President Dudley challenges us to consider why there is a "widespread sense" that the principle of "reciprocity" (defined as "the expectation of a quid pro quo in the relationship between society and the financial services industry [and] the basis of public trust in financial institutions) has been compromised. It may have something to do with regulators portraying participants in the financial industry as joint members of an illicit enterprise. There are bad people in finance,…

The above article is a corrected version of a previous Cabinet summary of ICI's position on the FSOC Improvement Bill. In our prior summary, we stated correctly that ICI opposed the designation of funds as SIFIs, but were incorrect in our statement that ICI opposed the FSOC Improvement Bill.

For the CFTC to look at the quality of the data that it requires is certainly to the good. The reality is that the financial industry spent huge amounts of money complying with requirements to provide useless information to regulators. The financial regulators, and not only the CFTC, should (i) determine which information is useful among themselves, (ii) identify the most efficient way to obtain that information and (iii) agree not to impose any information requirements on the industry until…

The major "finding" of the report is that investors who trade frequently receive better dealers' prices than investors who trade infrequently. In short, dealers tend to favor better customers. This idea is neither wrong nor unexpected. What business doesn't favor its larger and more loyal customers?

The most interesting finding of the report is that smaller customers can receive better prices by trading with fewer dealers; i.e., smaller customers do better when they become the…