Industry Watch

BNY Mellon Weekly Fixed Income Market Commentary - August 13, 2014
August 13, 2014 - THIS TOO SHALL PASS

With "relative" calm on the geopolitical front, we again find ourselves at a stalemate with regard to the appropriate level of yields and the apropos spread for risk. From this perspective, it's a pattern that has become all too familiar this year, as yields remain low throughout the developed world and the list of investment alternatives remain scarce, at least from a fair value perspective. The recent volatility that has been introduced into the market over the past few weeks gave pause to concern that we were possibly going to break the pattern of complacency that has pushed many parts of the markets to multi-year tights, if not all time high valuations. This has been especially true in the U.S., which is again proving itself to be the best house in a lousy neighborhood, with the hope that taking care of one's property would spur those nearby to also improve the "hood". One region in which this has not been the case is Europe, where European bourses are all decidedly in the red since the ECB moved the interest it pays on excess reserves into negative territory, a tacit acknowledgement of the dimming prospects for the EZ's growth and inflation opportunities. Interestingly, Asian bourses have been the strongest performing during this period, with China and related exchanges moving from worst to first in many instances.

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.
July 09, 2014 - Second Quarter 2014
The second quarter of 2014 witnessed relatively strong market returns across both stock and bond asset classes. In the equity market, the S&P 500® Index, which is often used to represent the total U.S. equity market, returned 5.2%, as all 10 of its economic sectors posted positive returns. Among market capitalization ranges, according to the broadly encompassing suite of Russell U.S. indices, large-capitalization companies reported the largest quarterly return and, stylistically, returns favored value over growth in the small-mid capitalization ranges and growth favored value in the large-capitalization range.
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.
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.
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.
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.
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.
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.
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.
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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