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“Dark Pools” In Equity Trading: Significance and Recent Developments, CRS Insights (August 27, 2014)

September 16, 2014 Comments off

“Dark Pools” In Equity Trading: Significance and Recent Developments, CRS Insights (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Dark pools are relatively recent and controversial electronic stock trading alternatives to traditional exchanges, such as the New York Stock Exchange (NYSE), and now account for about 15% of overall trading volume. A dark pool is a type of alternative trading system (ATS), a broker-dealer who matches the stock trading orders of multiple buyers and sellers outside of exchanges. Orders sent to dark pools to buy or sell certain stocks are not publicly displayed. When they emerged in the late 1990s, that opacity attracted the pools’ initial clients, institutional investors (such as pension and mutual funds), who used it to conceal large trading interests, thus helping to reduce the risk of the market moving against their trades. Quote concealment is a legacy of a regulation adopted by the Securities and Exchange Commission (SEC) in 1998, Regulation ATS, which allowed ATSs with less than an average 5% share of the trading volume to not publicly display their quotes. This contrasts with the “lit” venues, Nasdaq and the exchanges, which do.

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Safe as Houses: Majorities of Americans See Home Ownership, Gold and Jewelry as Safe Investments

September 14, 2014 Comments off

Safe as Houses: Majorities of Americans See Home Ownership, Gold and Jewelry as Safe Investments (PDF)
Source: Harris Interactive

Despite periods of volatility in the real estate market over the past few years, over seven in ten Americans (72%) see owning a home as a safe investment. Majorities agree on this point across generations, albeit with considerable shifts from one generation to the next: nine in ten Matures (89%) see home ownership as a safe investment, compared to just over three-fourths of Baby Boomers (77%) and seven in ten Gen Xers (70%). Even among Millennials – for whom the subprime mortgage crisis of 2007-2008 and the ensuing financial crisis it helped kick off is likely a more formative experience – the majority still see home ownership as a safe investment (63%), albeit with a slimmer majority vote than any of their elder counterparts.

Majorities of Americans also see gold (65%) and jewelry (59%) as safe investments.

The SEC’s Focus on Cybersecurity: Key considerations for investment advisers

September 9, 2014 Comments off

The SEC’s Focus on Cybersecurity: Key considerations for investment advisers
Source: Deloitte

The growing number and complexity of cybersecurity risks facing investment advisers (IAs) has triggered an increased interest in cyber risk management by the United States Securities and Exchange Commission (SEC). Cyber risks and the SEC’s related focus are particularly relevant for mutual funds, hedge funds, and private equity managers.

In this point of view, we outline key considerations arising from the cybersecurity Risk Alert issued by the SEC’s Office of Compliance Inspections and Examinations (OCIE) and describe how IAs can prepare for an OCIE cybersecurity examination and leading practices for IAs to utilize when addressing cybersecurity threats.

Deloitte expects the SEC and its staff to continue to focus on cybersecurity, particularly as the results of a planned sweep of fifty cybersecurity exams unfold. It is critical that IAs not only meet SEC expectations in the cybersecurity arena, but also invest in a program to become secure, vigilant, and resilient in the face of cybersecurity risks.

Rise of the Startup City: The Changing Geography of the Venture Capital Financed Innovation

September 8, 2014 Comments off

Rise of the Startup City: The Changing Geography of the Venture Capital Financed Innovation
Source: Martin Prosperity Institute (Richard Florida)

Virtually the entire modern literature on urban economics – from Jane Jacobs and Robert Lucas to Edward Glaeser and Richard Florida – highlights the role of clustering, density, and diversity of the sort found in cities as key drivers of innovation. Dense urban areas are more productive. They are where highly skilled talent is drawn both to be around other talented people and to enjoy abundant amenities. They are the centers of the kinds social and industrial diversity needed to power creativity and innovation. They give rise to and facilitate the overlapping knowledge and professional networks through which knowledge and ideas spread. They are the places where people from diverse backgrounds can find one another and combine their talents. They are literally defined by their speed of connections and faster urban metabolisms. More than any other social or economic organism, cities are incubators for new ideas, new innovations and new enterprises. In a recent review of the broad literature on urbanism and innovation, economists Gerald Carlino and William Kerr write that: “three-quarters of the U.S. population resided in metropolitan areas. By contrast, 92 percent of patents were granted to residents of metropolitan areas, and virtually all VC investments were made into major cities.”

CRS — Social Security: Trust Fund Investment Practices (August 20, 2014)

August 27, 2014 Comments off

Social Security: Trust Fund Investment Practices (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The Social Security Act has always required surplus Social Security revenues (revenues in excess of program expenditures) to be invested in U.S. government securities (or U.S. government-backed securities). In recent years, attention has been focused on alternative investment practices in an effort to increase the interest earnings of the trust funds, among other goals. This report describes Social Security trust fund investment practices under current law.

Global Investor Confidence in US Soars for Third Straight Year, According to 2014 Global Venture Capital Confidence Survey

August 14, 2014 Comments off

Global Investor Confidence in US Soars for Third Straight Year, According to 2014 Global Venture Capital Confidence Survey
Source: Deloitte

Global investor confidence in the United States significantly increased for the third year in a row, driven by a combination of favorable capital markets, abundant investment opportunities in innovative companies and a strong investor climate, according to the 2014 Global Venture Capital Confidence Survey from Deloitte and the National Venture Capital Association. Moreover, global investor confidence also increased in the United Kingdom, Israel and Canada, but continued to decline in Brazil, China and India, according to the survey.

Survey: lawyers ready to join in major push to spot and report financial fraud targeting older Americans

August 12, 2014 Comments off

Survey: lawyers ready to join in major push to spot and report financial fraud targeting older Americans (PDF)
Source: Investor Protection Trust (IPT), the Investor Protection Institute (IPI), and the American Bar Association (ABA)

Nine out of 10 practicing attorneys surveyed by the Investor Protection Trust (IPT), the Investor Protection Institute (IPI), and the American Bar Association (ABA) are willing to take part in a new campaign to address the estimated 20 percent of older America ns who have been the victims of investment fraud and financial exploitation.

In releasing the survey findings, the three groups announced that they are launching the Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program Legal. The EIFFE Prevention Program Legal will develop, test, and implement a model national continuing legal education (CLE) program to teach lawyers to: (1) recognize clients’ possible vulnerability to EIFFE due to mild cognitive impairment (MCI); (2) identify EIFFE in their clients; and (3) report suspected instances of EIFFE to appropriate authorities. In June 2010, the Investor Protection Trust released a national survey showing that one out five older Americans are victims of financial swindles.

+ Survey Results (PDF)

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