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CRS — Dark Pools in Equity Trading: Policy Concerns and Recent Developments (September 26, 2014)

October 1, 2014 Comments off

Dark Pools in Equity Trading: Policy Concerns and Recent Developments (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The term “dark pools” generally refers to electronic stock trading platforms in which pre-trade bids and offers are not published and price information about the trade is only made public after the trade has been executed. This differs from trading in so-called “lit” venues, such as traditional stock exchanges, which provide pre-trade bids and offers publicly into the consolidated quote stream widely used to price stocks.

Dark pools arose partly due to demand from institutional investors seeking to buy or sell big blocks of shares without sparking large price movements. The volume of trading on dark pools has climbed significantly in recent years, from about 4% of overall trading volume in 2008 to about 15% in 2013. While dark pools reportedly have lower trading fees, their lack of price transparency has sparked concerns about the continued accuracy of consolidated stock price information. In addition, fairness concerns have surfaced in recent regulatory and enforcement actions, in the press, and in Michael Lewis’s book Flash Boys over allegations that dark pool operators may have facilitated front-running of large institutional investors by high-frequency traders, in exchange for payment, and misrepresented the nature of high-frequency trading in the dark pools.

This report examines the confluence of factors that led to the rise of dark pools; the potential benefits and costs of such trading; some regulatory and congressional concerns over dark pools; recent regulatory developments by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), which oversees broker-dealers; and some recent lawsuits and enforcement actions garnering significant media attention.

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CRS — Proposed Train and Equip Authorities for Syria: In Brief (September 16, 2014)

October 1, 2014 Comments off

Proposed Train and Equip Authorities for Syria: In Brief (PDF)
Source: Congressional Research Service (via U.S. State Department Foreign Press Center)

The President’s requests for authority and funding for the Department of Defense to provide overt assistance, including possible military training and weapons, to vetted members of the Syrian opposition and other vetted Syrians for select purposes are the subject of close congressional consideration. This report introduces these proposals and the analysis and table below explore similarities and differences among some of these proposals.

CRS — Unaccompanied Alien Children: Demographics in Brief (September 24, 2014)

October 1, 2014 Comments off

Unaccompanied Alien Children: Demographics in Brief (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The number of children coming to the United States who are not accompanied by parents or legal guardians and who lack proper immigration documents has raised complex and competing sets of humanitarian concerns and immigration control issues. This report focuses on the demographics of unaccompanied alien children while they are in removal proceedings. Overwhelmingly, the children are coming from El Salvador, Guatemala, and Honduras. The median age of unaccompanied children has decreased from 17 years in FY2011 to 16 years during the first seven months of FY2014. A greater share of males than females are represented among this population. However, females have steadily increased in total numbers and as a percentage of the flow since FY2011. The median age of females has dropped from 17 years in FY2011—the year that was the median age across all groups of children—to 15 years in the first seven months of FY2014.

CRS — May States and Localities Hold Aliens Pursuant to Immigration Detainers?, Legal Sidebar (September 22, 2014)

October 1, 2014 Comments off

May States and Localities Hold Aliens Pursuant to Immigration Detainers?, Legal Sidebar (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

As previous Sidebar postings have noted, there have long been questions as to whether states and localities must comply with immigration detainers issued by U.S. Immigration and Customs Enforcement (ICE) requesting that they briefly detain persons whom they would otherwise release from their custody so that ICE may assume custody. However, in the wake of recent court decisions, that question would seem to have been replaced by a new question: may states and localities hold persons whom they would otherwise release from their custody upon receiving an immigration detainer from ICE asking them to do so?

The preliminary answer—based upon two recent federal district court decisions—would seem to be that states and localities run afoul of the Fourth Amendment if they hold an alien whom they would otherwise have released so that ICE may investigate whether the alien is removable. However, these decisions do not purport to address all uses of immigration detainers, and courts in other jurisdictions, or on appeal, could potentially reach alternate conclusions, perhaps based upon provisions of federal law that authorize ICE to make warrantless arrests under certain circumstances of aliens believed to be unlawfully present.

CRS — The No Fly List: Procedural Due Process and Hurdles to Litigation (September 18, 2014)

October 1, 2014 Comments off

The No Fly List: Procedural Due Process and Hurdles to Litigation (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

In order to protect national security, the government maintains various terrorist watchlists, including the “No Fly” list, which contains the names of individuals to be denied boarding on commercial airline flights. Travelers on the No Fly list are not permitted to board an American airline or any flight on a foreign air carrier that lands or departs from U.S. territory or flies over U.S. airspace. Some persons have claimed that their alleged placement on the list was the result of an erroneous determination by the government that they posed a national security threat. In some cases, it has been reported that persons have been prevented from boarding an aircraft because they were mistakenly believed to be on the No Fly list, sometimes on account of having a name similar to another person who was actually on the list. As a result, various legal challenges to placement on the list have been brought in court.

The “Khorasan Group” in Syria, CRS Insights (September 24, 2014)

October 1, 2014 Comments off

The “Khorasan Group” in Syria, CRS Insights (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

On September 22, U.S. military forces launched strikes against Syria-based terrorists referred to by U.S. officials as the “Khorasan Group,” whose members President Obama has described as “seasoned Al Qaeda operatives in Syria.” According to Deputy National Security Advisor Ben Rhodes, the group “includes some former al Qaeda operatives, core al Qaeda operatives from Afghanistan and Pakistan [a region historically known as Khorasan] who made their way to Syria.” Rhodes added that the Administration views the Khorasan Group as “an extension of the threat posed by al Qaeda and their associated forces. These are individuals who have their origin, their history serving in al Qaeda.” Other U.S. officials and independent observers report that the group’s members may hold leadership roles in the Al Qaeda-affiliated Syrian insurgent organization known as Jabhat al Nusra (the Support Front), which the United States has designated as a Foreign Terrorist Organization (FTO). Former CIA Deputy Director Mike Morell has described the “Khorasan Group” as “the external operations arm” of Jabhat al Nusra, saying its members “came from Pakistan” and “focus on attacks in the West.” Despite this reported affiliation, some observers believe the approximately 50 to 100 members of the “Khorasan Group” focus primarily on planning international terrorist acts, rather than aiding Jabhat al Nusra’s efforts to topple the Asad regime.

CRS — Insurance Regulation: Issues, Background, and Legislation in the 113th Congress (September 17, 2014)

October 1, 2014 Comments off

Insurance Regulation: Issues, Background, and Legislation in the 113th Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The individual states have been the primary regulators of insurance since 1868. Following the 1945 McCarran-Ferguson Act, this system has operated with the explicit blessing of Congress, but has also been subject to periodic scrutiny and suggestions that the time may have come for Congress to reclaim the regulatory authority that it granted to the states. In the late 1980s and early 1990s, congressional scrutiny was largely driven by the increasing complexities of the insurance business and concern over whether the states were up to the task of ensuring consumer protections, particularly insurer solvency.

The recent financial crisis refocused the debate surrounding insurance regulatory reform. Unlike many financial crises in the past, insurers played a large role in this crisis. In particular, the failure of the large insurer American International Group (AIG) spotlighted sources of risk that had gone unrecognized. The need for a systemic risk regulator for the entire financial system was a common thread in many of the post-crisis financial regulatory reform proposals. The Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203), enacted following the crisis, gave enhanced systemic risk regulatory authority to the Federal Reserve and to a new Financial Services Oversight Council (FSOC), including some oversight authority over insurers. The Dodd- Frank Act also included measures affecting the states’ oversight of surplus lines insurance and reinsurance and the creation of a new Federal Insurance Office (FIO) within the Treasury Department.

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