Each fall, SIFMA’s Annual Meeting gathers the most influential voices shaping today’s capital markets. Through candid one-on-one conversations and expert panel discussions, we assess challenges and gain insights into opportunities ahead.

Find out what is top of mind for market participants: register today to join us on November 18-19, 2019 at the JW Marriott in Washington, DC.

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The original concept behind modern financial transaction taxes (FTT) was the Tobin Tax. This proposed, but never enacted, currency transaction tax was meant to eliminate exchange rate differentials among countries across the globe.

The original Tobin proposal was meant to maintain the benefits capital markets bring to investors and economies. It was not meant to impact long term investments, nor was it meant to be a revenue generator for governments with ballooning deficits. Tobin himself disavowed this tax as a means of revenue raising for social purposes and eventually backed off his own proposal.

Despite the fact that the proposed benefits of a Tobin Tax have always been, and remain today, controversial, many countries have tried versions of this tax, now commonly known as FTTs. The primary driver behind FTTs is to raise revenue and curb volatility. The results have failed to meet these objectives. FTTs have been shown to harm individual investors, and the...

U.S. capital markets are crucial to fueling the economy, providing 67% of funding for economic activity and facilitating the transfer of funds from those who seek a return on their assets to those who need capital and credit to grow. Capital markets enable debt issuance, which is a more efficient and stable form of borrowing for corporations. The use of debt capital markets is more prevalent in the U.S., with around 80% of corporate funding coming through the debt capital markets versus 20% bank lending. This is reversed in other major developed and emerging markets. Bank lending can be more cyclical in nature and is, therefore, more prone to disappear during economic or market shocks. The capital markets component of our financial system is an important source of strength for the U.S. economy.

Source: OECD, ECB, Bank of Japan, National Bureau of Statistics of China Note: Euro Area = 19 members using the Euro; other financing = insurance reserves, trade credits...

Washington, D.C., October 10, 2019 – SIFMA released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, regarding rules finalized by the Federal Reserve today:

“SIFMA appreciates the Federal Reserve’s continued willingness to examine and refine the prudential regulatory framework with the goal of making it more efficient, effective and reflective of today’s market realities. We are encouraged by the actions taken today to reduce burdens on domestic banking organizations who pose reduced risk to the financial system, but remain concerned that the tailoring rule does not address many of the punitive requirements that impact non-systemically important foreign banks operating in the U.S.

“SIFMA believes additional enhancements must be made to recognize FBOs as active and critical members of the U.S. capital markets, as they are key participants in facilitating efficient capital markets.  FBOs comprise 65% of primary dealers,...

New York, N.Y., September 27, 2019 — SIFMA has confirmed its previous holiday recommendations for the U.S., the U.K., and Japan in observance of the U.S. Columbus Day and Japan Sports Day Holidays.

These recommendations apply to trading of U.S. dollar-denominated government securities, mortgage- and asset-backed securities, over-the-counter investment-grade and high-yield corporate bonds, municipal bonds and secondary money market trading in bankers’ acceptances, commercial paper and Yankee and Euro certificates of deposit.

SIFMA’s recommended early and full market closes are recommendations only; each member firm should decide for itself whether its fixed income departments remain open for trading. All SIFMA recommendations are subject to change due to market conditions.

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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...

Capital markets drive capital to the best ideas and enterprises, serving as a catalyst for innovation, opportunity and dynamism. Clients benefiting from healthy capital markets include not just investors but also corporations and governments. Capital, raised through equity and debt, can be used to grow businesses, finance investments in new plant, equipment and technology and fund infrastructure projects. This creates jobs and flows money into the economy. Additionally, businesses and individuals can invest in securities to generate wealth.

In 2018, the securities industry raised $2.4 trillion of capital for businesses through corporate debt and equity issuance activity in the United States. While a 10.8% decrease from last year’s post-crisis high, it is the fifth highest issuance on record in our 15 year dataset. Results were mixed across asset classes, with equities +0.4% and fixed income -11.8%, which was driven by a 19% decline in corporate bonds as issuers...

Washington, D.C., October 8, 2019 — SIFMA today issued the following statement from President and CEO Kenneth E. Bentsen, Jr. on the Agencies finalization of changes to the Volcker Rule:

“SIFMA supports the Agencies’ goal of reducing compliance-related inefficiencies of the Volcker Rule.  The revisions finalized by all of the Agencies will help ensure the Rule does not negatively and unnecessarily impact market liquidity, capital formation and economic growth, which could be exacerbated during times of stress.  The removal of the accounting prong is a positive step forward in ensuring the regulatory definition of ‘trading account’ does not go beyond the statutory definition and Congressional intent.

“Several studies showing the Rule’s negative impact on market liquidity, most recently from the Office of Financial Research, and numerous calls by policymakers to simplify the Rule, including from former Fed Chairs Paul Volcker and Janet Yellen and...

Equity issuance, including common and preferred shares, totaled $221.2 billion in 2018, a 0.4 percent increase year-over-year. Initial public offering (IPO) volume, excluding closed-end funds, was $49.9 billion in 2018, up 27.1 percent from $39.2 billion in 2017. Follow-on, or secondary, issuance totaled $154.6 billion in 2018, down 0.3 percent from 2017. Issuance of corporate debt, asset-backed securities and non-agency mortgage-backed securities totaled $2.2 trillion in 2018, down 11.8 percent from 2017. Non-convertible corporate debt issuance fell 18.9 percent to $1.3 trillion in 2018, while convertible corporate debt increased 41.8 percent to $38.6 billion. Nonagency mortgage-backed securities grew 20.5 percent to $269.9 billion in 2018, while asset-backed securities issuance volume fell 6.1 percent to $516.9 billion. U.S. long-term municipal bond issuance totaled $338.3 billion in 2018, a 24.5 percent decrease from $448.0 billion in 2017. Of the total, 58.2 percent was...

The U.S. housing market is a critical piece of the general economy. It represents one-fifth of U.S. GDP and 35% of all private, non-financial debt in the country.

The U.S. Treasury Department just announced that Fannie and Freddie will retain their earnings, a step in moving the companies out of conservatorship and back into the private sector. In this podcast, SIFMA president and CEO, Kenneth E. Bentsen, Jr. is joined by Chris Killian – Managing Director and head of SIFMA’s securitization practice. Together, they explain how that one small move fits into the Administration’s overall goals for housing finance reform.

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Equity issuance, including common and preferred shares, totaled $221.2 billion in 2018, a 0.4 percent increase year-over-year. Initial public offering (IPO) volume, excluding closed-end funds, was $49.9 billion in 2018, up 27.1 percent from $39.2 billion in 2017. Follow-on, or secondary, issuance totaled $154.6 billion in 2018, down 0.3 percent from 2017. Issuance of corporate debt, asset-backed securities and non-agency mortgage-backed securities totaled $2.2 trillion in 2018, down 11.8 percent from 2017. Non-convertible corporate debt issuance fell 18.9 percent to $1.3 trillion in 2018, while convertible corporate debt increased 41.8 percent to $38.6 billion. Nonagency mortgage-backed securities grew 20.5 percent to $269.9 billion in 2018, while asset-backed securities issuance volume fell 6.1 percent to $516.9 billion. U.S. long-term municipal bond issuance totaled $338.3 billion in 2018, a 24.5 percent decrease from $448.0 billion in 2017. Of the total, 58.2 percent was...

New York, N.Y., September 27, 2019 — SIFMA has confirmed its previous holiday recommendations for the U.S., the U.K., and Japan in observance of the U.S. Columbus Day and Japan Sports Day Holidays.

These recommendations apply to trading of U.S. dollar-denominated government securities, mortgage- and asset-backed securities, over-the-counter investment-grade and high-yield corporate bonds, municipal bonds and secondary money market trading in bankers’ acceptances, commercial paper and Yankee and Euro certificates of deposit.

SIFMA’s recommended early and full market closes are recommendations only; each member firm should decide for itself whether its fixed income departments remain open for trading. All SIFMA recommendations are subject to change due to market conditions.

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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...

A decade ago, the Federal Reserve implemented the Comprehensive Capital Analysis and Review (CCAR) process as part of its stress testing framework to assess and regulate capital sufficiency at large bank holding companies. A new study released by SIFMA uses statistical analysis of stress testing scenarios to answer a simple question: does the available evidence indicate that the current Global Market Shock (GMS) and Large Counterparty Default (LCD) shocks from recent CCAR cycles are plausible?

In this podcast, SIFMA president and CEO, Kenneth E. Bentsen, Jr. discusses the study’s analysis and findings with Joseph Seidel, SIFMA’s Chief Operating Officer; Carter McDowell, SIFMA’s Associate General Counsel and Managing Director; and Coryann Stefansson, Senior Advisor to SIFMA.

Strike Listings – Market participants continue to express concerns about the number of strike listings in the options market. There are over 1 million strike listings, on over 4,000 underlyings, yet trades occur in only 10% of these on a daily basis (open interest >50%). We polled the audience at the conference, and, unsurprisingly, a solid majority agreed that there are too many strikes, 79%. While the audience split on whether strike listings are a competitive issue (48% yes/52% no), it was almost unanimous (92%) that a collaborative – exchanges, market participants, SEC – solution could be found for a new strike listings plan.

Innovation, Costs & Best Ex – There are 16 exchanges in the options market under 5 main parent groups (exchange details on a later page), with the top 3 exchanges holding a 46% market share. For exchange groups holding multiple exchange medallions, each one operates a maker-taker and a payment for order flow exchange. The others offer...

Washington, D.C., September 25, 2019 – SIFMA today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO regarding the newly announced U.S.- Japan trade agreement.

“Ensuring financial services providers can manage data on a cross border basis is crucial to the strong security and privacy of data that supports future growth, investment and innovation. We therefore commend the Trump administration for enshrining strong robust digital economy provisions in today’s agreement with Japan including those that ensure the free flow of data and prohibit measures regarding location of data storage facilities. We look forward to further work towards a broader, comprehensive U.S.-Japan trade deal with an ambitious financial services chapter.”

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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...

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:

The SIFMA Fintech Conference examines the impact of emerging technology on the capital markets and how to innovate within existing regulatory frameworks.

Join innovators and industry leaders on September 25 in New York City to discuss issues across risk, operations and compliance and how you can ensure successful fintech implementation.

View the program and register today!

Money market funds are investment vehicles that invest in debt securities with short maturities and minimal credit risk. They are a significant source of cash for the repo markets, lending cash to a broker-dealer or hedge fund in exchange for securities, often Treasury notes. Last week, a confluence of events negatively affected liquidity in the repo markets; a change in the availability of cash caused market rates to nearly double and significant funds to be withdrawn from money market funds. A series of operations by the Federal Reserve Bank of New York injected liquidity into the system, relieving funding pressure and stabilizing rates.

In this supplement to our recent podcast, What Just Happened in the Repo Markets?, SIFMA president and CEO, Kenneth E. Bentsen, Jr. walks through the basics of money market fund operations and explains how they relate to the recent dislocation in repo markets. He is joined by Timothy C. Cameron – Managing Director and Associate...

SIFMA’s Equity Market Structure Conference gathers the industry’s leading experts to examine today’s equity markets and the evolving regulatory framework that guides them.

Join us at The Westin New York at Times Square on September 19 to discuss recommendations and actionable changes to enhance fairness, stability and transparency in the U.S. stock market.

Hear from participants as they address key priorities and issues including:

An annual update and overview of the U.S. repo market.

A repurchase agreement (repo) is a financial transaction in which one party sells an asset to another party with a promise to repurchase the asset at a pre-specified later date (a reverse repo is the same transaction seen from the perspective of the security buyer). Repos can be overnight (duration one day) or term (duration up to one year, albeit some are up to two years and the majority are three months or less). The repo market enables market participants to provide collateralized loans to one another, and financial institutions predominantly use repos to manage short-term fluctuations in cash holdings, rather than general balance sheet funding.

In 2018, the average daily repo and reverse repo outstanding was $3.9 trillion, down 3.3% from 2017. The average daily repo oustanding totaled $2.2 trillion in 2018, down 2.1% y-o-y while the average daily reverse repo outstanding totaled $1.7 trillion in...