MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
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Thursday, July 15, 2010 Fido May Avoid the 'Systemically Significant' Label Fidelity and State Street both may soon have an extra reason to thank their newest U.S. Senator. CNBC's Eamon Javers reports that, thanks at least in part to Senator Scott Brown (R-Massachusetts), Fido has a better shot of not being labeled a "systemically significant" firm by the government and State Street may be able to partly get around the proposed Volcker rule against proprietary trading. CNBC notes that Representative Barney Frank (D-Massachusetts), chairman of the House Financial Services Committee and a key player in the financial reform bill negotiations, probably also had a hand in helping on one or both of those provisions (since he, too, hails from the Bay State). Mammoth Fidelity worried that -- under one definition that focuses on size -- it might be considered systemically significant and thus face extra regulation and more. Thanks at least in part to Brown, that definition now instead focuses on what the firm does (notably how interconnected and leveraged it is) instead of size. Ned Johnson and his team at the mutual fund titan seem satisified. "During the debate over past several months we expressed concern that some financial regulatory reform proposals would have unintended consequences and restrict well run entities in Massachusetts and elsewhere, and treat Fidelity as a bank -- which would be inappropriate for our business and risk model," a Fido statement to CNBC reads. "We believe it is important to avoid a 'one size fits all' approach for different segments of the financial sector." State Street, CNBC adds, worried instead about a complete Volcker-esque ban on proprietary trading by banks. Brown helped change that ban to a restriction whereby banks could provide three percent or less of a hedge fund's or private equity fund's capital and could invest three percent of less of their "Tier one" capital. The New York Times' "DealBook" blog followed up on the news. And here's a video clip from CNBC. Printed from: MFWire.com/story.asp?s=32807 Copyright 2010, InvestmentWires, Inc. All Rights Reserved |