Displaying items by tag: regulation

Tuesday, 09 August 2022 02:43

Biden Tax Destroys Buy-Backs

Dems are including a 1% tax on share buybacks in Biden’s climate and tax bill which is being pitched as an inflation bill. The tax was included to get Arizona Senator Krysten Sinema on board with the legislation. Most analysts say this will raise tensions with Wallstreet as investors will be apprehensive about the impact immediately and what it opens the door to moving forward. Many companies have recently engaged in massive buybacks using the excess profits to reinvest in their own companies. Experts say this could generate a lot of revenue, more than the carried interest which is expected to bring in $14 billion.


Finsum: Buy back boogeyman at it again. This legislation stops companies from doing the most responsible thing they can with excess cash.

Published in Eq: Total Market
Saturday, 14 May 2022 06:43

SEC Eyes Major New Regulatory Move

Special purpose acquisition vehicles (Spacs) have been one of the go-to alternatives for high-income investors in the last year, but for Goldman Sachs that could be changing. The SEC is proposing reforms to Spacs in order to improve transparency and align with traditional investments. Goldman will pause their Spac offerings in response. GS was one of the largest underwriters for Spacs in 2021 and raised almost $16 billion. This isn’t expected to be an isolated event for GS, other Wall Street firms are expected to follow suit as regulation will make these less attractive ventures.


Finsum: Biden’s SEC has been a not-so-quiet regulator when it comes to alternatives where they are quickly expanding scope to come down on these sub-industries

Published in Wealth Management
Friday, 25 March 2022 19:55

Regulator Changes Driving Bond ETF Creation

A small but substantial change may be shaking the bond ETF infrastructure to its core. The New York State Department Financial services is allowing insurers to label bond ETFs as individual bonds rather than as equity risk. Companies have issued lots of new debt setting records as record low interest rates have made it appealing. This regulation could change the way the Fed and other regulators interact with bond markets, and could lead to the sort of efforts that saved the bond market in 2020. These will allow more bond products and increase inflows, but for insurers bond ETFs have more complications than a traditional single fixed income security and could provide difficulties in the future.


Finsum: Small changes to regulator practices like this can lead to massive swings in credit creation, keep an eye on bond ETFs.

Published in Bonds: Total Market

Most fixed income ETFs used to be linked to passive tracking products in the bond market, that is until more recently. Rules Adopted by the US SEC have steered many investors to active fixed income by making it easier to launch new active ETFs. Active funds are attractive for ETF producers because they draw higher fees (about .2 percent) than active funds. This has led to an explosion in active fixed income. Active bond fund creation is growing at nearly double the rate of the rest of the ETF market, and investors are ready as well as 2021 saw a record pace of inflows. One big factor in shifting more investors into active fixed income is aging global demographics which are still searching for yield and income.


Finsum: The world’s aging population is creating a safe asset shortage and pushing bond prices higher.

Published in Bonds: IG
Friday, 28 January 2022 14:20

Biden Labels Crypto a National Security Threat

The Biden Admin has been tip-toeing around crypto regulation since it came into office, but now those public statements are actually materializing in the form of regulation. A top town security memorandum is expected to come down the pipes in the next few weeks which will task separate government agencies to develop regulatory policies around crypto, NFTs, and stable coins. The State Department, Treasury Department, National Economic Council, Council of Economic advisors, and White House Security Council will all be on the job. While the Whitehouse will avoid regulatory suggestions they are putting the burden on these agencies to propose stricter rules.


FINSUM: Crypto regulation isn’t necessarily bad; it's just another closer step toward legitimizing digital currencies in the eyes of countries around the globe.

Published in Alternatives
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