Sunday, June 27, 2010

Finance Reform Bill, Lobbyists Shift to Regulations

Congress agreed on the Financial overhaul legislation, now Lobbyists and consumer advocates continue their battle: influencing hundreds of new rules and regulations.

Scott Talbott, lobbyist for the Financial Services Roundtable: “Where the rubber meets the road is the regulatory process.”

President Obama hopes to sign the bill into law by the Fourth of July. In weekly address on Saturday, Obama said, “I urge Congress to take us over the finish line, and send me a reform bill I can sign into law, so we can empower our people with consumer protections, and help prevent a financial crisis like this from ever happening again.”

Obama's signature will start the clock on dozens of deadlines embedded in the legislation for regulators from a host of agencies, including the Federal Reserve, the S.E.C. and the F.D.I.C. More on Lobbying and Regulatory follow-through from Sunday NY Times page A1.

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SIFMA's summary of the Dodd-Frank agreements. Right here a summary for Hedge Fund - New Standards and Regulation

Fills Regulatory Gaps: Ends the “shadow” financial system by requiring hedge funds and private equity advisors to register with the SEC as investment advisers and provide information about their trades and portfolios necessary to assess systemic risk. This data will be shared with the systemic risk regulator and the SEC will report to Congress annually on how it uses this data to protect investors and market integrity.

Greater State Supervision: Raises asset threshold for federal regulation of investment advisers from $30 million to $100 million, a move expected to significantly increase the number of advisors under state supervision. States have proven to be strong regulators in this area and subjecting more entities to state supervision will allow the SEC to focus its resources on newly registered hedge funds.
Also this week: hearings before the Financial Crisis Inquiry Commission (FCIC) on Wednesday and Thursday on the role of derivatives in the financial crisis. Joseph Cassano who ran AIG Financial Products, the division behind the insurer's meltdown in September 2008, has evaded public appearances since leaving the insurer some two years ago.

Cassano, will face-off with a panel investigating the causes of the financial crisis. The son of a Brooklyn policeman, Cassano has been the subject of criminal and civil investigations in the United States and abroad, but recently had the specter of prosecution lifted when the U.S. Department of Justice and SEC ended their investigations against him and other AIG executives.

Cassano will rub shoulders with a star cast, which includes Goldman President Gary Cohn and CFO David Viniar
who will testify at hearings before the FCIC next Wednesday and Thursday on the role of derivatives in the financial crisis.

Former AIG CEO Martin Sullivan and AIG Chief Risk Officer Robert Lewis also expected to headline the panel's hearings.

The hearings comes on the heels of Congress' votes on financial reform legislation to address the financial crisis. The roles of Goldman and AIG have been scrutinized since U.S. taxpayers committed hundreds of billions of dollars to bail out the banking industry. Read article about the FCIC hearings.

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