Displaying items by tag: SEC

The Biden Admin hasn’t been shy about wanting to tighten the regulatory belt on Wallstreet and the financial world, and another step is being taken. The SEC is considering changing the disclosure rules when it comes to acquisitions of public companies by hedge funds. Currently, HFs have a 10-day buying period to which the public doesn’t have to be made aware of a purchase. Chairman Gensler is making it clear they are eying tighter rules when it comes to disclosure. The current rules are over 50 years old and were meant to bring more information symmetry between the public and private investors. The SEC is looking to increase transparency and give the public more time to adjust.

FINSUM: This will definitely give the public an advantage, but we’ll see how the SEC votes when push comes to shove.

Former President Donald Trump wasn’t quiet about his opposition to traditional media outlets and big tech, and in an attempt to solidify that stance he tried to form his own SPAC. However, Biden’s regulatory watchdog and SEC chairman Gary Gensler may be cracking down on the newly forming SPAC. Trump’s SPAC is being backed by some Chinese investors who are drawing the regulator’s eyes. Additionally, Gensler has made it known his opposition to SPAC’s as a financial vehicle regardless. The SEC will be doing more research into Trump’s SPAC and it will face an uphill battle to get approval.

FINSUM: In a wider setting SPACs are still an interesting alternative, but Trump’s history and investors make this particular SPAC riskier.

Brokers better look out, the SEC has started the new year with a bang. The Commission has mostly been quiet about its potential Reg BI changes since the rule went into effect about 18 months ago. However, a big new warning has come out from Quinn Emanuel’s SEC enforcement practice. There are “strong indications” of much more robust enforcement coming. According to Kurt Wolfe of the SEC Enforcement Practice, “SEC Chair Gary Gensler is under pressure from broad constituencies to show results in the space. For example, at a recent hearing of the Financial Services Committee of the House of Representatives, Rep. Carolyn Maloney (D-N.Y.) encouraged Chair Gensler to ‘take further action to strengthen this rulemaking,”. Further, “the SEC has signaled that regulated firms may not be getting Reg BI right, and senior SEC officials have made it clear that they intend to take an expansive, perhaps aggressive, approach to Reg BI.”

FINSUM: Since Biden took office it has really only been a matter of time until enforcement scaled up. It is now clear that it is coming.

Biden was expected to come into the presidency with a tough regulation on Wallstreet. However, the snail’s pace with which Biden replaced key financial regulatory figures, hindered the quick change many expected, but now many officials are in place and change is coming. One of the biggest areas of the crackdown will be on stable coins and other digital currency as the federal government views them as systematically risky. Additionally the Biden admin will begin constricting new fintech lenders, who many in the admin see as pseudo-banks without any of the stringent regulation that affects the real banking industry. This is all part of larger changes that will take a more restrictive stance on Wallstreet undoing a lot of friendlier policies from the Trump administration and will include other central topics like climate change.

FINSUM: With many regulators now in place real change could be coming to the street, the tech-related products which are viewed as unregulated to this new administration.

The 2019 Secure Act paved the way for types of assets to be added into 401(k) plans by limiting the legal liability of partners. Since then it’s been a series of new companies announcing the addition of annuities to retirement plans. However, this is a huge chunk of money in the form of a deferred income that advisors won’t necessarily be managing. A growing number of advisory firms are concerned as large amounts of traditional investment being managed by advisors will now be tied up in annuity contracts. A peek behind who the major lobbyist for 2019 secure reveals its mainly insurance companies limiting their liability and existing retirement vehicle supporters like Fidelity. Finally, this could be bad for clients as many institutional investors can get better deals on annuity prices for their clients.

FINSUM: While the care act will undoubtedly affect annuity demand, it could adversely affect advisors in their client’s retirement future.