Most Read
- Merrill Lynch Speeds Up Application Development
- Buy Side Seeks Independent Valuation Providers for OTC Derivatives After Credit Crisis
- Getting That Single Version of the Truth on Wall Street
- SR Labs Unveils Low Latency OMS with Market Data
- Is Wall Street Ready for the iPhone?
- The OMS Dilemma: Speed vs. Intelligence
- REG NMS Cheat Sheet
- How the NYSE Achieves Low Latency
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FINRA Issues Guidelines to Prevent Rogue Trading
April 14, 2008 @ 05:04 PM | By Melanie Rodier
In the aftermath of the clamorous Soc Gen scandal , FINRA has issued guidance to financial firms outlining best practices for detecting and preventing rogue trading.
FINRA CEO Mary L. Schapiro pointed out that while rogue trading isn't new, pervasive elctronic trading and market lingages have increased pressure on some firms to relax internal controls.
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SocGen: Another Trader is Detained
March 12, 2008 @ 01:04 PM | By Melanie Rodier
SocGen confirmed that police just searched its trading floor and held another trader and former colleague of rogue trader Jerome Kerviel, for questioning. Some records were also taken away by officers.
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IT Vendor Management More Important than Ever for Financial Firms
March 05, 2008 @ 10:29 AM | By Melanie Rodier
A new survey has found that IT vendor management is becoming increasingly important for banks, who now consider it an enterprise-wide issue that can help significantly reduce costs, as well as reduce corporate reputation risk.
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Soc Gen: Bank's Controls Didn't Work, says report
February 04, 2008 @ 02:43 PM | By Melanie Rodier
Christine Lagarde, France's economy minister, said some of Societe Generale's internal controls failed to work, leading to the scandal of the junior trader who "lost" $7 billion.
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Bird Flu Pandemic: Will Telecommuting Work on Wall Street?
January 30, 2008 @ 04:08 PM | By Melanie Rodier
While most large financial institution firms plan to rely on telecommuting in the case of a pandemic - new results of a financial industry drill show that few employees actually did telecommute at all.
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Societe Generale: Could it Have Prevented $7.2 billion fraud?
January 29, 2008 @ 03:46 PM | By Melanie Rodier
Jerome Kerviel, the Societe Generale trader who allegedly carried out a $7.2 billion fraud, confessed to police that he hid his activities from his superiors, and claimed both he and other employees had been carrying out risky trades since 2005. So how could Soc Gen have prevented the fraud?
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How Did the Societe Generale Fraud Happen?
January 24, 2008 @ 12:53 PM | By Melanie Rodier
France's second biggest bank, Societe Generale, is reeling from the discovery of a $7.14 billion fraud committed in 2007 and 2008 by Jerome Kerviel, a trader working on the futures desk at the bank's headquarters in Paris. So how did such massive fraud happen and lie undetected for so long?
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Brokerage Employee Pleads Guilty to Insider Trading Conspiracy
January 23, 2008 @ 02:11 PM | By Melanie Rodier
As one of Wall Street's most far-reaching cases of insider trading continues to unravel, a former employee of Hoboken, NJ-based brokerage firm Assent has pleaded guilty to conspiracy, after admitting he accepted bribes to conceal illegal trades based on inside information provided by a former employee at UBS.
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Financial Firms Must Spend More on Anti-Money Laundering
January 15, 2008 @ 05:34 PM | By Melanie Rodier
Financial firms say they need to dedicate more resources to their anti-money laundering (AML) programs and focus more on regulatory risk - the risk associated with the potential for laws to change and impact relevant investments, according to a new survey by London, UK-based Ernst & Young.
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SEC's Old Computer System Is Hampering Efforts to Stop Insider Trading
December 18, 2007 @ 04:58 PM | By Melanie Rodier
A new report found that deficiencies in the SEC's computer system are hampering the watchdog's efforts to thwart insider trading and spot other regulatory violations.
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What is the Actual Cost of a Data Breach for a Financial Firm?
November 28, 2007 @ 01:45 PM | By Melanie Rodier
As the number of data breaches reported annually continues to surge, costs incurred by companies who report an incident are also increasing, according to a new study by security and privacy research organization, the Ponemon Institute.
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How Well Can Wall Street Handle Pandemic Flu? Drill Results Are Mixed…
November 19, 2007 @ 03:34 PM | By Melanie Rodier
With bird flu outbreaks cropping up from Europe to Asia, scientists say the new pattern of spreading infection makes a worldwide human pandemic more likely. So how well prepared are U.S. financial firms for a pandemic?
Well, 2,775 financial firms recently took part in a drill to try and answer that very question.
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SEC Brings 14 Percent more cases, Insider Trading Focus set to Continue in 2008
November 13, 2007 @ 06:13 PM | By Melanie Rodier
The U.S. Securities and Exchange Commission (SEC) brought 14 percent more enforcement cases in fiscal 2007, the first increase in four years, according to official figures released this week.
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U.S. Banks Are Targets in 60% of Worldwide Phishing Attacks
November 13, 2007 @ 05:30 PM | By Melanie Rodier
A new report revealed that 60% of phishing attacks against global banking brands are targeted against U.S. institutions. UK banks trail in second place, although they currently are the victims in just 16% of all cases.
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More than 200 Bills on Identity Theft Pending, study reveals
November 06, 2007 @ 04:01 PM | By Melanie Rodier
Identity theft and consumer protection are a bigger priority than ever for state legislators, according to a new study by Boston-based Aite Group, which found that more than 200 bills focusing on the issue are currently pending at state level. As a result, financial institutions must keep a careful eye on any changes and be prepared to act on state legislature to avoid costly fines.
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Complinet launches global Online Networking Community for compliance professionals
November 02, 2007 @ 03:03 PM | By Melanie Rodier
Complinet, a provider of global compliance solutions, has launched a global networking community for compliance professionals in the financial services industry, enabling peer group information exchange about regulations and compliance.
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Oppenheimer & Co. fined $1M by FINRA
October 30, 2007 @ 04:36 PM | By Melanie Rodier
Oppenheimer & Co. Inc. has agreed to pay $1 million to settle charges it produced "flawed, incomplete and untimely data" in breakpoint self-assessment, the Financial Industry Regulatory Authority announced.
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FSA Dives into Hedge Funds and Sets Out Guidelines to Prevent Market Abuse
October 29, 2007 @ 04:11 PM | By Melanie Rodier
The UK's Financial Services Authority (FSA) is launching a formal assessment of the systems hedge fund managers have in place to prevent market abuse, after being "disappointed" by the controls at firms it visited.
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SEC heightens battle against "rampant" insider trading among Wall Street professionals, hedge funds, international rings
October 29, 2007 @ 12:48 PM | By Melanie Rodier
The SEC is stepping up its efforts to fight what a senior official called "rampant" insider trading among Wall Street professionals, and has formed a working group to focus on the crime. Peter Bresnan, the SEC's deputy director of enforcement, said the agency is seeing a trend in larger rings involving more people, international cases, as well as those involving securities professionals and hedge funds.
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MiFID Uncertainty Persists as Implementation Day Approaches
October 24, 2007 @ 12:57 PM | By Melanie Rodier
With the implementation of the Markets in Financial Instruments Directive (MiFID) just days away, a new study has found that a massive 93% of financial services institutions do not believe that MiFID will be consistently implemented and enforced across Europe.
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How can Companies Avoid Fines? Ex-SEC commissioner Offers Some Clues
October 23, 2007 @ 01:02 PM | By Melanie Rodier
Former SEC acting chairman and commissioner Laura Unger says companies should adopt cutting-edge technology and a best practices approach if they want to keep ahead of the regulators and avoid costly fines.
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Regulator Probes Bear Stearns
October 19, 2007 @ 03:39 PM | By Melanie Rodier
Bear Stearns is being investigated by Massachusetts securities regulators over whether the brokerage improperly traded with two in-house hedge funds that collapsed last summer, burdening investors with added losses.
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SEC sues New York Hedge Fund Over Illegal Trades
October 15, 2007 @ 05:17 PM | By Melanie Rodier
The Securities and Exchange Commission (SEC), which recently heightened its scrutiny of the hedge fund industry, is suing a New York hedge fund and its principal, alleging the fund made more than $1.48 million in profits from illegal trading.
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Trading Technologies wins $3.5 million patent suit against eSpeed
October 11, 2007 @ 05:17 PM | By Melanie Rodier
Trading Technologies, the world's largest technology provider for futures trading, has won a three-year-long lawsuit against eSpeed, the electronic bond trading unit of Cantor Fitzgerald
A jury in the U.S. District Court for the Northern District of Illinois awarded Trading Technologies $3.5 million after finding that certain versions of eSpeed's futures-trading software, last used three years ago, infringed on its patents.
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Regulators slap Morgan Stanley with another $7.5 million fine
October 10, 2007 @ 04:54 PM | By Melanie Rodier
Morgan Stanley has agreed to pay a $7.5 million fine to settle charges that over a five year period it provided customers with insufficient written trade confirmations for municipal securities and bonds, the Securities and Exchange Commission (SEC) said.
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EU Regulators Probe Thomson-Reuters deal
October 09, 2007 @ 04:33 PM | By Melanie Rodier
The European Commission has opened an in-depth investigation into the $18.4 billion takeover of Reuters by Canadian financial information company Thomson, saying the merger raises "serious doubts" about fair competition in the financial information business.
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NYSE fines Citigroup, DeutscheBank, UBS, JP Morgan and 11 other Wall St firms $10.4 million
October 08, 2007 @ 06:04 PM | By Melanie Rodier
The New York Stock Exchange (NYSE) fined 15 Wall Street firms a total of $10.4 million for violating rules governing delivery of prospectuses and other information to investors.
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Pump-and-dump spam down 30 percent following SEC drive
October 08, 2007 @ 05:44 PM | By Melanie Rodier
Pump-and-dump spam touting particular stocks has become one of the most common type of nuisance e-mail worldwide. But the Securities and Exchange Commission (SEC)’s anti-spam drive, code-named Operation Spamalot, has now caused a massive drop in this type of spam, according to new findings.
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SEC Enforcement Cases Rise for the first time Since 2003
October 05, 2007 @ 04:14 PM | By Melanie Rodier
The U.S. Securities and Exchange Commission (SEC) has been particularly busy this year, increasing enforcement actions in fiscal 2007 for the first time in four years.
Since 2003, charges brought by the SEC had fallen at an average rate of 5 percent per year. They reached a record high of 679 in 2003, following accounting frauds at Enron Corp. and WorldCom Inc.
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Morgan Stanley to pay $12.5 million fine to settle 9/11 e-mail charges
September 27, 2007 @ 05:26 PM | By Melanie Rodier
Morgan Stanley has agreed to pay $12.5 million to settle a case brought by the Financial Industry Regulatory Authority (formerly NASD) for failing to produce pre-9/11 e-mails to regulators and investor plaintiffs, while claiming that the destruction of the firm's email servers in the Sept. 11, 2001 terrorist attacks on New York's World Trade Center resulted in the loss of all pre-9/11 email.
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SEC May Act Too Fast in International Insider-Trading Cases like Dow Jones
September 25, 2007 @ 05:41 PM | By Melanie Rodier
The U.S. Securities and Exchange Commission (SEC)'s complaint in May against a Hong Kong couple for insider trading of Dow Jones stock may have come up against a brick wall.
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SEC Scrutinizes Hedge Funds for Insider Trading
September 19, 2007 @ 11:46 AM | By Melanie Rodier
The U.S. Securities and Exchange Commission (SEC) is scrutinizing hedge funds for signs of insider trading.
The regulator has been sending out a 27-page letter to registered advisers, asking them for information about relationships between managers, employees, family members and public companies.
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Regulator charges Morgan Stanley over Cold Calls
September 12, 2007 @ 04:05 PM | By Melanie Rodier
Massachusetts’ top securities regulator has charged Morgan Stanley and two Boston employees with illegally contacting clients by cold-calling people who posted resumes on the CareerBuilder.com Web site.
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SEC Continues to Encourage Interactive Filing, as NYSE Becomes First Exchange to Sign Up
September 12, 2007 @ 11:51 AM | By Melanie Rodier
As it continues to encourage XBRL filing, the Securities and Exchange Commission (SEC) has announced that NYSE Euronext has become the first stock exchange to submit financial reporting information using interactive data.
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SEC Fights Senior Citizen Fraud, Chairman Cox Speaks of Personal Experience
September 10, 2007 @ 05:20 PM | By Melanie Rodier
The number of baby boomers reaching retirement is on the rise; so is the number of senior citizens being swindled.
Now, the SEC has approved a ruling by the Financial Industry Regulatory Authority (formerly NASD) to ensure that securities firms use appropriate sales practices when dealing with people nearing retirement.
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Former Morgan Stanley Finance VP and Husband Plead Guilty to Insider Trading
September 07, 2007 @ 11:28 AM | By Melanie Rodier
A former Morgan Stanley finance vice president and her husband, an ex-hedge fund analyst at ING Investment Management, have pleaded guilty to conspiracy and insider trading.
The couple, Jennifer Wang, 31, and Ruben Chen, 34, of Englishtown, N.J., face from 30 months to 37 months in prison and fines of as much as $5 million.
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Regulators Fine AXA Advisors $1.2 Million for Fee-Based Account Violations
September 06, 2007 @ 01:54 PM | By Melanie Rodier
The Financial Industry Regulatory Authority (formerly NASD) has fined AXA Advisors $1.2 million for failing to adequately supervise its fee-based brokerage business and distributing misleading sales literature.
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SEC Charges Boston Stock Exchange and ex pres Crofwell with Surveillance Failures
September 05, 2007 @ 03:40 PM | By Melanie Rodier
The Securities and Exchange Commission (SEC) has charged the Boston Stock Exchange (BSE) and its former president James B. Crofwell for failing to enforce Exchange rules to prevent specialists from trading for their own accounts ahead of marketable customer orders.
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NYSE Heads out to China
September 05, 2007 @ 02:44 PM | By Melanie Rodier
The China Securities Regulatory Commission (CSRC) has approved NYSE Euronext, the operator of the New York Stock Exchange, to become the first foreign stock exchange to open a representative office in China.
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SEC Appoints Lineberry, Plotkin Pleads Guilty to Insider Trading
August 28, 2007 @ 08:22 PM | By Cory Levine
The SEC's Office of Market Surveillance, which enforces regulation on U.S. markets, appointed a new head in Mark Lineberry. He steps in for Joe Cella, who resigned earliers this year, according to reports.
Lineberry comes into the position during a flurry of activity surrounding insider trading. The SEC has of late stepped up its efforts to detect market timing abuses and shine the spotlight on criminal misuse of insider information.
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Top CEOs Believe Globalization is Vital and Regulation Must Be Changed, NYSE Survey reveals
August 22, 2007 @ 05:18 PM | By Melanie Rodier
U.S. capital markets would stand to gain from government legal and regulatory changes, according to a new NYSE survey of 240 chief executive officers of the world’'s top businesses.
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John Schmidlin Resurfaces at NYSE Regulation
August 06, 2007 @ 08:20 PM | By Cory Levine
Here's quick bit of appointment news from last week. Former JP Morgan Chase CIO, John Schmidlin has joined the board of directors for NYSE Regulation, the regulator announced.
Schmidlin spent 35 years at JPMC, working his way up from management trainee to stepping down from the CIO position in 2004. Prior positions at JPMC included head of enterprise technology services, and head of global technology and operations. He was among the architects of JP Morgan's $5 billion outsourcing relationship with IBM that took shape in 2003.
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Reg NMS and MiFID: Preparing for the Data Flood
August 01, 2007 @ 05:04 PM | By Melanie Rodier
The introduction of Reg NMS and MiFID could cause a 900% surge in the amount of market data being published by 2012, according to a new study from TowerGroup .
So, what will this market data explosion mean for technology at trading venues?
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Reg NMS and MiFid... Together Forever?
July 19, 2007 @ 03:46 PM | By Melanie Rodier
Is there a possibility that MiFid and Reg NMS could one day be accepted by regulators on both sides of the Atlantic as being equivalent?
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SEC Adopts Anti-Fraud Rule for Hedge Funds
July 12, 2007 @ 03:18 PM | By Melanie Rodier
The Securities and Exchange Commission (SEC) has adopted an anti-fraud rule that makes it easier for the regulatory body to sue money managers who mislead or defraud investors, including those in hedge funds.
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Wall Street Sets Guidelines on Electronic Communications
June 27, 2007 @ 12:15 PM | By Melanie Rodier
As Wall Street workers continue to furiously use their BlackBerrys, email, text messages and instant messaging to communicate, regulators have become increasingly concerned about the potential spread of confidential information through unsecure devices.
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New Survey Says Corporate Financial Misconduct Is Still Prevalent
June 15, 2007 @ 02:39 PM | By Melanie Rodier
Over 50% of certified fraud examiners say they have personally observed financial misconduct in the past year, according to a new survey on corporate fraud.
Around three-quarters of participants also said they felt institutional fraud was more prevalent today than in 2002, when the Sarbanes-Oxley (SOX) Act was passed in response to accounting scandals at companies such as Enron and WorldCom.
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Fiber Optic Network to Connect NYC and Pennsylvania
June 08, 2007 @ 04:53 PM | By Melanie Rodier
Wall Street firms are one step closer to getting a fiber optic network connecting lower Manhattan with northeastern Pennsylvania as part of a total back-up solution in the event of a disaster.
Level 3 Communications, a global provider of telecommunications solutions, has been selected as the company that will build the fiber optic network, following an agreement between the governor of Pennsylvania, Edward G. Rendell, and Wall Street West.
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SEC Makes Sarbanes-Oxley Compliance A Little Easier
May 24, 2007 @ 03:51 PM | By Melanie Rodier
In a move that will put a smile on the faces of large and small financial services firms, the U.S. Securities and Exchange Commission (SEC), has approved guidelines that will make it easier – and less costly - to comply with the Sarbanes-Oxley Act.
Meanwhile, the PCAOB body that oversees auditors, has voted on changes to audit rules too.
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SIFMA Chief Lackritz Testifies Before Senate
May 21, 2007 @ 09:02 PM | By Cory Levine
Marc Lackritz, CEO of the Securities Industry and Financial Markets Association, and the voice of the U.S. broker-dealer community, testified last week in front of the Senate Committee on Banking, Housing and Urban Affairs Subcommittee on Securities, Insurance and Investments. In his testimony, Lackritz reaffirmed SIFMA's support of a single-regulatory force and the adoption of a principle-s based regulatory approach. Being one of the most influential lobby groups on Capitol Hill, SIFMA has considerable sway in regulatory matters, and their staunch support of regulatory reform may yield meaningful change in the way securities firms are governed.
Read the full testimony here (PDF).
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Sarbanes-Oxley Costs Take a Nose Dive
May 16, 2007 @ 05:01 PM | By Melanie Rodier
Costs to comply with the Sarbanes-Oxley governance law dropped last year for the third year in a row, largely because managers have been spending less time on reviews.
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SEC Imposter Alert
May 10, 2007 @ 04:53 PM | By Melanie Rodier
Not only do companies have to worry about stolen laptops, rogue employees and hackers -- now they also have to worry about fake SEC examiners.
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SEC Regs Too Much? Try Trading in 103 Foreign Countries
May 10, 2007 @ 11:10 AM | By Melanie Rodier
With full implementation of Reg NMS just around the corner and MIFID looming in Europe, broker dealers on both sides of the Atlantic are busy navigating new regulations. But what are the regulatory implications for a broker dealer who executes deals with countries around the world?
New York-based securities firm Auerbach Grayson provides trade and post-execution services in 103 countries, representing more than 250 equity and equity derivatives exchanges across the world's developed, emerging and frontier industries, from France to Uganda and North Korea to Bangladesh.
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Wall St. Still Unprepared for Pandemic, SEC Mulls Action
May 07, 2007 @ 09:00 PM | By Cory Levine
The United States Government Accountability Office released a report (PDF) on its latest year-long study on the resiliency of U.S. financial markets last week, and the results were mixed. After examining seven critical exchanges, clearing organizations, and payment processors, the GAO determined that the financial industry's progress in ensuring resiliency in the face of disaster was promising, but there is still much work to be done. The report's discussion of communications between the GAO and SEC were intriguing, indicating that disaster preparedness in the U.S. may evolve from being a matter of common sense to being a matter of regulatory compliance.
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Cuomo Wins Big on Data Privacy
May 01, 2007 @ 09:02 PM | By Cory Levine
New York's Attorney General Andrew Cuomo last week obtained the first settlement in court under the state's data breach notification legislation. While the punishment of the exposed company, Chicago-based claims management firm CS Stars, LLC, was relatively light, the development opens up new legal vulnerabilities for firms that do not follow proper procedure in the event of sensitive customer data exposure.
The leak potentially affected 540,000 New York consumers, according to Cuomo's office. New York law requires immediate notification in the event of a security breach involving customer data. CS Stars, complying with FBI instructions, did not announce the breach until 2 weeks after discovery.
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Keep An Eye On Your Outsourcers
May 01, 2007 @ 04:21 PM | By Penny Crosman
One message that rang out loud and clear from some of the compliance discussions today at the SIFMA show was: broker-dealers take outsourcing lightly at their peril. Broker-dealers retain regulatory responsibility for the functions they outsource. One of the regulators scrutinizing securities' firms outsourcing relationships is the NYSE. "There's been controversy over the rule we proposed [NYSE Rule 340]," said Grace Vogel, executive vice president, member firm regulation at NYSE Regulation. "We don't object to outsourcing. Where we see problems is when something goes wrong and a firm says, 'We're not responsible' and points to the outsourcer and says, 'go regulate them.' The outsourcer is outside of our jurisdiction. Firms should outsource functions, not responsibilities."
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SEC Aims to Make AML Compliance Easier
April 16, 2007 @ 07:19 PM | By Cory Levine
The SEC's Office of Compliance Inspections and Examinations (OCIE) today announced the availability of a new online resource for anti-money laundering (AML) information. The "AML Source Tool" compiles and organizes all of the major rules and regulations surrounding AML.
"We're hoping that this AML Source Tool will assist broker-dealers with their AML compliance efforts," said Lori Richards, director of OCIE, in a release. "It puts all AML requirements in one easy-to-reference location. While we initially developed the Source Tool for our own SEC examiners, we think it also will be an invaluable reference tool for broker-dealers and their internal AML compliance staff."
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22c-2 Compliance Date Nears
April 05, 2007 @ 07:44 PM | By Cory Levine
The April 16 compliance date for SEC Rule 22c-2 is fast approaching, and in less than two weeks, mutual funds and their intermediaries will have to have fleshed out their information-sharing agreements. Last year, funds and intermediaries alike reported their struggle to develop these agreements, which should now be nearly complete.
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Schapiro: Regulatory Sea Change on the Horizon
April 02, 2007 @ 07:53 PM | By Cory Levine
The very foundation of market regulation in the U.S. is under question, and could soon follow the model of European regulators, indicated NASD CEO Mary Schapiro at an industry conference last week. It seems as though rule-based lawmaking is slowly going the way of the buffalo and a principles-based approach, such as that utilized by the U.K.'s Financial Services Authority, is increasingly becoming en vogue.
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NASD Gives BrokerCheck a Face Lift
March 19, 2007 @ 10:57 PM | By Cory Levine
NASD announced today that it has updated and redesigned its BrokerCheck service -- a public, online service for reporting on the background of NASD member-firms. The update, says the regulator, should provide much-needed improvement in the usability and effectiveness of the service. Speaking from experience, the previous version of the BrokerCheck system, while loaded with potential was severely undermined by its own inefficiencies.
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Barney Frank: Banks’ Best Friend on Capitol Hill?
March 19, 2007 @ 04:49 PM | By Greg MacSweeney
If Barney Frank’s recently reported statements are accurate, banks and financial institutions may have a surprisingly friendly advocate on Capitol Hill. Frank, who also happens to be the influential chairman of the House Financial Services Committee, contends that banks should be exempted from SOX 404 compliance because they are already subject to similar provisions in an earlier law.
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Cox on SOX: No Need for Amendment
March 19, 2007 @ 10:21 AM | By Cory Levine
SEC Chairman Christopher Cox didn't mince words last week when addressing criticisms of the Sarbanes-Oxley (SOX) albatross. After this week's Chamber of Commerce suggestion that SOX be reeled in, Cox was definitive in his speech that alterations to the Act were unnecessary.
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E-Discovery: 100 Days and Counting
March 15, 2007 @ 03:12 PM | By Greg MacSweeney
This past weekend, we passed a milestone -- 100 days since the enacting of the new Federal Rules of Civil Procedure as they relate to eDiscovery. In summary, those Rules attempt to give courts guidance for how to treat digital data and information, in whatever form and context it is in.
The Rules try to contain the ever escalating costs that plaintiffs and defendants. So spreadsheets, letters, contracts, e-mails and all of those files that are stored on disk and on tape, on and off the network can, should, and must be “discoverable” to all of the parties engaged in litigation.
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Getting the Daylight Savings Monkey Off Your Back
February 27, 2007 @ 09:26 PM | By Cory Levine
On the list of forthcoming projects for CIOs is updating their systems to handle the changes in daylight savings time (DST) (DST). The Energy Policy Act of 2005 will cause DST to fall weeks earlier this year than in years past. With that in mind, industry analyst TowerGroup has issued recommendations on how financial institutions can deal with what they are calling "more a nuisance than the cause of any significant business outage."
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The Money's in MiFID
February 21, 2007 @ 03:38 PM | By Cory Levine
U.K. recruitment firm Joslin Rowe released a notice this week of what it is calling a "recruitment timebomb" for MiFID consultants. With just nine months to go before EU financial institutions are expected to be compliant with the Markets in Financial Instruments Directive, demand is soaring for experts who can help firms reach compliance.
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UNX Provides Access to Liquidity Sweeping Tools Via Instant Messaging
February 15, 2007 @ 09:28 AM | By Ivy Schmerken
Buy-side traders that feel comfortable using instant messaging to communicate with and route order flow to the sell-side community can now use IM to sweep crossing networks and dark pools.
The cool technology comes as the result of a partnership between Pivot Solutions, the developer of IMTRADER and UNX, an agency brokerage specializing in direct-market access and algorithmic technology.
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LSE Begins MiFID Consultation
February 14, 2007 @ 03:55 PM | By Cory Levine
The London Stock Exchange (LSE) announced that it has begun consultation with member firms on the services it will offer to keep members in compliance with MiFID.
The exchange has built its services on the TradeElect platform, which will utilize preexisting connectivity and infrastructure to offer a familiar market model under MiFID. LSE will extend its market-maker quoting facilities across EU securities to meet pre-trade transparency requirements. Meanwhile, in order to meet post-trade transparency requirements, the exchange will enhance its existing trade reporting services.
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Deutsche Bank Securities in the Dog House
February 13, 2007 @ 03:03 PM | By Cory Levine
We missed out on this little tidbit late last week. Deutsche Bank Securities, Inc. (DBSI) was fined $1.275 million by NYSE Regulation in two separate actions involving conflicts of interest in its published research, and an employee who accessed privileged information from a former employer.
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Morgan Stanley and the Great $10 Bil. Trade Debacle
February 07, 2007 @ 05:18 PM | By Cory Levine
NYSE Regulation fined Morgan Stanley $300,000 for a failure to provide sufficient inhibitors and blocks within its trading system that led to a massive botched trade.
According to the regulator, on the morning of September 1, 2004 a Morgan Stanley trader received instructions from a customer to unwind a portion of an existing swap, with an affiliate of the firm acting as the counterparty. To hedge its position, the affiliate took a short position in the shares of common stock underlying the basket. The mistake came about when the trader entered an order to buy 100,000 units of the basket to cover a portion of the affiliate's short position, not realizing that the tool used to create the basket had a built in multiplier of 1,000. The result was a basket with a value of $10.8 billion instead of $10.8 million.
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NASD Dings Bank of America for $3 Million
January 30, 2007 @ 09:44 PM | By Cory Levine
Banc of America Investment Services (BAI), a division of Bank of America, consented, without admitting or denying guilt, to $3 million in fines from NASD for failure to gather sufficient information about customers on certain high-risk accounts, an activity required by anti-money laundering regulation.
The failures, according to NASD, occurred with 34 accounts of trust and private investment corporations in the Isle of Man, which belonged to billionaires Sam and Charles Wyly, according to the Wall Street Journal (subscription required).
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Day 3: A good climate for global regulation?
January 25, 2007 @ 11:27 AM | By Greg MacSweeney
Delegates are calling for global regulation that directly addresses climate change at the World Economic Forum in Davos. But can business, government and scientists agree on a solution that could actually have some impact on a global scale?
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Microsoft Takes Aim at MiFID
January 24, 2007 @ 05:04 PM | By Cory Levine
Microsoft is positioning itself as a MiFID solutions provider, with an announcement today of an eight-solution technology grab bag intended to meet the requirements of the European uber-regulation. The software giant is parading out its partners as "mix and match" MiFID solutions that all focus on the MS architecture commonly used in the financial services industry (and, let's be honest — the world) including Office 2007, SQL Server, SharePoint and Windows. Notably, Windows 2003 is the operating system noted in the release, most likely because all of the partners' technologies aren't yet optimized for Vista.
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Day 2 at Davos: Setting the Security Standard
January 24, 2007 @ 03:20 PM | By Greg MacSweeney
Not surprisingly, information and data security is one of the hotter topics in Davos among the attendees at the World Economic Forum. Logically, if there are regulators for the Internet, telecommunications and accounting, why don’t we have a standards in place for information and data security?
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Cinnober Rocks the BOAT
January 22, 2007 @ 02:59 PM | By Cory Levine
Industry consortium BOAT selected trading technology provider Cinnober Financial Technology as the underpinnings of its market data platform. The consortium of global investment banks also announced that Markit Group Ltd. will partner with BOAT to manage business operations.
BOAT was launched in September 2006 to provide a reporting facility for pre- and post-trade data that will be distributed to banks in order to help meet the requirements of EU regulation MiFID. The database of trade data will be accessible by both the buy side and sell side.
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SIFMA Challenges Exchanges' Market Data Fees
January 19, 2007 @ 11:22 AM | By Cory Levine
SIFMA today sent over a note saying that they are urging the SEC to hold a moratorium on market data rule filings for U.S. exchanges and conduct further investigation into the conflict of interest issues that are created by for-profit exchanges.
U.S. exchanges are becoming commercial entities as a result of the electronification of the markets caused by Reg NMS, and subsequently several exchanges are planning on charging fees for distributing market data that was previously free. SIFMA points to a recent SEC filing by NYSE that proposes fees for redistributed depth of book market data that broker-dealers are legally required to provide the exchange. For more information on fee structures, see our Reg NMS-Compliant Exchange Trading Systems Directory.
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FinCEN Proposes More Transactional Information Sharing
January 17, 2007 @ 03:51 PM | By Cory Levine
The Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury, released its paper today on the value of reporting on cross-border transfer of funds in fighting money laundering and terrorist sponsorship. According the document, such reporting would hold value, but would require that FinCEN implement a data warehouse architecture to manage the information submitted under any mandated reporting requirement.
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NYSE Fines Seven Specialists
January 17, 2007 @ 12:39 PM | By Cory Levine
NYSE Regulation yesterday announced censures and fines for seven member specialist firms, to the tune $2.8 million total. The fines are the result of multiple trading violations that occurred between 2003 and 2006.
The firms were fined for breaking the firm quote rule, under which NYSE specialists are required to execute orders presented to them at prices that are at least as favorable as the NYSE's published bid or offer. The specialists firms also failed to honor commitments to buy or sell coming from the Intermarket Trading System. Other violations included failure to maintain written supervisory procedures, failure to display eligible limit orders and improperly executed short sales.
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NYSE Behind the Ball
January 09, 2007 @ 04:09 PM | By Cory Levine
Cory Levine, Wall Street & Technology
The New York Stock Exchange yesterday filed a letter with the SEC requesting an extension to the deadline of the Reg NMS trading phase. The current target date is February 5, and the Exchange is looking for an extra four weeks to roll out Phase IV of its Hybrid Market.
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Orchestria Signs on 100 Bloomberg Clients
January 04, 2007 @ 11:08 AM | By Cory Levine
Cory Levine, Wall Street & Technology
Electronic communication compliance vendor Orchestria announced that it has reached the 100-user mark for financial institutions signing on for the company’s integrated Bloomberg Professional messaging compliance solution. The two companies first partnered on October 2004. While 100 institutional users is a nice feather in Orchestria’s, cap, I’m left wondering just what exactly the rest of the many thousands of Bloomberg Professional users are doing to ensure compliance over their messaging.
Orchestria’s solution is hosted in the Bloomberg data centers and monitors messages in real time. This enables firms to proactively approach the application of regulatory guidelines and company-specific policy to messages, and prevent non-compliant messages from being sent.
Does Bloomberg support other messaging compliance vendors, and does it go so far as to host Orchestria’s competition on its servers as well? I will update as soon as Bloomberg returns my call.
Comments(1)A Word for the Authentication Stragglers
December 13, 2006 @ 03:11 PM | By Cory Levine
Cory Levine, Wall Street & Technology
In just a few short weeks, stronger user authentication should be in place for the online financial services industry, or so the Federal Financial Institutions Examination Council (FFIEC) is hoping. According to research from Aite Group, the retail brokerage community should be ready for the FFIEC's end-of-year deadline, but there's nothing like a little last-minute advice. Authentication solution provider Cogneto offers some things to think about before leaving for your holiday vacation.
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Vanguard Signs On for Knowledge Based Authentication
December 11, 2006 @ 02:10 PM | By Cory Levine
Mutual fund giant Vanguard has implemented the Knowledge Based Authentication (KBA) platform from Verid to reduce fraud risk. The firm will use KBA as part of the account opening process in the online and phone channels with certain types of accounts.
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U.K. Law Enforcement Impotent to Fraud
December 05, 2006 @ 04:48 PM | By Cory Levine
Cory Levine, Wall Street & Technology
A report from U.K. newspaper The Guardian reveals that financial institutions in the country are purposefully choosing not to report instances of online fraud and financial crime because they don't want to risk public exposure by law enforcement bodies that can do little or nothing about the crime — this from the mouth of a Metropolitan Police Detective Russell Day!
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Mid-Sized Firms Cheated in NYSE/NASD Merger?
November 30, 2006 @ 10:30 AM | By Cory Levine
By Cory Levine, Wall Street & Technology
In a widely anticipated move, the NASD and NYSE Group this week announced their plans to merge regulatory arms into a single self-regulatory organization. The merger appears to be an effective play toward regulators’ aim to increase the efficiency and consistency of industry oversight, while reducing regulatory costs. However, there’s at least one constituency that can’t be thrilled about details of the announcement.
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FSA: U.K. Will Be OK in Flu Pandemic
November 28, 2006 @ 10:37 AM | By Cory Levine
Cory Levine, Wall Street & Technology
While I was eating leftover turkey last week, London's Financial Services Authority (FSA) completed a resiliency test of its financial markets and found that in the event of a bird flu pandemic, the backbone of the U.K. economy would be able to continue operating.
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Bharosa Announces Sterling Win
November 15, 2006 @ 04:51 PM | By Cory Levine
Fraud detection and multifactor authentication vendor Bharosa announced that Lancaster, Pa.-based Sterling Financial Corp. has signed on to use its solutions. Sterling chose the solutions to meet the year-end deadline for FFIEC recommendations.
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The Big Board’s Big Dog Nods at Regulatory Consolidation, SIFMA Appoints Co-Chiefs
November 10, 2006 @ 12:03 PM | By Cory Levine
Cory Levine, Wall Street & Technology
In a speech at the Securities Industry and Financial Markets Association (SIFMA) launch event in Boca Raton, Fla, yesterday, NYSE Group CEO John Thain hinted at the future convergence of industry regulators. According to a Forbes.com report, Thane indicated that the current regulatory environment is less than ideal, and that overregulation of domestic markets is hindering their global competitiveness. “If we are not careful, we will in fact make the U.S. less attractive to the rest of the world,” he said.
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It’s a MiFID World, and Telekurs Is Just Living in It
November 08, 2006 @ 10:34 AM | By Cory Levine
Cory Levine, Wall Street & Technology
Telekurs Financial, the Zurich, Switzerland-based market data provider, has laid out its plans to update its reference and market data products for the post-MiFID world. Some of the data required by firms to apply client classifications and best execution policies is already available, some new data will be added, and Telekurs plans to build a new market data platform to support the directive.
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Hedge Funds Huddle Up
November 02, 2006 @ 09:46 AM | By Cory Levine
Cory Levine, Wall Street & Technology
The alternative investment industry is getting ahead of the regulatory curve by forming an association focused on addressing legislative compliance and regulatory developments — the Alternative Investments Compliance Association (AICA). The effort has been organized by service provider HedgeOp Compliance and was founded by representatives from more than 10 alternative investment firms with a combined $12 billion in assets under management.
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What if I Have Laryngitis?
October 25, 2006 @ 03:08 PM | By Cory Levine
Cory Levine, Wall Street & Technology
RSA, the security company acquired earlier this year by mega-