Partner
Norton Rose Fulbright US LLP
Steven Lofchie is a Partner based in New York. He advises financial institutions and corporate clients on the securities laws and the Commodity Exchange Act, with particular focus on the regulation of broker-dealers, swap dealers, investment funds and other market intermediaries. Steven's transactional practice focuses on securities credit and derivative transactions.
Recent Articles & Comments
Regulators tend to say nice things about the potential benefits of innovation. The follow up is a "but" where the regulator sets a standard that is either completely ambiguous or impossible. In the case of generative AI, the standard recommended is that humans must "be able to detect possible negative outcomes in deployed AI models or systems. . . ."
That sounds reasonable. The problem is that AI works in ways that people do not fully understand and cannot fully anticipate. In…
There is quite a bit here, but the following points stand out:
Mr. McKernan's criticism over the failure by regulators to make the case in support of key aspects of the Basel Endgame, and his concerns as to the damage that the requirements might do to the economy, are consistent with views expressed by many in the banking industry. His position to "end our bailout culture" and to "accept the inevitability of bank failures" is fundamental to the debate…Commissioner Uyeda has been a persistent critic of the SEC's rulemaking process under SEC Chair Gensler. (His views on process often align with those of Commissioner Hester M. Peirce.) Perhaps his most powerful statement on the subject was linked to the following news story: . But he has been consistent (see, e.g, ; ; ).
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The discussion of the margin models is in many ways similar to the debate over the uses of artificial intelligence for a number of purposes, including credit scoring. That is, the end product seems to be better, but we don't know exactly why we got that result. At least as to central clearing, this may present a practical difficulty for clearing members: How much liquidity do clearing members need to set aside to meet margin calls when the amount of the call is not readily predictable?
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