bad thing.
Last week the Securities and Exchange Commission (SEC) declined to approve rule amendments proposed by NYSE Arca and Cboe BZX Exchange to authorise the listing and trading of shares of nine exchange-traded funds (ETFs).
This decision comes after the SEC also rejected the Winklevloss ETF in July that would have traded physical bitcoin, whereas the ones rejected last week planned to seek exposure to some or all of the bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), Cboe Futures Exchange (CFE) and/or any other US exchange that subsequently trades such derivatives contracts.
In this week’s podcast Galen Stops explains the devil in the detail behind the SEC rejecting bitcoin ETFs, the changing market structure in crypto generally, and how market participants are going about institutionalising the new asset class.
Colin Lambert meanwhile, is in a punchy mood and wants to take everything and everybody to task.
They observe how crypto-strategists are just the same as fiat strategists; discuss the barriers to entry for currency managers; the pricing of credit and liquidity in FX; and Lambert in particular has a problem with investors’ approach to allocating to hedge funds.