Unintended Consequences: Conflicting Regulations, the SEC and MiFID II Requirements

https://tabbforum.com/opinions/unintended-consequences-conflicting-regulations-the-sec-and-mifid-ii-requirements/

Douglas Christensen – Investment firms are moving more and more toward a situation in which they will be paying for research from profit and losses (P&L) instead of using client money. This isn’t necessarily due to firms seeing unjust value in using client money, but more likely a reaction to conflicting regulations across regions and requirements. Inconsistent regulations across regions have forced firms to dip into P&L to pay for research services instead of paying out of expenses of the fund. Investment firms, particularly the large and global, cannot be seen as treating clients differently based on their location. These changes have reverberated across the industry and are potentially doing more harm than good.

SEC Rule 606 Endgame: The Guidance Is Out

https://tabbforum.com/opinions/sec-rule-606-endgame-the-guidance-is-out/

Chris Montagnino, Jordan & Jordan – The SEC staff released the long awaited and heavily anticipated guidance on Rule 606 to assist broker-dealers and the industry with implementation of the new disclosure requirements that were issued back in November 2018 and are scheduled to go into effect on Oct. 1, 2019. There are 32 detailed questions and responses available for your reading pleasure on the SEC website, and if the thought of slogging through the minutiae of the requirements appeals to you, have at it (and please get yourself some help). If you prefer a five-minute read with a consolidated synopsis of the most salient aspects of the guidance and potential impact, you’ve clicked on the correct link.

Eze partners with Tokyo Metropolitan Government in Japan’s resurgent hedge fund market

https://www.marketscreener.com/SS-C-TECHNOLOGIES-HOLDING-6098270/news/SS-C-Technologies-Eze-partners-with-Tokyo-Metropolitan-Government-in-Japan-s-resurgent-hedge-fund-29094191/?utm_content=20190821&utm_medium=RSS

The Tokyo Metropolitan Government (TMG) has introduced the Emerging Manager Program, which includes initiatives such as operational cost subsidies for startups, real-estate accessibility following the hedge fund hotel mantra we saw in the U.S. in the past couple of decades, and more flexibility in terms of licensing for early-stage hedge fund managers-all with the idea of making it easier for a manager to seriously consider staying onshore instead of leaving to take their talents elsewhere. Additionally, to ensure hedge funds start off their operations on the right foot, TMG has launched a ‘Qualified Outsourcing Provider ‘ program to steer managers to the most reputable and knowledgeable providers around the industry while still maintaining cost control through the government subsidies.

Meet Crowdfunding 2.0: Micro-Stock Deals for Small-Fry Investors

https://tabbforum.com/opinions/meet-crowdfunding-2-0-micro-stock-deals-for-small-fry-investors/

By Foster Winans – Meet crowdfunding 2.0, a sophisticated, regulated, entrepreneurial version of platforms like GoFundMe that facilitate donations for people and projects. Instead of donating to a fund to help a local employer whose business was flooded out, it’s now possible for that employer to sell stock which could become more valuable as the firm recovers.

FlexTrade Integrates ACA Technology Decryptex Surveillance

https://theindustryspread.com/flextrade-integrates-aca-technology/

By  – … Shoshana Wainer, Head of Compliance at Albar Capital, commented: “FlexNOW and Decryptex are stand-out products supported by highly-responsive and knowledgeable teams. Integrating Decryptex with FlexNOW allows us to review our trading from a compliance perspective quickly, reliably and with the granularity we need. …”

ACA Technology Decryptex Surveillance

https://www.acacompliancegroup.com/regulatory-technology/decryptex-trade-surveillance-technology

MiFID II Equities: Dark Pools Hit High During Summer Slowdown

https://tabbforum.com/opinions/mifid-ii-equities-dark-pools-hit-high-during-summer-slowdown/

Tim Cave, TABB Group- Dark trading reached its highest level under MiFID II in July, accounting for 9.6% of all on-exchange activity. It is dark pools’ largest market share since April 2019, when they accounted for 9.1% of activity. Block specialist Liquidnet enjoyed a particularly strong month, with total daily notional volumes of €454 million, its third-highest total since January 2017.

The biggest factor affecting dark volumes in Europe is MiFID II’s dark pool caps, which limit the amount of dark trading in a stock to 4% of total on-exchange volumes on any one dark pool and 8% across all dark venues. Volumes are monitored on a retrospective 12-month basis every month, and those stocks breaching the caps are banned from trading in the dark for the next six months.

Integrated Technology Stack for the Sell Side Is Key

https://tabbforum.com/opinions/an-integrated-technology-stack-for-the-sell-side-is-key-to-managing-risk-and-regulations/

Lisa Bravo, Bloomberg LP- By creating a systematic, streamlined workflow that prioritizes intraday risk metrics, it’s possible to solve for some of the biggest sell-side challenges, including tech stack fragmentation and adherence to new requirements. The key lies in integrating all the disparate elements – sifting through analytics in a piecemeal way, for example, wastes time. Integrating the workflow allows traders and salespeople to move much faster and use that efficiency to capitalize on trade ideas.