U.S. prepares bevy of rule proposals on asset management, trading

September 27, 2016 3:50 PM EDT

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By Lisa Lambert

WASHINGTON (Reuters) - The top two U.S. securities regulators on Tuesday outlined rule proposals ranging from asset management to swaps dealing they will take up in coming months, indicating the agencies will be at full throttle through election season to the end of the year.

The Securities and Exchange Commission and Commodity Futures Trading Commission are working to enforce mandates from the 2010 Dodd-Frank Wall Street reform law, comply with international regulations and respond to technology changes as part of efforts to keep markets running smoothly and protect investors.

SEC Chair Mary Jo White told an industry group the commission's staff is working on stress testing for asset managers. She added that the agency has come far in creating rules on asset management, noting that last month it proposed an investment adviser reporting regime, and already has taken up proposals on liquidity risk management, fund reporting, derivatives and transition planning.

"In terms of going forward, I expect to see in the next few weeks further adoptions. Some of the others - a little longer than that," she said at a meeting of the Securities Industry and Financial Markets Association. "But we’re very, very concentrated on getting those done."

She said the SEC's plan for a consolidated audit trail, a database tracking equity and options trades, is on schedule and the agency is focused on all aspects of financial technology, with a forum scheduled on it for Nov. 14.

Following White, CFTC Chairman Timothy Massad told the conference that one key focus for his agency is reproposing a rule on capital requirements for swap dealers so that it will be consistent with banking regulations but flexible enough to apply to broker-dealers and other non-banking institutions.

Also Massad expected to finalize before year end a rule limiting the positions that traders can hold in the commodity markets. The rule has been in the works since Dodd-Frank called for setting limits for futures, options and physical commodity swaps contracts to prevent fraud and manipulation.

Massad said that would give the rule an implementation date some time next September, just before corresponding European regulations take effect.

The CFTC is also in the process of hammering out a rule on automated trading and Massad expects the commission will consider in coming weeks a supplemental proposal on issues that have bubbled up over the rule, mainly revolving around the scope and application of testing requirements.

(Reporting by Lisa Lambert; Editing by Andrew Hay)



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