Prosek’s Financial Regulation Roundup: August 25, 2017

August 25, 2017 Rupert Eyles

• Federal Reserve Chair: White House economic adviser Gary Cohn is emerging as the clear front-runner for the nomination to succeed Federal Reserve Chair Janet Yellen, according to a National Association for Business Economics survey. Just 17 percent of 176 economists polled from July 18 to Aug. 2 said Yellen would be picked for a second term. Two-thirds said she wouldn’t be renominated and 16 percent were unsure. Her four-year term ends in February. (read here)
• Volcker Rule/Basel III: Rolling back some elements of the Volcker rule that target fixed-income markets might make headlines, sources said, but liquidity and trading costs won't improve in the corporate bond market because Basel III requirements aren't going away. (read here)
• Deregulation Cost Savings: The deregulation winds blowing through Washington could add $27 billion of gross profit at the six largest U.S. banks, lifting their annual pretax income by about 20 percent. JPMorgan Chase & Co. and Morgan Stanley would benefit most from changes to post-crisis banking rules proposed by Donald Trump’s administration, with pretax profit jumping 22 percent, according to estimates by Bloomberg based on discussions with analysts and the banks’ own disclosures. (read here)
• Consumer Protection: When a data breach at Home Depot in 2014 led to losses for banks nationwide, a group of banks filed a class-action lawsuit seeking compensation. Companies have the choice of taking legal action together. Yet consumers are frequently blocked from exercising the same legal right when they believe that companies have wronged them. By blocking group lawsuits, mandatory arbitration clauses eliminate a powerful means to get justice when a little harm happens to a lot of people. It is the height of hypocrisy for companies to say they’re helping consumers by closing off the very same legal option they use when they’ve been wronged. (read here)

• FCA Stops 200 Trading Firms Over “Basic” Requirements: More than 200 firms had their authorizations cancelled by the Financial Conduct Authority in the 12 months to the end of June, the regulator has revealed. In its latest regulatory round-up, the FCA said these firms had their authorizations cancelled for failing to comply with “basic regulatory requirements.” These could include failing to submit FCA returns or failing to pay fees to the regulator. (read more)
• APA Approvals For MiFID II Reporting: Yesterday six entities received official approval by the Financial Conduct Authority to act as APAs under MiFID II. These include Abide Financial DRSP Limited, Bats Trading Limited, Bloomberg Data Reporting Services Limited, the London Stock Exchange, Tradeweb Europe Limited and Xtrakter Limited. From 3 January onwards, Mifid II requires third parties publishing data to be authorised as APAs. (read more)
• Financial Regulation To Stay High Post Brexit: In an interview with the Guardian newspaper to mark 10 years since the start of the global financial crisis Mark Carney said that financial regulation in the UK should remain “at least as high as it currently is” to protect the economy from a financial sector that could double in size within the next 25 years. (read more)