Week InReview | FSOC/Metlife ruling unsealed; government will appeal the district court's decision | IOSCO issues cyber-risk approaches & tools report | Labor Department releases final fiduciary rule for advisers | In Case You Missed It + Binge Reading
Friday, April 8, 2016
Let's recap
In case you missed it . . .




Judge unseals FSOC/Metlife ruling
Government to appeal
(Apr 7) According to a Treasury spokesperson, the government will appeal a Washington D.C. district court decision to rescind the Financial Stability Oversight Council's designation of MetLife as a systemic risk.  On Thursday, the federal judge who called the council's determination process "fatally flawed"  ordered the release of the full unsealed version of the March 30 ruling that said FSOC erred  in not analyzing the insurer's vulnerability to financial distress. Some opponents of financial reform "have hailed the court's decision as a win for our financial system," Treasury Secretary Jacob J. Lew said in a statement released by eMail. "This is wrong and dangerously ignores the lessons of the financial crisis," he said. "We intend to continue defending vigorously the process and the integrity of FSOC's work, and I am confident that we will prevail."
DOL's final fiduciary duty rules are out
Advisers must do what's best for their clients
(Apr 6) A firm or retirement adviser must commit to giving advice in client's best interest, charge "reasonable compensation" and avoid misleading fee / conflict-of-interest statements, the Department of Labor said.  Current requirements say investment advice only has to meet an investor's goals / risk tolerance in retirement accounts such as 401(k)s and IRAs vs client's best interest (see a comparison of the draft rule and final rule here). Changes / exemptions vs 2015 draft rule:
  • Final exemption "makes clear" contract doesn't have to be signed when customer walks in the door
  • Eliminates ERISA plans / participants / beneficiary contract requirement (firm must acknowledge fiduciary duty in writing)
  • New disclosure requirement for advisers recommending proposals to employers now for those with 401(k) assets of less than $50m vs $100m in earlier version
Read the DOL's Fact Sheet here, and their FAQ here.
IOSCO flexible on cyber-risk
"No one-size-fits-all approach"
(Apr 6)  Most governments are providing high-level flexible regulatory frameworks that in many cases put the responsibility for creating specific cyber-protection policies on regulated market participants, the International Organization of Securities Commissions said in a report. Leading cyber-risk practices include having proper governance structures, system controls, threat detection systems and response and recovery plans in case of an attack, and identifying critical assets, the international securities standards-setting body said. The flexible arrangements allow cyber-protection systems to be tailored to the user's individual needs. Regulators recognize that "there is no one-size-fits-all approach that market participants should adopt," IOSCO said, and that regulators who institute a cyber-protection framework or seek to improve one could consider adopting the practices detailed in the report.
Binge reading disorder
Hand-curated, chosen with love
'There are going to be lots of dead unicorns':  Many fund managers have been forced to write down their investments in billion-dollar start-ups
- Financial Times (subscription required)

Rupert Murdoch's ex-wife Wendi Deng is dating Vladimir Putin

The secret money behind 'The Wolf of Wall Street'

A gay, Latino partner tests Goldman's button-down culture

The five most important charts from the Panama Papers leaks
- Quartz
Transparency.
Inclusiveness.
Consensus.