Week InReview | U.S. is not a financial island. Stock exchange pricing rules. SEC focus on venture exchange legal issues; will act soon on tick-size pilot plan. Multiemployer plan insolvency.
Friday, March 13, 2015
Former SEC trading & markets director 'uncorked'
Calls stock exchange pricing rules "convoluted" and "illogical"
(Mar. 10) John Ramsey, after taking a revolving door from the SEC to IEX Group Inc, the stock-trading venue founded by Brad Katsuyama, says he's now able to speak "in a way I couldn't have done when I was in the government, because you're always limited by internal politics and not wanting to get too far out in front of the agency." Compares $25 trillion U.S. stock market's structure to the Death Star of "Star Wars."
More progress needed on OTC derivatives oversight
Treasury's Sheets says U.S. is not a financial island
(Mar. 9) The U.S. has led efforts to toughen oversight of OTC derivatives clearing, trading, and reporting, and Japan has been the pacesetter is Asia," says Nathan Sheets, U.S. Treasury's undersecretary for international affairs. In Europe, "while reporting has begun, clearing obligations will likely not start until later this year, and trading rules will not go into effect until 2017," he said in a speech at an economic policy conference in Washington. 
Assessing SEC rules' impact on venture exchanges
Top official delves into the legal issues
(Mar. 10) Stephen Luparello, head of the SEC's division of trading and markets, testified about venture exchanges before the Senate securities subcommittee and said the agency must fully analyze how several aspects of the 1934 Securities Exchange Act would bear on venture-exchange regime. Legal issues involve off-exchange trading and unlisted trading privileges, surrounding potential venture exchanges for small-cap companies. The SEC is studying how best to approach the issue in light of two 1934 Securities Exchange Act provisions that "impose substantial tests" on the agency. 
SEC should act 'very soon' on tick-size pilot plans
Agency has 'every intention' of meeting May 6 deadline
(Mar. 10) The SEC is still considering tick-size pilot plans submitted by stock exchanges and should act "very soon" on program to allow smaller-cap stocks to trade at nickel increments in bid to improve liquidity, Stephen Luparello, head of commission's trading division, tells Senate Banking panel. Last month, the SEC delayed for another two months action on starting a program initially proposed by stock exchanges. Many commenters have said pilot should last longer than a year and extension will give the agency more time to consider such recommendations.
Multiemployer plan participants face significant cuts
Future plans facing insolvency, termination
(Mar. 11) More than half of the participants and beneficiaries in multiemployer defined pension plans that have terminated, but haven't yet begun to receive the Pension Benefit Guaranty Corporation's guaranteed benefits, will face benefits reductions in the near future when they do see those guarantees come in, the PBGC said in a new report.
Transparency. Inclusiveness. Consensus.