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Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited
Article Type: Editor column From: Journal of Investment Compliance, Volume 12, Issue 1
We begin this issue with an article by Edward Ferraro that analyzes recent litigation concerning the roles of competitive forces and cost analysis in determining “fair and reasonable” fees charged by self-regulatory organizations (SROs) for market data such as NYSE Arca, LLC’s depth-of-book product. Next Gabriella Opromolla discusses the way cash-settled equity derivatives can be used to acquire hidden ownership interests in the context of the Italian corporate ownership structure and legal system. She cites some of the negative consequences of hidden ownership and supports the Italian financial regulator’s recent proposal to extend disclosure obligations related to significant shareholdings to include positions held through cash-settled derivatives. Russell Sacks, Michael Blankenship, and Steven Blau explain the new FINRA Rule 5131 for IPO Allocation, which includes regulations on “quid pro quo” allocations, “spinning,” “flipping,” and IPO pricing and trading practices.
Then Beth Alter and Lauri Goodwin discuss issues a hedge fund manager should consider before executing an electronic trading agreement with a prime broker. In light of the Dodd-Frank Act and the massive required subsequent rule making, Roger Lorence describes new technical rules applicable to the returns for taxpayers who trade in commodities contracts. Dermot Turing, Marc Benzler, and Frédérick Lacroix point to some of the common themes running through the post-crisis set of reforms across the principal jurisdictions, draw some conclusions concerning their practical impact, and suggest some approaches for financial institutions to take in the near term.
Stephen Bier, Thomas Bogle, Jack Murphy, Kevin Babikian, and Sean Murphy discuss the report released by the President’s Working Group on Financial Markets on “Money market reform options” implemented in response to the large-scale redemptions of money market shares during the financial crisis in September 2008. The report recommends that more should be done to address systemic risks and structural vulnerabilities of money market funds to “runs” in addition to the recent amendments to the regulatory structure governing money market funds recently adopted by the SEC. Diane Ambler and Mark Greer explain recent SEC guidance for mutual fund directors concerning their responsibility to periodically review and spot potential conflicts of interest in the purchase of securities from affiliate syndicates, cross-trading, and the use of affiliated brokers.
Hardy Callcott and Timothy Foley explain the SEC’s new rules that govern broker-dealers’ provision of “direct market access” and “sponsored access” to their heavy-volume trading customers, including risk management controls and supervisory procedures and prohibition of the brokers’ former practice of providing customers with unfiltered or “naked” to an exchange or alternative trading system. Finally, Harry Weiss, Yoon-Young Lee, Bruce Newman, Paul Eckert and Claire Hanselmann explain the background and provide an overview of FINRA Rule 4530, which requires members to enhance their policies and procedures for reporting findings of internal and external conduct in violation of FINRA rules.
Henry A. DavisEditor