Industry Watch

BNY Mellon Weekly Fixed Income Market Commentary - January 22, 2015
January 15, 2015 - Unknown Unknowns
The volatility that has marked trading during the first few weeks of the New Year continues unabated as the trends that have helped volatility re-emerge show no sign of abating. At this point, we will continue to be driven by the trinity of low oil prices, waning global growth and inflation/deflation concerns. The most obvious manifestation of these trends (at least to a fixed income guy) appears to be the utter capitulation of rates as the race to zero continues around the world. This brought the Treasury Bond to a YTD low of 2.37%, down almost 40 bps for the year, while Germany saw negative yields out to five years. The most recent JPM investor sentiment surveys since the start of the year also show some of the largest weekly changes to the net long position, despite rates falling to near, if not all time lows around the world. Presumably, the rates trade has been driven by falling inflation expectations, which have caused a plunge in term premia as the market has become increasingly convinced that global deflation is a bigger concern than rampant inflation. This sanguine view of price growth comes despite almost universal expectations for an aggressive QE announcement from the ECB, as soon as today (we will caveat that we are writing this before the announcement has been made, although press reports have recently coalesced around a EUR 50 billion/month QE for the next two years, totaling EUR 1.1 trillion). Stimulus also continues from Japan, although its latest moves did not expand into QQE3, while rate hike expectations in the US and UK continue to move towards later dates.
Economic Update, August 2014: Stronger Growth Despite Risks
August 08, 2014 - BNY Mellon Chief Economist Dick Hoey gives his opinions on the global economy and the U.S. economy at the mid-way point of 2014 and what growth rates and geopolitical risks mean to his outlook.
Investment Insights by Lockwood Advisors, Inc.
January 15, 2015 -

Fourth Quarter 2014
2014 ended as it began. The year got off to a frosty start courtesy of the polar vortex which put U.S. economic growth in a deep freeze. Furthermore, the year ended (and 2015 begins) with economic growth, monetary policies, and the impact of the swift, sharp decline in crude oil prices, all on divergent paths.

IRS Provides Transitional Relief Under FATCA
May 15, 2014 - The IRS has announced that 2014 and 2015 will be transition years for IRS enforcement and administration related to FATCA.
What You Need to Know About FATCA
April 10, 2014 - This article expands on some of the important changes that the Foreign Account Tax Compliance Act (FATCA) will bring.
BNY Mellon Global Markets, LLC Weekly Market Commentary - TEST
April 09, 2014 -
Important FATCA Deadline Approaching
March 27, 2014 - Implementation of the Foreign Account Tax Compliance Act (FATCA) is scheduled to begin on July 1, 2014.
IRS FATCA Registration Information
January 13, 2014 - Several updates have been made to the information available on the IRS website.
New SEC Financial Responsibility Rules
January 02, 2014 - The SEC recently amended its Financial Responsibility Rules governing net capital, customer protection, books and records, and broker-dealer reporting.

To learn more, review the SEC’s adopting releases 37-70072, 37-30073 and 34-70701.
BNY Mellon Chief Economist Richard Hoey Presents: Outlook 2014
November 07, 2013 - We continue to expect an acceleration in global economic growth in 2014. Global GDP growth should accelerate by one-half of one percent to three-quarters of one percent from the prior pace near 3% in both 2012 and 2013. The acceleration in global growth should be led by the developed world, in continued recovery from past economic weakness.
BNY Mellon Chief Economist Richard Hoey Presents: Economic Update, October 2013: No Default
October 31, 2013 - All economic forecasts today are subject to uncertainties about the U.S. government shutdown, debt ceiling worries and concerns about potential U.S. default. Our belief is that default will not occur, that the debt ceiling limits should be raised by October 17 and that the government shutdown should last only for the first two to three weeks of October. If so, damage to the U.S. economy is likely to be limited and largely temporary. However, a longer period of uncertainty could have more negative effects on the economy and the markets. The debt ceiling concerns this October have arisen just prior to the key decision-making period for consumers on holiday spending and for corporations on finalizing next year's investment plans. We expect at least a short-term resolution before that key period. However, a longer period of debt ceiling uncertainties could prove problematic.
Proposed Foreign Financial Institution Guidance Released
October 29, 2013 - The U.S. Treasury and the IRS released proposed guidance for Foreign Financial Institutions (FFIs) under the Foreign Account Tax Compliance Act (FATCA).
BNY Mellon Chief Economist Richard Hoey Presents: September Commentary, Interest Rate Normalization
September 30, 2013 - We expect a gradual interest rate normalization to occur during a prolonged multiyear economic expansion. We believe the U.S. has entered the second half of a seven-year economic expansion, with the past pattern of four years of real GDP growth near 2% to be followed by three years of real GDP growth near 3% in 2014, 2015 and 2016. The lesson of economic history is that a rise in interest rates is a normal pattern in prolonged economic expansions. The onset of the normal cyclical rise in interest rates was delayed this cycle by (1) the severity of the financial crisis and subsequent recession, (2) a slower-than-normal economic recovery, and (3) the extraordinary Federal Reserve actions designed to hold down bond yields below their free-market levels. Now, however, a more normal cyclical pattern of rising interest rates is beginning to emerge. Interest rates are returning to an "old normal" cyclical pattern.
Red Flags Rules Simplified
September 25, 2013 - Certain SEC-regulated entities are required to establish programs that detect and respond to red flags of identity theft. Entities that fall within the rules' scope have until November 20, 2013, to comply. For further information, please review the SEC's adopting release for identity theft red flags rules or the small entity compliance guide.
SIFMA Submits Comments to the SEC on FINRA's Supervision Rule Proposal
September 25, 2013 - Read comments and recommendations from the Securities Industry and Financial Markets Association (SIFMA) to the SEC on the proposed consolidated Financial Industry Regulatory Authority (FINRA) Rules 3110 (Supervision) and 3120 (Supervisory Control System) replacing NASD Rules 3010 and 3012, respectively.
SEC Issues Risk Alert on Business Continuity and Disaster Recovery Planning
September 25, 2013 - On August 27, 2013, the SEC issued a Risk Alert on business continuity and disaster recovery planning for investment advisors. The alert contains observations of continuity plans following Hurricane Sandy and encourages advisors to use the findings to make their own plans more effective. Please review the press release and Risk Alert for additional information.
IRS Releases New FATCA FAQs
September 17, 2013 - The IRS has released two new sets of FATCA FAQs.
IRS Releases Revised Form W-9 in Preparation for FATCA
August 29, 2013 - The IRS has released a revised IRS Form W-9 (Revised August 2013), which includes one new exemption field, one expanded exemption field, an amended certification and updated instructions.
IRS FATCA Online Registration Portal Now Live
August 19, 2013 - The IRS has opened its Foreign Account Tax Compliance Act (FATCA) online registration system.
BNY Mellon Economic Update
August 08, 2013 - In his August 2013 Economic Update, BNY Mellon Chief Economist Dick Hoey states that he expects sustained global economic expansion, with a broad pattern of growth in both developed and emerging countries. From a longer-term perspective, emerging countries have a higher trend growth rate than developed countries, due to continued diffusion of modern technologies and the long-term uptrend in the productivity of their labor force. Cyclically, however, the countries with the best prospects for a near-term improvement in economic growth are the developed countries, as they recover from depressed levels of economic activity in response to easy monetary policy.
Proposed Rule for Improved Systems Compliance and Integrity
August 07, 2013 - In March 2013, the SEC proposed new rules requiring key market participants to implement comprehensive policies and procedures around technology integral to their trading operations. The rules are designed to insulate the market from vulnerabilities caused by system disruptions and ensure that participants can correct problems as they arise.
Ron DeCicco's Recent Regulatory Landscape Presentation at SIFMA Conference
July 18, 2013 - Ron DeCicco, Chief Executive Officer of Pershing, presented "A View From the Top: The Evolution of the Financial Services and Regulatory Landscape and Its Impact on Day-to-Day Operations" at the SIFMA Operations Conference and Exhibit 2013. View his presentation now. Please note that this link will take you to a third-party website located on another server. By clicking the link, you will leave the Pershing website and proceed to the selected site. Pershing does not endorse this website, its sponsor, or any of the policies, activities, products or services offered on the site or by any advertiser on the site.
IndustryWatch at INSITE 2013
July 12, 2013 - Pershing recently hosted INSITE 2013, Pershing’s Financial Solutions Conference. Download the presentations to learn more about the significant regulatory trends affecting your business today.
FATCA Extension Update
July 12, 2013 - On July 12, 2013, the U.S. Department of the Treasury and the IRS announced a six-month extension to the start of the Foreign Account Tax Compliance Act (FATCA) withholding and account due diligence requirements (Notice 2013-43). The new effective date is July 1, 2014.
Large Trader Rule Deadline
July 11, 2013 - Securities and Exchange Commission (SEC) Rule 13h-1 requires that broker-dealers record and monitor activity by large traders associated with their firms, and report the activity to the SEC via the Electronic Blue Sheet (EBS) system. Rule 13h-1 defines large traders as persons who exercise investment discretion and transact certain significant, aggregate volumes or values in National Market System (NMS) securities. November 1, 2013, is the final deadline for broker-dealers to comply with Rule 13h-1.
Recent SEC Initiatives to Address Extraordinary U.S. Market Volatility
July 11, 2013 - The Securities and Exchange Commission (SEC) recently implemented a new plan to address extraordinary market volatility among individual exchange-listed securities in the U.S. equity markets. The SEC also approved updates to the existing market-wide circuit breaker rule that are intended to enhance the rule’s effectiveness.
Economic Update, December 27, 2012: Richard B. Hoey, Chief Economist, The Bank of New York Mellon Corporation
December 27, 2012 - We expect that global GDP growth near 3% in 2012 is likely to be followed by a slightly faster real GDP growth rate near 3.3% for the full year 2013, with weaker growth in the first half of the year and stronger growth in the second half of the year.
SEC Grants Extension to Large Trader Record Keeping and Reporting Deadline
May 03, 2012 - The Securities and Exchange Commission (SEC) has extended the April 30, 2012, compliance deadline for the record keeping and reporting provisions of Rule 13h-1, known as the large trader rule.
Retirement Regulatory Update: An Overview of New ERISA Fee and Expense Disclosures
April 16, 2012 - Over the past several years, the Department of Labor (DOL) has issued a series of regulations that require additional disclosures of fees and expenses by retirement plan sponsors and providers. These new requirements are designed to increase the transparency of the fees and expenses paid by plan sponsors and participants, enabling them to make well-informed choices about their retirement plans.
Economic Update, Richard B. Hoey, Chief Economist, The Bank of New York Mellon Corporation
April 03, 2012 - We continue to believe that the global economy will avoid a full-scale recession. Instead, we expect a global growth recession led by an actual economic decline in Southern Europe, near stall speed economic activity in both the UK and Northern Europe, a moderate deceleration of growth in many emerging market countries, including China, and a growth rate in the United States near trend growth of about 2.5 percent, which would be faster than the U.S. achieved back in 2011.
Investment Insights by Lockwood Advisors, Inc. - Fourth Quarter 2011
March 06, 2012 - Global financial markets continued to be driven by economic headlines and ever-changing investor risk appetites during the fourth quarter of 2011. After a fierce third-quarter equity selloff, the bulls drove riskier assets higher in the beginning of the fourth quarter as volatility subsided from peak levels experienced during the late summer and early fall. Eventually the euphoria subsided and investors took the markets on another roller coaster ride through the end of 2011. As a result, financial market performance ended the year mixed with higher-quality investments substantially outperforming those perceived to carry more risk.
SEC Rule Mandates Large Trader Registration by December 2011
November 30, 2011 - The Securities and Exchange Commission (SEC), spurred by the May 6, 2010, disruption and concerns of systemic risk in the U.S. securities market, adopted Rule 13h-1 in July 2011. Known as the large trader rule, it is designed to enable the SEC to identify and monitor market participants who engage in significant trading activity.
Investment Insights by Lockwood Advisors, Inc. - Second Quarter 2011
July 20, 2011 - Despite the equity market's continued upward trajectory during April, numerous economic headwinds and political issues took their toll on financial markets during May and June. This ultimately resulted in little change to equity market prices during the second quarter of 2011. Supply and demand imbalances in the housing market, persistently high levels of unemployment and underemployment, and escalated debt levels weighed on consumers and depressed confidence levels.
Capital Markets Brief: Smoothing Out the Journey of Investing by Lockwood Advisors, Inc. - June 2011
June 10, 2011 - Has diversification failed investors? And is there a right time to invest? The financial and real estate market crises that began in 2007 and the rapid equity market rise since early 2009 have left some advisors and investors wondering if the time-honored principles of portfolio diversification and the importance of proper asset allocation no longer apply. Chasing recent, strong-performing asset classes or strategies may be tempting to investors; but, unfortunately, it is often a detrimental strategy. The variability of returns among different asset classes poses difficulties in asset allocation. We believe within this variability lies the investor's greatest opportunity.
Call to Action Against the DOL Redefinition of Fiduciary
May 11, 2011 - In October 2010, the Department of Labor (DOL) proposed a redefinition of fiduciary under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code. Many provisions of the regulation do not correspond to existing laws, including the Investment Advisers Act of 1940. They are also inconsistent with the efforts by the Securities and Exchange Commission to establish a uniform fiduciary standard, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Dodd-Frank Wall Street Reform and Consumer Protection Act and the Impact on the Hedge Fund Industry
January 10, 2011 - The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), signed into law on July 21, 2010, will potentially have a dramatic impact on hedge funds and their advisers. The links below describe some of the long-term effects of Dodd-Frank on hedge funds and their investment advisers.
Corporate Governance
January 10, 2011 - The governance of public companies is driven by the proper election of a board of directors by the proxy voting of shareholders. An important factor in voting is how securities firms allocate votes to their clients. At the moment, firms allocate votes using various methods; lack of a consistent method can lead to confusion and to votes not being properly allocated. Pershing and BNY Mellon strongly support the notion of "pre-reconciliation," that is, reducing reduces the number of votes held by the number of shares loaned to others.
Monthly Commentary and Market Outlook by Lockwood Advisors, Inc. - November 2010
January 05, 2011 - The debt concerns facing various European countries re-emerged as a focal point for investors during November as Ireland received an aid package from the European Union and the International Monetary Fund. Many speculate that this will not be the remedy, nor the last aid package distributed, as bond yields have increased substantially for other European nations exhibiting similar debt and deficit characteristics. Elsewhere in the world, tensions on the Korean peninsula have been elevated, as a result of North Korea's shelling of a South Korean island. Both nations have increased their levels of military exercise.
Foreign Account Tax Compliance Act (FATCA)
December 17, 2010 - The Foreign Account Tax Compliance Act (FATCA), which was enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010, increases the ability of the Internal Revenue Service (IRS) to police tax evasion by U.S. persons holding financial assets outside the United States.
Monthly Commentary and Market Outlook by Lockwood Advisors, Inc. - October 2010
November 30, 2010 - The financial markets traded in October with an eye toward November, eagerly anticipating the outcome of the mid-term elections, as well as the Federal Open Market Committee meeting, both of which took place in the first few days of November. Many market participants looked toward these events in hopes of gaining more clarity into the markets direction.
Capital Markets Brief: Are We There Yet? by Lockwood Advisors, Inc. - November 2010
November 19, 2010 - On September 20, 2010, the National Bureau of Economic Research (NBER) made the announcement that it has determined an official end to the nation's most recent recessionary period. The NBER concluded that the recession, which began in December 2007, had actually culminated fourteen months ago in June 2009. And, while the U.S. stock markets treated the news with a favorable reception, the declaration left many pondering the relevancy of what may be a stale conclusion. At present, there are numerous indications that the U.S. economy is not functioning particularly robustly, and many may wonder exactly how it was reasoned that the recession ended over a year ago.
Monthly Commentary and Market Outlook by Lockwood Advisors, Inc. - September 2010
October 27, 2010 - The National Bureau of Economic Research (NBER) announced in September that the U.S. recession officially ended in June 2009. President Obama quickly noted that it does not feel like the recession has ended for many on Main Street who continue to struggle with unemployment and other issues. Warren Buffett also questioned this conclusion, pointing out that "common sense" analysis indicates that the country is not out of the recession yet.
Investment Insights by Lockwood Advisors, Inc. - Third Quarter 2010
October 19, 2010 - As equity market bulls and bears played "tug of war" during the third quarter of 2010, buyers closed out the quarter with the upper hand. The Dow Jones Industrial AverageSM put in its best quarter in 70 years, as the U.S. equity markets finished the third quarter of 2010 with positive gains. In fact, almost every developed and emerging country stock index tracked by MSCI Barra gained during the quarter, with Ireland being the only exception.
Monthly Commentary and Market Outlook by Lockwood Advisors, Inc. - August 2010
September 21, 2010 - In order to continue monetary accommodation and support economic recovery, the Federal Reserve announced that it plans to keep the assets on its balance sheet at the current level of approximately $2.05 trillion, and use the proceeds from maturing mortgage-backed securities to buy Treasury securities.
The Dodd-Frank Wall Street Reform and Consumer Protection Act
September 20, 2010 - The number of legal and regulatory changes impacting the financial industry has been unprecedented over the last two years. We are all asking what the immediate impact of this legislation will be for broker-dealers, registered investment advisers, and investors.

The most recent, and prominent, legislation is the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). This legislation, signed by President Obama in July 2010, will affect almost every aspect of the financial services industry.

Many of the provisions of Dodd-Frank mandate studies, create new governmental agencies or delegate rulemaking to various governmental agencies, such as the Securities and Exchange Commission (SEC). These agencies may need to draft and implement approximately 250 rules to finalize what Dodd-Frank began in July 2010.
Investment Insights by Lockwood Advisors, Inc. - Second Quarter 2010
September 01, 2010 - After more than a year of near-constant growth, the equity markets took a breather in the second quarter. Equity indices across the globe contracted during the past three months, as many investors de-risked positions by shifting to cash and fixed income instruments. This retracement in the rally of equity prices is, in our view, a product of an atmosphere of increased uncertainty in the financial markets.
Capital Markets Brief: A Tale of Two Currencies by Lockwood Advisors, Inc. - August 2010
August 23, 2010 - Nothing seems to rattle the U.S.financial markets quite like the periodic rumblings of currency adjustment that come from China.
 

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