Financial Regulation Roundup: October 19, 2018

Emma Townsend  Follow

Here are the top stories on the financial regulatory landscape in the U.S., EU and around the world over the past two weeks.

U.S. News:

Despite Trump Criticism, Fed Sees Need for More Rate Hikes

  • Federal Reserve policymakers are largely united on the need to raise borrowing costs further, minutes from their most recent policy meeting show, despite U.S. President Donald Trump’s view that interest rate hikes have already gone too far. Every Fed policymaker backed the central bank’s September decision to raise the target policy rate to between 2 percent and 2.25 percent, according to minutes of the Sept. 25-26 meeting, published Wednesday. (Reuters: read more)

SEC Rules NYSE, Nasdaq Didn’t Justify Market Data Fee Increases

  • The Securities and Exchange Commission on Tuesday ruled the country's biggest exchanges didn't justify increases in fees they charge for certain market-data products that brokers and traders consider essential to their business. The commission, in an order released Tuesday, overturned a prior approval of fees charged by the New York Stock Exchange and Nasdaq for specially designed data feeds they sell, which reveal far more detail about market activity than the ticker tape that investors see on financial-news stations. (Fox Business: read more)

Big Firms’ Quarterly Reporting Unlikely to Change ‘Anytime Soon,’ SEC Chief Says

  • Securities and Exchange Commission Chairman Jay Clayton said it’s unlikely that the biggest U.S. companies will start disclosing their earnings less frequently “anytime soon,” indicating he isn’t eager to make a change that President Donald Trump has urged the agency to review. (Bloomberg: read more)

SEC Revives Push to Finish Long-Awaited Swaps Rules

  • The Securities and Exchange Commission took a step toward completing long stalled rules for brokers selling securities-based swaps required by the 2010 Dodd-Frank financial law. By a 4-1 vote, the commission Thursday decided to revive proposals that would set capital and margin requirements for securities-based swaps. It did so by asking for a fresh round of public comment, a necessary step to complete the packages of swaps rules and start requiring broker-dealers to comply with them. (The Wall Street Journal: read more)

J.P. Morgan to Settle Allegations of Violating Sanctions: U.S. Treasury

  • J.P. Morgan Chase Bank (JPM.N) has agreed to pay $5.3 million to settle allegations it violated Cuban Assets Control Regulations, Iranian sanctions and Weapons of Mass Destruction sanctions 87 times, the U.S. Treasury said on Friday. Treasury also said it had found the bank violated sanctions on narcotics and Syria, when it processed 85 transactions, totaling $46,127, and maintained accounts for six sanctioned individuals. (Reuters: read more)

EU News:

Battle Lines are Drawn in Brexit Clearing House Showdown

  • The war of words between the US and the EU over post-Brexit clearing arrangements intensified this week after CFTC Chairman J. Christopher Giancarlo threatened retaliation against financial firms based in EU countries unless the bloc’s rule-makers drop a plan that would give them sweeping power to scrutinize U.S. derivatives clearinghouses. The European Commission on Thursday said proposed powers for EU financial supervisors to oversee derivatives trading were aimed at maintaining open markets and were modelled on the US’s own rules. (Financial Times: read more)

CMA Launch probe into the ‘Big Four’

  • The Competition and Markets Authority announced on the 9th of October that they are launching a probe into the dominance of the ‘Big Four’ accountancy firms. The CMA said it would consider whether the sector is "competitive and resilient enough to maintain high quality standards" following concern that the sector "is not working well for the economy or investors". CMA chief executive Andrea Coscelli stated that it was their intention ‘to move swiftly and to issue our provisional findings before Christmas". (BBC: read more)

International News:

U.S. Tariffs on China Aren’t a Short-Term Strategy

  • While the White House is progressing on trade deals with allies including Canada, Mexico, Korea and Europe, its dispute with China looks increasingly intractable, with tariffs between the world’s two largest economies likely cemented in place for years. In other trade fights, President Trump used tariffs as leverage to reach deals. Threatening car tariffs helped convince Canada and Mexico to concede to U.S. demands for a new North American Free Trade Agreement, the president boasted. “Without tariffs, we wouldn’t be talking about a deal,” he said Oct. 1 in the Rose Garden. China is different. Tariffs aren’t simply a negotiating tactic for the U.S., but a way to change economic incentives. (The Wall Street Journal: read more)

Kuroda Says BOJ Will Use Interest Rates to Signal Exit From Easy Policy

  • When the Bank of Japan is ready to signal the start of an exit from its massive monetary stimulus, the shift will be seen in interest rates, its main policy target, BOJ Governor Haruhiko Kuroda told Bloomberg in an interview on Saturday. “When 2 percent inflation target is met or is close to be met, of course we can change the target, the monetary operating target of interest rate,” Kuroda said, when asked how the BOJ would signal an exit from ultra-easy policy. (Reuters: read more)

China Faces a Bleaker End to 2018 as Central Bank Cuts Reserve Ratio Again

  • China’s central bank cut the amount of cash lenders must hold as reserves for the fourth time this year, as policy makers seek to shore up the faltering domestic economy amid a worsening trade war. The People’s Bank of China lowered the required reserve ratio for some lenders by 1 percentage point, effective from Oct. 15, according to a statement on its website Sunday. The cut will release a total of 1.2 trillion yuan ($175 billion), of which 450 billion yuan is to be used to repay existing medium-term funding facilities which are maturing, the central bank said. (Bloomberg: read more)

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