SIFMA: News on the capital markets, securities and financial industry

Industry News

MF Global clients' accounts transferred, need more collateral
R.J. O'Brien and other firms have taken over the accounts of former MF Global customers. The transfer of the accounts led to demands for more collateral. "Every former MF Global account faces a margin call," according to a notice from R.J. O'Brien. "No excess equity was transferred." The New York Times (tiered subscription model)/DealBook blog(11/6)

Analysis: New government won't keep Greece from default
Greek Prime Minister George Papandreou has said he would step down and allow the country form a new coalition government, but that won't prevent a default, according to this analysis. Papandreou's aborted attempt to hold a referendum on fiscal austerity was another step toward default. Then came the decision by the International Swaps and Derivatives Association that the "voluntary" haircut on Greek debt would not trigger credit-default swaps. Barron's (subscription required)(11/5)

CoCo market expected to become significantly larger
Some market observers expected the Basel Committee on Banking Supervision's ruling on contingent convertible bonds and other hybrid securities to kill the market, but they are now expected to take off. Financial Times(tiered subscription model)(11/6)

Other News

BofA share issue won't cover capital shortfall, analyst says
TheStreet.com (11/4)
UBS reportedly plans to make Ermotti permanent CEO
Bloomberg (11/5)
Analysis: MF Global's downfall is another blow to financial sector
Financial Times (tiered subscription model) (11/4)
BlackRock's Rieder expects Fed to buy more Treasury bonds
InvestmentNews (free registration) (11/4)

Washington Roundup

CFTC's Gensler removes himself from MF Global probe
Gary Gensler, chairman of the Commodity Futures Trading Commission, recused himself from the investigation into the collapse of MF Global. Gensler wanted to eliminate any perception of a conflict of interest because of his relationship with Jon Corzine, the recently departed CEO at MF Global. Gensler and Corzine worked together at Goldman Sachs Group. The Wall Street Journal (tiered subscription model)(11/7), Bloomberg(11/5)

Democrats push tax on financial transactions
A group of Democratic lawmakers is moving forward with the idea of a tax on financial transactions while acknowledging significant obstacles. The Obama administration, congressional Republicans, SIFMA and other financial services groups oppose such a tax. The Hill/On The Money blog(11/6)

Dealers scrutinize MSRB's draft rule on broker's brokers
Dealer groups and participants in the municipal bond market are raising concerns about a draft rule from the Municipal Securities Rulemaking Board that would govern broker's brokers. Insiders said the rule would hinder secondary market liquidity. "Any impediments to trading in what is already a labor-intensive market must be carefully reviewed to ensure that the burdens to liquidity are justified," according to Leslie Norwood, managing director and co-head of the muni division at SIFMA. Read the letter from SIFMA. The Bond Buyer (special access for readers of SIFMA SmartBrief)(11/7)

SEC presses mutual funds to improve derivatives disclosure
The Securities and Exchange Commission is urging mutual funds to provide more detailed, specific information about their use of derivatives. Financial Times(tiered subscription model)(11/6)