The Senior Executives Group and staff have identified the following high priority items as critical to the agenda set forth by the SEG earlier this year. The SEG and The Bond Market Association will continue to work in cooperation on the following matters.
Regulatory and Legislative Initiatives:
1) Buyside Best Execution
The SEG and the Association will discuss strategy plans relating to proposed best execution regulation and its effects on asset management and broker/dealer firms.
2) SEC Mark-up Proposal
The SEG will continue to hear from senior level sellside traders that the mark-up proposal is important because its strictures could affect liquidity in various fixed-income markets. The SEG plans to offer its insights and offer its support of the industry's position.
3) SEG's SAS 70 Initiative
In working to develop SAS 70 best practices, the SEG will host a simultaneous East and West Coast Lunch & Learn event in June.
4) Status of SEC Mutual Fund Rules and Soft Dollar Research
Through coordination with The Bond Market Association's Washington D.C. office, the SEG will be kept up-to-date on regulatory developments on new mutual fund rules and soft dollar research.
5) Basel II and Sarbanes-Oxley
As asset management firms work to meet their capital compliance obligations and financial reporting requirements in accordance with Basel II and Sarbanes-Oxley, the SEG will provide education on reducing counterparty and operational risk.
6) Monitoring SEC's Recent Pronouncement Regarding Consultants and Investment Managers
The SEG will continue to monitor the SEC's recent pronouncement regarding consultants and investment managers and report on salient developments through its Weekly Reports.
7) Status of Relevant Congressional Proposals or Activities Affecting Derivatives
In leveraging The Bond Market Association's resources, the SEG would be apprised of developments relating to any legislative proposals or other activities that could affect derivatives, including legislation relating to Government Sponsored Enterprises.
Industry-Sponsored Market Practices Initiatives:
1) 30 year Treasury Survey and Comment Letter
The SEG and The Bond Market Association are currently conducting a survey of investors to better quantify the nature of investor demand for 30-year U.S. Treasury bonds. The SEG and the Association are forming a joint 30-Year Treasury Bond Task Force which will be studying the benefits associated with a resumption of the 30-year bond.
2) Swaps Best Practices
The SEG will serve as an advisor to the AMF, dealers and custodians on the implementation of the anticipated AMF Swaps Best Practices Recommendations.
3) BMA's Technology Committee Focus Group/Trading Practices in Plain English (FIX Initiative)
Working with The Bond Market Association Technology Committee, the SEG will join in industry initiatives that are aimed at improving electronic communication between and among relevant market participants through the use of standard protocols.
4) Industry-wide Business Continuity Planning Developments Affecting Asset Managers
The SEG, which follows the work of Association's Business Continuity Management Council, will participate in industry efforts to enhance the resiliency of financial services firms and securities markets in the event of an emergency situation.
5) Advice to the AMF Concerning Loan Syndication Processing Best Practices
As a possible follow-up to AMF Bank Loan Workshop, the SEG and AMF will examine the need for operational best practices in the syndicated loan market.
6) Development of CUSIP Numbering System Applicable to Swaps
In a joint effort between the AMF and Standard & Poor's, the SEG will oversee the development of common identifiers for swaps to help automate the trading and processing of OTC derivatives.
SEG Administrative/Management Items:
1) Update on the Senior Executives Group the Group's Advocacy, Market Practices, Education and Constituency Outreach Components
The leadership and staff of SEG will provide comprehensive updates, such as these, on the Group's advocacy, market practices, education and constituency outreach components to The Bond Market Association and relevant parities.
2) Develop Special Edition of Institutional Investor Concerning SEG's Advocacy and Market Practices Initiatives
In providing insights on asset management issues the SEG has been invited by Institutional Investor to produce a special edition on the Group's work and goals within the industry.
3) Dealers Advisory Committee
To ensure connectivity with the sellside on industry issues, the SEG will work with its Dealers Advisory Committee, composed of members of The Bond Market Association.
4) AMF/SEG Golf Outing on July 25th
The AMF/SEG Golf Outing will provide a valuable networking opportunity for senior executives to get to know each other better and help build business relationships, which will constitute the basis for forging agreement on regulatory and legislative policies.
5) Visits with Members and Prospective Members
SEG Chairman John Gidman and SEG Executive Director Joseph Sack will continue to meet with current and prospective members of the SEG to discuss the items listed above and to solicit additional ideas and insights.
6) Schedule Meeting of Ad Hoc SEG Committee to Delineate Conversion to Division Status
The leadership of the SEG will have meetings to discuss the Group's plan to become a full Division of The Bond Market Association.