At the time of this discussion, Congress has passed three stimulus packages to combat the severe effects of the global COVID-19 pandemic. In the second of a three-part series on how COVID-19 is impacting the financial markets, Ken Bentsen, SIFMA President and CEO sits down with Jamie Wall and Mark Schuermann from SIFMA’s advocacy team to explain each of the three phases of the stimulus, what matters most for the financial markets, and what might lie ahead.

SIFMA’s team continues to closely monitor the novel coronavirus (COVID-19) and its impact on our industry and the markets; guidance and resources for the industry are available at www.sifma.org/bcp.

The emergence of the global pandemic COVID-19 in the first quarter of 2020 has caused severe economic and capital markets shocks. In light of these market dislocations, SIFMA Research is tracking daily market metrics (prices, volumes, rates) across equities, listed options and various fixed income and securitized products markets. Additionally, we show the trends for the first quarter.

SIFMA’s Business Continuity Planning team continues to closely monitor the novel coronavirus (COVID-19) and its impact on our industry and the markets. Here are guidance and resources for the industry to maintain operational resiliency.

WASHINGTON—The new coronavirus hasn’t shut down financial markets, thanks to electronic trading. But some tasks on Wall Street, it turns out, aren’t made for social distancing.

Brokers are seeking permission from regulators to suspend some tasks that were developed during the era of paper stock certificates. Wall Street’s main trade group, the Securities Industry and Financial Markets Association, says these mundane back-office chores, such as sending signed forms to regulators in Washington, can’t be done when states including...

March 25, 2020

Via email

Brett Redfearn Director, Division of Trading and Markets US Securities and Exchange Commission 100 F Street NE Washington, DC 20549

Re: Request for Regulatory Relief in Connection with COVID-19 Situation

Dear Mr. Redfearn:

The Securities Industry and Financial Markets Association (SIFMA)1 and our member firms greatly appreciate the recent efforts of the Securities and...

The U.S. fixed income markets are the largest in the world, comprising 39.4% of the $103 trillion securities outstanding across the globe, or $41 trillion (as of Sept. 2019). This is 1.9x the next largest market, the EU. U.S. market share has averaged 39.4% over the last 10 years, troughing at 37.4% in 2011 and peaking at 41.8% in 2015.

Washington, D.C., March 30, 2020 – SIFMA today announced Joseph Corcoran has been appointed managing director and associate general counsel reporting to Robert Toomey, head of SIFMA’s capital markets practice.

“We are very excited to have Joe join our team,” Mr. Toomey said. “He has substantial experience in a variety of sectors of the capital markets which gives him a clear understanding of the importance of capital markets and the practical implications of policy and regulatory decisions.”

Joseph Seidel, chief operating officer of SIFMA added, “Joe’s broad industry and regulatory experience will be a great benefit to our members and the broader industry. His skills will be a welcome addition to the strong SIFMA capital markets practice and their efforts to ensure our capital markets remain strong and efficient.”

Most recently, Mr. Corcoran was Vice President in the Legal Department at the Options Clearing Corporation and previously served as Head...

March 25, 2020

Via email

Brett Redfearn Director, Division of Trading and Markets US Securities and Exchange Commission 100 F Street NE Washington, DC 20549

Re: Request for Regulatory Relief in Connection with COVID-19 Situation

Dear Mr. Redfearn:

The Securities Industry and Financial Markets Association (SIFMA)1 and our member firms greatly appreciate the recent efforts of the Securities and Exchange Commission (the “Commission”) and the Division of Trading and Markets to assist the industry in navigating the COVID-19 crisis and to provide relief from certain regulatory requirements.

Over the last decade, securities market participants have been developing and refining their contingency plans to manage potential disruptions created by epidemics and pandemics. We have been continually reviewing and evaluating these plans in light of COVID-19 events and would like to bring to your attention, for regulatory relief consideration, the...

SIFMA’s BCP team is closely monitoring the Coronavirus (COVID-19) and its impact on our industry and the markets.

Financial services is a critical infrastructure sector as defined by the U.S. Department of Homeland Security. Its assets, systems and networks, whether physical or virtual, are so vital to the U.S. that their incapacitation or destruction would have a debilitating effect on security, national economic security and national public health or safety.

In the event of a significant incident that affects or has the potential to affect the operations of the financial system, SIFMA helps to coordinate the financial industry’s business continuity planning efforts. These efforts are managed through SIFMA’s Emergency Crisis Management Command Center, which identifies the status of industry participants, disseminates vital information and facilitates actions to assist market response and recovery. Coordination is arranged amongst financial firms,...

The U.S. fixed income markets are the largest in the world, comprising 39.4% of the $103 trillion securities outstanding across the globe, or $41 trillion (as of Sept. 2019). This is 1.9x the next largest market, the EU. U.S. market share has averaged 39.4% over the last 10 years, troughing at 37.4% in 2011 and peaking at 41.8% in 2015.

The novel coronavirus (COVID-19) is front and center across the world. In this podcast, Ken Bentsen, SIFMA President and CEO, and Tom Price, SIFMA Managing Director, Technology, Operations and Business Continuity, discuss industry-wide BCP efforts to protect personnel and maintain operational resiliency during the COVID-19 pandemic.

SIFMA’s Business Continuity Planning (BCP) team continues to closely monitor the novel coronavirus (COVID-19) and its impact on our industry and the markets; guidance and resources for the industry are available at www.sifma.org/bcp.

Sometimes, a retrospective can help us look forward.

SIFMA Research just released our flagship Research Quarterly: Fixed Income report, along with new statistics and updates to our interactive data visualization. This extensive trove of fixed income market data covers U.S. Treasuries, mortgage-backed securities, corporate bonds, municipal securities, federal agency securities, asset-backed securities, money markets, repurchase agreements and the secured overnight financing rate (SOFR).

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Washington, D.C., March 20, 2020 –  SIFMA joined the Managed Funds Association, U.S. Chamber of Commerce, American Cotton Shippers Association, International Swaps and Derivatives Association and Investment Company Institute today in issuing the following statement on the importance of keeping U.S. financial markets open:

“The U.S. financial markets are critical infrastructure to our nation, and they continue to function as designed despite the volatility caused by the coronavirus. Keeping all U.S. financial markets open is essential to the well-being of the general economy and vital to maintaining and bolstering investor confidence, particularly once the economy recovers from effects of this pandemic.”

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation...

SIFMA and the Bank Policy Institute’s (BPI) 2020 Prudential Regulation Conference will focus on the tailoring of prudential regulation and the supervision of the capital markets. With regulators using the principles of fairness, predictability, efficiency, accountability, and transparency to guide them, we’ll explore what these principles mean and discuss how regulators and the industry might apply them to capital markets regulation, supervision, risk management, and more.

Hear from regulators, the industry, and policy makers on how the combination of new technology and these principles can help the industry evolve, remain safe and sound, and spur innovation and technological transformation. Register today!

U.S capital markets are the largest in the world: 41% of global equity and 40% of global fixed income. They account for the dominant $ value and % of global activity in every market sector, representing on average 46% of total global market activity.

Why is it important that the U.S. remains the deepest, most liquid and most efficient capital markets in the world? First and foremost, they provide diversified funding options. This means we are more attractive to businesses looking for capital and also means that the U.S. economy is less vulnerable to economic or market shocks.

We’ll explain: in other countries, bank lending dominates corporate borrowing. Because bank lending is cyclical, it dries up after economic shock.

In the U.S., the inverse is true: bank lending accounts for just 26% of corporate borrowing, while corporate bonds are 74%.

During periods of economic stress, capital markets diversify funding and act as a...

Washington, D.C., February 18, 2020 – SIFMA today issued the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, on the subject of a financial transaction tax:

“A Financial Transaction Tax, or FTT, would tax middle class savers, including pension funds, 401ks and IRAs.  At a time when market development, efficiency and competition are driving the cost of investing toward zero, it makes little sense to increase the cost through what is essentially a sales tax.  Further, the threat such a tax poses to the efficiency of the U.S. capital markets is real.  It begs the question, what’s the point?”

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and...

Late last week, the Federal Reserve published its “2020 Supervisory Scenarios for the Annual Stress Tests Required under the Dodd Frank Act Stress Testing Rules and the Capital Plan Rule.” The macro scenarios remain severe given the various inputs. However, this year the various elements appeared to more generally track the real-life experiences during the financial crisis, with some exceptions like GDP, unemployment, and the stock market[1], which were more severe. Similarly, the Global Market Shock (GMS) [2] generally reflected a similar degree of severity as the 2019 factor shocks, with some notable exceptions like those applied to the equity market, US treasuries, credit card ABS, FX, CLO, and private equity. We’ll elaborate more on those factors momentarily.

This year’s scenarios include some process improvements, which directly address some of the recommendations related to transparency included in SIFMA’s white paper – Global Market Shock and Large...

The transition from the London Interbank Offered Rate (LIBOR) to alternative interest rate benchmarks is well underway, but much work lies ahead in order to implement a successful reference rate change by the end of 2021. At this time, markets will no longer have certainty of LIBOR publication.

In this primer from SIFMA Insights, we provide an overview of the LIBOR transition, with a focus on the proposed U.S. alternative reference rate, Secured Overnight Financing Rate (SOFR).

Highlights from the primer include: