March 28, 2011 SIFMA submitted a lengthy comment letter to FINRA regarding its recent proposal in RN 11-08 to adopt new rules on markups, commissions, and fees. Primarily, SIFMA supports the withdrawal of the 5% policy, but questions how the new rule would apply absent any clear guiding principles from FINRA. In addition, SIFMA argues that (1) FINRA should further expand the "QIB Exemption" relating to debt markups, (2) FINRA should provide further guidance on debt markups, given the "continued uncertainty and implementation difficulties under current IM-2440-2," and (3) the proposed retail

FINRA RN 11-14 March 29, 2011 FINRA published a regulatory notice to request comment on proposed FINRA Rule 3190 to govern firms' obligations and supervisory responsibilities regarding outsourcing arrangements. The new rule would state that (1) when a firm outsources a function related to its business as a broker-dealer, it remains obliged to comply with applicable securities laws and SRO rules; and (2) firms may not delegate responsibilities for, or control over, any outsourced functions. In addition, the rule would require firms to have supervisory procedures and due diligence measures to

MFA Comment Letter RIN: 3038-AD15 and 3038-AD16 March 28, 2011 MFA submitted comments to the CFTC in response to its request for comments on position limits for derivatives. MFA remains concerned that the CFTC's proposal is not empirically driven and that it may place a greater burden on interstate commerce by hindering the ability of futures markets to perform their fundamental price discovery, risk transfer and risk management functions. MFA is especially concerned that the proposal will result in unnecessary aggregation of independently controlled accounts, burden investors and investment

International Monetary Fund March 26, 2011 Recent regulatory efforts, especially in the U.S. and Europe, are aimed at reducing moral hazard so that the next financial crisis is not bailed out by tax payers. This IMF paper looks at the possibility that central counterparties (CCPs) may be too-big-to-fail entities in the making. The present regulatory and reform efforts may not remove the systemic risk from OTC derivatives but rather shift them from banks to CCPs. Under the present regulatory overhaul, the OTC derivative market could become more fragmented. Furthermore, another taxpayer bailout

CFTC Dodd-Frank Rulemaking March 29, 2011 The Commodity Futures Trading Commission has cancelled its open meeting on Thirteenth Series of Proposed Rules under the Dodd-Frank Act scheduled for Wednesday, March 30, 2011. Cross References Dodd-Frank Act, Title VII