The SRO structure was developed at a time when the various exchanges were nonprofit membership organizations controlled by their member broker-dealers. Accordingly, the actions of an exchange/SRO reflected the decisions of its member broker-dealers. More recently, the exchanges have become global private corporations that, to a considerable extent, either are in competition with broker-dealers or have an interest in maximizing the fees they charge to broker-dealers. Nothing is inherently…

No market participant should be comforted by the CFTC's implicit promise that it will turn funding allocations into enforcement revenues. This becomes particularly apparent when the CFTC stretches the limits of credibility on the enforcement side (when it asserts, for example, that the Flash Crash was caused by a single spoofer).

Additionally, the CFTC's promise that it will use its funding to decrease "regulatory uncertainty" is hollow. Does it really cost that much to write…

One of the reasons that the financial services industry is under pressure is because the government attacks its reputation constantly, and not always for good reasons. (To be fair, Mr. Stiroh noted both actual misconduct and a perception of a lack of trust.) With that in mind, consider the following observations: (i) most persons (including the government) tend to be less critical of themselves than of others, (ii) misconduct by government…

As Representative Garrett points out, the court's rejection of the SIFI designation of MetLife carries significance for not only the insurance industry, but also the asset management industry, since FSOC effectively has indicated its inclination to name asset managers as systemically significant.

The notion that asset managers are systemically significant seems questionable because they are not themselves large institutions measured by equity, but instead are only large insofar as…