Displaying items by tag: SEC

Monday, 29 January 2018 10:00

The SEC May Give a Huge Pass to All Companies

(New York)

Any stock investor, especially those who have been investing over the last twenty years, has noticed that there is a dearth publicly traded companies these days. Years of mergers and acquisitions, combined with a lack of IPOs, means there are many less publicly traded companies these days. Now, in what seems a strong move to change that, the SEC is considering making a new rule that would bar shareholders from suing companies, with all claims moving to arbitration instead. Doing so would eliminate one of the headaches of going public for companies, and would move the relationship between shareholders and companies to something more akin to clients and advisors, where arbitration is the norm.

FINSUM: This is an interesting move, but we do not think it is enough to push companies over the edge to IPO. It might also prove poor from a corporate governance perspective.

Published in Eq: Total Market
Wednesday, 24 January 2018 11:32

SEC Cracking Down on Blockchain


The whole market seems to have become punch-drunk with blockchain fever. The recent cases of small companies seeing their share prices surge on the back of adding “blockchain” to their name has been well documented. Now the SEC is cracking down. Jay Clayton, chairman of the SEC had this to say on the issue, amidst an even larger statement shaming the rebranding practice: “The SEC is looking closely at the disclosures of public companies that shift their business models to capitalize on the perceived promise of distributed-ledger technology and whether the disclosures comply with the securities laws, particularly in the case of an offering.”

FINSUM: The final straw seemed to be when a publicly traded company that specializes in Long Island ice teas changed its name to Long Blockchain and saw its shares skyrocket.

Published in Eq: Tech
Friday, 19 January 2018 10:42

SEC Makes Huge Announcement


The SEC has just made an announcement that those in financial industry, and beyond, were waiting for. That announcement was that the SEC has now all but grounded all hopes of having bitcoin ETFs. There has been a remarkable amount of hype about the chances of launching bitcoin ETFs in the hope of getting more mainstream investors involved in the asset class. However, the SEC dashed those hopes, saying “Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products”.

FINSUM: This was effectively an unsolicited warning not to try to shirk investor protection rules in efforts to create bitcoin ETFs. It looks like the SEC is taking a hard line here.

Published in Eq: Tech
Tuesday, 16 January 2018 12:18

Why FAs Should Support a Strong Fiduciary Rule


On Wall Street has run what we consider to be a very bad article, but we thought our readers might enjoy, or cringe, in hearing about. In an article entitled “Why Financial Planners Should Support a Strong Fiduciary Rule”, the director of consumer protection for the Consumer Federation of America manages to make almost no discernible argument. Attacking those who oppose the fiduciary rule, the article fails to make any salient points in support of the current DOL version of the rule. In fact, the most interesting part of the article is actually an inadvertent support of those who oppose the DOL rule. The author acknowledges that commissions-based payments are no more inherently conflicted than fee-based accounts.

FINSUM: This article was incredibly mind-numbing. While we have been in consistent opposition to the DOL rule, we are not against fiduciary duty in principal, and have been trying to find arguments in its favor. In this piece we kept reading and reading waiting for a good point to be made, but it never arrived.

Published in Wealth Management
Wednesday, 10 January 2018 10:46

SEC to Issue New Fiduciary Rule in Second Quarter


If there was ever exciting news in the fiduciary rule saga, this is it. The Wall Street Journal is reporting that the SEC will deliver a proposed comprehensive fiduciary rule in the second quarter of this year. The challenge of delivering a rule governing all accounts will be very challenging however, even as the SEC says it is fast-tracking development, as it will be bombarded from both sides. One of the directors from the Consumer Federation of America puts it bluntly, “It’s difficult to see how they can come up with a solution that does not land them in court … If they propose a rule we like, industry will sue them. If they give industry a disclosure-based best interest standard that they want, we’ll sue them”.

FINSUM: The SEC is in a tough position, but them coming up with a proposal for a comprehensive rule would be a step in the right direction.

Published in Wealth Management
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