Week inBrief

Quote of the Week
"While the SEC was carrying out its approval process of IEX over the past several months, Ernst and Young has been running an advertising campaign with the slogan 'How human is your algorithm?' 

We can answer in the words of the German philosopher Nietzsche: 'Human, all too human'. 

While high-frequency traders strive to develop algorithms that appear scientific and rational, purged of human emotion, the daily work of high-frequency traders has more in common with Nietzsche's dictum than with a computer program. HFT is also High- Feelings Trading."

Socializing Finance:
Friday, September 16, 2016
Let's recap
In case you missed it . . .
There's a $300 Billion Exodus From Money Markets Ahead Final wave of cash set to move from prime, muni funds; shift seen before Oct. 14 compliance date for floating NAVs (Sep 13)

Blockchains May Raise Red Flags for Bank Regulators: Distributed-ledger technology fundamentally alters relationship among parties in a transaction; technology could generate regulatory concerns about know-your customer and anti-money-laundering requirements (Sep 12)

High Frequency Traders Elbow Their Way Into the Currency Markets After scandal comes reluctant embrace of high-speed firms; volume from nonbanks triples in 3 years to $199 billion a day (Sep 8)

Bubble Bursting in Less Than a Week for Payment-in-Kind Bonds Bonds that allow issuers to defer interest payments are nosediving less than a week after they were sold amid a sell-off of fixed-income assets (Sep 12)

World's Most Elite Bond-Trading Club Isn't What It Used to Be Regulation, evolving technology dim lure of once-coveted spot (Sep 12)
'Flash boys' rule easier said than done
SEC chair tackles disruptive trading strategies
(Sep 14) Issuing a rule to stop disruptive high-speed trading strategies has been "difficult," SEC Chair Mary Jo White said in prepared remarks to an industry conference in Washington. "One of the most difficult tasks in developing the right regulatory response to such potentially disruptive trading strategies is the need to avoid undue interference with practices that benefit investors and market efficiency." White said her  agency's next step is to seek public comment on research it has done on the matter.
CAT, dark pools, trading rule
Next up on SEC's list
(Sep 14) Finishing the consolidated audit trail is the top market-structure focus of the Securities and Exchange Commission for the rest of 2016, Chairman Mary Jo White said at an industry conference in Washington. The CAT is designed to be a vast central data repository for equity orders, provided by brokers and exchanges. It was formulated by the Financial Industry Regulatory Authority (FINRA) and national securities exchanges and released by the SEC in April. The agency also plans action in the coming months on new disclosures for dark pool operators, a pilot program for lowering access fees and rebates on exchanges, and an anti-disruptive trading rule.
Trust banks, fintech firms
OCC proposes method to wind them down
(Sep 13) The Office of the Comptroller of the Currency intends to finish a blueprint no later than mid-December outlining how it will deal with marketplace lenders and other financial technology innovators that are transforming banking and financial services, Comptroller Thomas Curry said at an industry conference in Washington.
  • OCC's proposal would establish how receivership would work for national banks not insured by FDIC
  • Trust banks at Citigroup Inc.Goldman Sachs Group Inc., Deutsche Bank AG, State Street Corp. and others would be affected
  • OCC will consider special-purpose charters for financial technology companies, which would likely be included in proposed receivership approach
Binge reading disorder
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