Here Comes MiFID Part 2-What BrokerDealers Need to Know

Posted on October 12, 2015 by admin

MiFID II is in the batter’s box, and BrokerDealer.com provides a good primer for investment banks and broker-dealers courtesy of Traders Magazine contributor Simon Richards of Fonetic USA.

BrokerDealer.com note: Its time to deploy a new regime of voice-recording record keeping…

The investment banking beast is changing its spots. Driven by the regulators and the threat of billion dollar fines, these traditionally ponderous organizations are awake to what they need to do in order to comply with the Dodd-Frank Act and MiFID. But it is quite clear that the establishment of new regulations is not going to be a one-off occurrence.

BrokerDealer.com provides the most comprehensive list of global brokerdealers with a database of broker-dealers in 35 countries across the world.

The recent changes to the Markets in Financial Instruments Directive — MiFID II — demonstrate that the regulations are going to change often and rapidly. Adapting to amendments to regulations is the new status quo.

The MiFID II changes are wide-ranging and will affect functions across the board from trade strategy, trade initiation, trade execution, settlement and clearing to ongoing management. Your firm’s IT and HR systems are also likely to be affected.

One significant change is that the scope of the Transaction Reporting Obligation is being extended. Investment firms will have to keep a complete record of all services, activities and transactions in a format that can be accessed by regulators. Let’s take a look.

Phone and Ecomms: Firms must record all phone and electronic communications relating to concluded and potential transactions. The records must be stored for a minimum of five years and where requested by an authority up to seven years. Under Dodd-Frank, phone recordings are required to be kept for 12 months.

Storage: All electronic records must be stored in a medium that cannot be changed or deleted and must be available to clients on demand.

Trading: All trades, including algorithmic trading records, must be stored on an approved form with accurate, time-sequenced record of orders that were placed executed or cancelled. Firms must keep all relevant data relating to orders and transactions, whether for their own account or on behalf of clients.

The MiFID II amendments illustrate that the regulations are subject to rapid change. This means the industry needs to become more strategic. In short, tactical solutions are no longer going to cut the mustard.

To read the entire primer, please visit TradersMagazine.com

Simon Richards is CEO of Fonetic USA.

SEC New Rules Requiring BrokerCheck Links

Posted on October 9, 2015 by admin

The Securities and Exchange Commission has approved a Finra rule that would require brokerage firms to include a link to a public database containing background information about their brokers on their websites.

Under the rule, a brokerage will have to include a “readily apparent reference and hyperlink” to BrokerCheck on a homepage that is initially viewed by retail investors. It also would have to include links to the database on profile pages of individual brokers.

The rule will go into effect no later than 180 days after the SEC approval order is published in the Federal Register. It’s not clear when the order will appear there.

BrokerDealer.com provides the world’s largest database of registered broker-dealers operating across 35 countries worldwide

To read the entire story, published by InvestmentNews.com , please click here

BrokerDealer Profits Up 30 Percent; Sell The News?

Posted on October 8, 2015 by admin

Wall Street broker-dealers posted profits of $11.3 billion in the first half of 2015, up nearly 30 percent (for metric mavens, the more accurate number is 29 percent) year-on-year and the strongest first half since 2011, according to a report by a New York financial watchdog on Tuesday–and published by Financial Advisor Magazine

However, the report by New York state Comptroller Thomas DiNapoli said a slowing global economy could put pressure on the industry in the remainder of the year.

As published by FA Mag, “After a very strong first half of the year, the securities industry faces volatile financial markets and an unsteady global economy,” DiNapoli said in the report.

The report said a recent return to jobs growth in the industry could be undermined in the remainder of the year. The industry added 2,300 jobs in 2014, the first year of jobs gains since 2011, a trend which accelerated over the first eight months of 2015, the report found.

The industry had been “on pace to add more than 4,500 jobs in 2015 before recent concerns over weakness in the global economy roiled the financial markets,” it noted.

The yearly report aggregates tax data from the broker-dealer operations of New York Stock Exchange member firms. Those operations have been profitable for the six years since the financial crisis in 2008, according to the report.

This BrokerDealer Gives Back and Helps Lead The Way

Posted on October 6, 2015 by admin

army ranger lead the way fund marketsmuse update

BrokerDealer.com blog update is honored to re-play the news update profiling minority brokerdealer Mischler Financial’s mission to support Army Ranger Lead The Way Fund, the non-profit dedicated to supporting the families of US Army Rangers killed in the line of duty and service-disabled Rangers and their families in need of financial support that is not made available by the federal government.

(r) Mischler Fixed Income Trader Glen Capelo (c) Duke University Coach K” Krzyzewski (r) Mischler CEO Dean Chamberlain

Oct 5 2015–Stamford, CT and Newport Beach CA–Mischler Financial Group, Inc., the financial industry’s oldest and largest institutional brokerage and investment bank owned and operated by Service-Disabled Veterans is pleased to have served as a Silver Sponsor for the 2015 Army Ranger Lead The Way Fund Gala. Silver Sponsors contributed a minimum of $25,000; proceeds to Lead The Way are dedicated to support service-disabled US Army Rangers and the families of Rangers who have died, have been injured or currently serving in harm’s way around the world.

This year’s annual gala took place September 30 at New York’s Chelsea Piers and NBC News Anchor Tom Brokaw served as Master of Ceremonies. The 2015 Lead The Way event paid tribute to 5-time NCAA champion and college basketball legend Mike “Coach K” Krzyzewski, a US Military Academy at West Point Graduate (USMA ’69) and a former classmate of Mischler’s Founder and Chairman Walt Mischler. Coach K served two tours of duty prior to his career as a world famous university basketball coach.

Mischler Financial’s VP of Capital Markets Robert MacLean (USMA ’02), who served seven years as a US Army Ranger and is a two-time recipient of the Bronze Star, served as a member of this year’s Lead The Way Fund Host Committee. MacLean shared that honor with a short list of military veterans who have since forged a path on Wall Street at firms that include among others, Goldman Sachs, JPMorgan, UBS, Credit Suisse, Barclays, and Fortress Investment Group.

After Coach K retired as a Captain in the US Army, he then served five years as Head Coach for the USMA before accepting the role of Head Basketball Coach for Duke University’s Blue Devils in 1980. During the past 35 years, Coach K has not only led his team to five NCAA champions, he has dedicated the past nearly four decades to contributing his thought leadership to an assortment of national and local philanthropic initiatives.

Stated Mischler Financial Group CEO Dean Chamberlain, also an alumnus of the USMA (’85) who served two tours of duty prior to injuries sustained in the line of duty, “In addition to personal contributions on the part of our firm’s leaders, Mischler provides year-round support to a select group of military veteran and SDV-focused philanthropies and we are particularly honored and proud to continue our ongoing support of Lead The Way, one of the most impactful organizations dedicated to providing assistance to military veterans and their families.”

Minority BrokerDealer: Corporate Bond Market Balancing on Knife Edge

Posted on October 3, 2015 by admin

BrokerDealer.com blog update offers weekend reading courtesy of MarketsMuse Fixed Income Department..

“Corporate Bond Market- Balancing on a Knife Edge” is courtesy of extract from the 10.02.15 weekend edition of “Quigley’s Corner”, a daily synopsis of the investment grade corporate bond market and rates trading space authored by Ron Quigley, Managing Director of investment bank and institutional brokerage Mischler Financial Group, the financial industry’s oldest and largest minority brokerdealer owned and operated by service-disabled military veterans. Mischler Financial was selected in 2014 and again in 2015 for the Wall Street Letter Award “Best Research-Brokerdealer”

Ron Quigley, Mgn.Dir. Mischler Financial Group

Blackouts couldn’t be more optimally timed as we experience massive re-pricing in our IG primary credit market. The corporate black-outs are serving as an unplanned, well-timed inherently built-in “kick-the-can” that is necessary in helping us to all buy time as we navigate thru what is perhaps the most unpredictable, treacherous, volatile and uncertain time that our primary markets have experienced since 2008. As one very senior syndicate source told me “the credit markets are sitting on a knife’s edge.” IG spreads are on the whole 44 bps wider at the end of the third quarter according to Morgan Stanley.

Today’s notoriously and unexpected poor employment data was the last thing credit markets needed and it has instigated a massive Treasury rally. Perhaps this is a bit of good news because when both are combined, is a potential high velocity tailwind to credit products from big government bond funds. However, that’s “if” funds want to own credit product and hold it for an extended period of time and potentially wear a negative mark-to-market.

Having said that, the guy-in-the-corner suggests that at some point this weekend, you should put on your favorite song and sing along to it after many shots of tequila. When you get to the point of feeling bad, look at yourself in a mirror and realize that you can begin to feel better with coffee, food, sleep and time but come Monday morning the business model you are used to is about to change. Not adapt; not get better; rather change. The trends in the credit markets that we have seen over the last two quarters are showing no signs of abating, and in some degrees, worsening.

Now please let me introduce the moment you’ve been waiting for..

Syndicate Forecasts and Sound Bites from “The Best and the Brightest!”

I am happy to report that once again the “QC” received unanimous participation from all 23 syndicate desks surveyed in today’s Best & Brightest polling. That includes all of the top 22 ranked syndicate desks according to Bloomberg’s U.S. IG U.S. Investment Grade Corporate Bond underwriting league table that can be found on your terminals at “LEAG” + [GO] after which you select #201 (US Investment Grade Corporates). Their cumulative underwriting percentage is 94.00% of YTD IG dollar debt underwriting which simply means they’re the ones with visibility. But it’s not only about their volume forecasts, rather it’s also about their comments! This core syndicate group does it best; they know best; so they’re the ones you WANT and NEED to hear from.

*Please note that these are Investment Grade Corporates only. They do not include SSA issuance unless otherwise noted.

The question posed to the “Best and the Brightest” early this morning was:

“Good morning! So, this week the massive repricing in primary markets saw average NICs bust out to 54.23 bps; bid-to-covers shrank to an average 2.02x; today’s numbers were BAD; Obamanomics is quite the engine of growth and job creation, China’s slowdown is showing up in our data (ISM Milwaukee posted its worst manufacturing number since the dot com bubble). Spreads are wider on today’s data to start. Lower-for-longer might just be lower forever! The two-part question for today is what are your volume forecasts for IG Corporate supply for BOTH next week AND October? It’s going to be challenging to nail that down but it’s an important survey at this critical juncture. Many thanks, Ron”

……and here are their formidable responses:

To continue reading, please visit Mischler Financial Group’s market commentary section via this link