Week InReview:  December 12, 2014

If Treasuries Are Manipulated, Good Luck Finding Any Cops | (Dec. 11) Rules first enacted in 1986 that have gone virtually untouched for a decade and a half are allowing computerized firms to outmaneuver less-savvy rivals and, some executives assert, manipulate prices. They say a lack of cohesive regulation and technology to monitor high-frequency traders is making the world's biggest government bond market more dangerous for everyone. Read more.

SEC Chair White Says Agency Will Step up Scrutiny of Asset Managers | (Dec. 11) The Securities and Exchange Commission is preparing a sweeping set of rules to police mutual funds that have increasingly moved into complex and harder-to-sell investments. "A broader set of proactive initiatives is required to help ensure that our regulatory program is fully addressing the increasingly complex portfolio composition and operatives of today's asset management industry," SEC Chair Mary Jo White said. Read more.

SEC Said to Seek S&P's Suspension of CMBS Rating | (Dec. 8) As S&P faces a CMBS deals ban, the firm and its credit rater peers have seen fewer of these actions in 2014. By suspending S&P from one of the more profitable areas of the business, the SEC would seek to curb a practice known as ratings shopping, where bond issuers hire the companies willing to offer the best grades. Read more. 

SEC Approves MSRB Best-Execution Rule for Retail Customer Transactions | (Dec. 8) The Municipal Securities Rulemaking Board announced the Securities and Exchange Commission approved its proposal to require municipal securities dealers to seek the most favorable terms reasonably available for retail customer transactions. Proposed in August, the rule became effective Dec. 7. Read more.

FASB Proposes Disclosure Requirements About Investment Companies' Investments | (Dec. 5) The Financial Accounting Standards Board is seeking comments on a narrow proposal that will require all investment companies to disclose information about their investee fund investments, which exceed five percent of their net assets. The guidance would also require all feeder funds in a master-feeder arrangement to provide the financial statements of the master fund along with their own financial statements. Read more.

This is not an all-inclusive list of congressional, agency and market participant actions related to these issues. It is a snap-shot of what we believe is of most interest to institutional investors. Some links are to subscriber-only sites. 

Be sure to check our website for this InReview, upcoming events, and all our INVESTORS updates.  www.association.institutionalINVESTORS.org