I tried.
"Regulators to probe online bond trades" by Dave Michaels, Bloomberg News January 07, 2015
WASHINGTON — The brokerage industry’s self-regulator will spend 2015 looking into whether deals between brokers and exchanges are taking money out of investors’ pockets, regulators said in a letter outlining the year’s oversight priorities.
The Financial Industry Regulatory Authority also will review whether customers get fair prices on electronic bond-trading platforms and how brokers market financial products that are sensitive to interest-rate changes, such as alternative mutual funds, structured retail products, and bank-loan mutual funds, it said.
What the article is basically telling you is that even after the crash of 2008 and Dodd-Frank, banks are back to doing the same things they did leading up to the meltdown. This time it will be no different.
The letter lays out some of this year’s biggest concerns for Finra, which is funded by the brokerage industry that it polices. The group, which levied about $60 million in fines last year, has faced repeated criticism from other regulators and investors that it isn’t tough enough on Wall Street misconduct.
In recent brokerage inspections, Finra found that some firms don’t have active “best-execution committees” or other supervisors in place to ensure that clients get the best price, as securities rules require, according to the letter.
“We certainly expect to see tightening up and much greater focus from firms,” Finra chief executive Richard Ketchum said. “There is a high likelihood you’ll see enforcement actions, as well.”
Regulators and lawmakers have said brokers face a conflict of interest when exchanges offer them rebates and other incentives to draw their business. Brokers have more than 40 exchanges and private trading venues to choose from when filling their clients’ orders.
The Securities and Exchange Commission, which oversees Finra, has already been looking into the issue. Senator Carl Levin in a June hearing grilled TD Ameritrade Holding Corp. executives on the firm’s practice of selling retail orders to be filled by market makers.
But.... they have such funny commercials on TV with upbeat music.
Finra also said it will launch a pilot program to probe whether brokers who use electronic bond-trading platforms are getting the best prices for customers. Unlike stock exchanges, bond-trading venues generally don’t make prices available to the public. That leaves investors with little means to verify whether they’re receiving the best price or paying a significant markup over what a dealer paid.
The venues have grown in popularity as more trading moves to computer platforms. About 16 percent of investment-grade corporate bond trading happens on such systems, according to Greenwich Associates. Regulators such as Finra and the SEC have largely allowed them to develop free from stringent oversight.
“We’re at a significant flex moment with respect to the handling of fixed-income orders,” Ketchum said. “We do think it deserves more attention.”
Last year, the SEC and Finra began a campaign to force more transparency of bond prices and markups on sales to retail customers. Such a move could generate opposition from banks, which derive a significant portion of their income from bond trading and sales. It’s historically been more profitable to trade bonds than stocks because the debt markets are less transparent, making it easier for brokers to take a bigger fee for each exchange.
Finra will also examine brokers’ sales of alternative mutual funds, structured retail products, and bank-loan mutual funds, Finra said. The regulator will be looking for cases in which brokers might have pushed investors into large, concentrated positions in products that are highly sensitive to interest-rate changes.
Alternative mutual funds are among the fastest-growing segments of the $15 trillion fund industry. Finra said it has found some brokers aren’t adequately reviewing new alternative mutual funds, which mimic riskier hedge-fund strategies, before selling them.
“It’s important for customers to understand they are dealing with higher fees and a level of complexity,” Ketchum said. “They have to really understand the risk-return involved in the products.”
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The Vanguard of the group:
"Vanguard to offer its first muni-bond ETF on tax-free appeal" by Brian Chappatta, Bloomberg News January 07, 2015
NEW YORK — Vanguard Group plans to offer its first exchange-traded fund focused on the $3.6 trillion US municipal-bond market.
Valley Forge, Pa.-based Vanguard, which oversees about $140 billion in municipal debt, has filed a registration statement with the Securities and Exchange Commission for the index fund, which is tax-exempt, according to a news release issued Tuesday. The company expects the fund to be available by the end of June.
Adam Ferguson, who currently manages muni funds, will run the new offering. Its benchmark, the S&P National AMT-Free Municipal Bond Index, is the same as the $4.2 billion iShares National AMT-Free Muni Bond ETF. MUB, as it is called after its ticker symbol, is the largest such fund tracking state and city bonds.
“For investors in high tax brackets, a high-quality, broadly diversified municipal bond fund or ETF can provide tax advantages as well as diversification from the risks of the equity market,” Vanguard’s chief executive, Bill McNabb, said in the statement.
Related: Pouring $alter in the Wound
The appeal of tax-exempt interest on munis has grown for high earners, who last year faced the highest top tax bracket since 2000.
You are getting milked, taxpayers.
Including a 3.8 percent tax on the investment income of top earners resulting from the 2010 Patient Protection and Affordable Care Act, the top federal rate is 43.4 percent.
Yeah, right, the rich are being taxed more than ever. If that isn't more $alter being poured into the wound....
The 1.99 percent yield on AAA 10-year munis is equivalent to a taxable rate of 3.52 percent.
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"Obama taps community banker for Fed board" by Martin Crutsinger, Associated Press January 07, 2015
WASHINGTON — President Obama has selected the former head of a community bank to fill a vacancy on the Federal Reserve Board.
Who cares what suit is picked to $erve? It's the whole $y$tem that's rotten.
The White House said Tuesday that Obama will nominate Allan R. Landon, former chief executive of the Bank of Hawaii, to fill one of two vacancies on the seven-member board. The nomination will require Senate confirmation.
The decision comes after a lobbying campaign by community bankers, who argued that the Fed, which regulates banks, should have at least one community banker on its board.
A token, if you will.
The White House said Landon has a strong record from leading the Bank of Hawaii through the 2008 financial crisis. He was chairman and chief executive from 2004 to 2010.
Camden R. Fine, president of Independent Community Bankers, an industry group, praised the selection.
“Having someone with community bank experience . . . will ensure that community bank interests are more fully understood as the board considers the impact of its policies on smaller banks and the communities and rural areas they serve,” Fine said.
The Fed has had two unfilled positions since spring. Sarah Bloom Raskin stepped down in March after being picked to be deputy Treasury secretary. Jeremy Stein left in May to return to his post as an economics professor at Harvard University.
The seven members of the Fed board and the presidents of the Fed’s 12 regional banks serve on the Federal Open Market Committee, which meets eight times a year to set interest rate policies. The Fed board is also a leading bank regulator through its role of overseeing bank holding companies.
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Related: The Fed Goes Global
