Despite the high potential cost of electronic trading disasters, why have broker-dealers, exchanges, and the national market system suffered from a string of highly-public catastrophic failures and near misses, and why do the tools of regulatory examinations and enforcement actions fail to tame such errors? The attached analysis from independent research and consulting firm System Logic, submitted as part of Steven Lofchie's testimony to the House of Representatives Committee on Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, argues that complex systems

The IRS announced on March 4 that new withholding rules on equity-linked instruments under Section 871(m) of the Internal Revenue Code would be changed in final regulations so that such rules would only apply to equity-linked instruments issued on or after 90 days after the publication of final regulations. Under proposed regulations issued in December 2013, the IRS and Treasury proposed starting in 2016 to impose withholding tax of up to 30% on dividend equivalent payments made, or deemed made, to non-U.S. persons on "specified notional principal contracts" ( i.e., equity swaps) and specified

CFTC Commissioner Bart Chilton issued a statement criticizing the President's FY 2015 budget. Chilton stated that Dodd-Frank gave the CFTC a lot of new regulatory oversight, but did not and has not provided adequate funding. According to Chilton, the President's request of $280 million is $34 million less than the previous year's request and is "woefully insufficient for needed oversight and enforcement." He further stated that the CFTC has the mandate, but not the money, to properly oversee the futures and swap markets. Chilton went on to note that the FY 2015 level of funding would fund 100

The SEC announced that it is designating a longer period to take action regarding the FINRA amendments to Wash Sale Transactions and Rule 5210 ("Publication of Transactions and Quotations"). It is extending the period in which to consider the rule amendment until May 2, 2014. Lofchie Comment: Firms that are engaged in algorithmic trading activities that may be subject to the proposed rule should consider using the extended period to submit comments. See: Text of SEC Extension.

Michael Decker, Managing Director and Co-Head of Municipal Securities at SIFMA, issued a statement raising concerns over a municipal bond tax increase in the House Republican tax reform proposal. Mr. Decker stated that he is disappointed that the proposal includes both a new 10-percent tax on otherwise tax-exempt interest income and a prohibition of private-activity bonds and advance refunding bonds. Mr. Decker explained that the new tax increases would be "borne ultimately by states and localities in the form of higher capital costs," which could lead to higher state, local property and