SPECIAL EDITION of the WEEKLY REPORT:
The Weekly Report has been published every Friday since February 2004. We appreciate your interest in the Weekly Report as expressed by the ever-increasing size of our readership.
This particular special edition marks the end of Weekly Reports of the "Asset Managers Division." Next Friday will begin the Weekly Reports of the "Asset Management Group." John R. Gidman of Loomis Sayles and Company and David L. Murphy of Fidelity Investments will serve as Chair and Vice Chair, respectively, of the 2007 Asset Management Group. This Group will be part of the new Securities Industry and Financial Markets Association ("SIFMA").
The following information is intended to provide members of both the Asset Management Group (formerly AMD) and The Asset Managers Forum with a comprehensive update concerning the status of advocacy initiatives designed to foster buy side goals. Any questions that you might have would, of course, be most welcome. As you will note, the following information is dated as of November 8, 2006. This is being done to remind readers that the well-publicized TBMA/SIA merger will be launched on November 8th.
SECURITIES INDUSTRY AND FINANCIAL MARKETS ASSOCIATION
ASSET MANAGEMENT GROUP ("AMG") / CURRENT MAJOR INITIATIVES
BEST EXECUTION - Steering Committee members' collective comments on best execution (developed at a meeting on 10/18/06) are being incorporated into AMG's draft policy statement. Subject to industry input and the approval of both the AMG's Market Practices and Standards Subcommittee and the Board of Directors of the Securities Industry and Financial Markets Association ("SIFMA"), distribution of a proposed buy side best execution statement is expected in the first quarter of 2007.
DERIVATIVES - Buy side members' input on the Street's equity derivatives processing goals is currently being provided to the Group of 14. AMG intends to work with ISDA, MFA and other areas of SIFMA to help standardize terms used in equity derivatives confirmation documents. Equally important, AMG continues in its role as spokesperson for the traditional buy side industry on policy matters relating to over-the-counter derivatives.
CEO ROUNDTABLE - Staff is making plans to structure, schedule and implement the initial buy side CEOs peer group roundtable meeting, subject to the guidance and advice of the Outreach Subcommittee of AMG. In effect, the "business of the business" will be discussed at this CEO Roundtable event to be held in the early part of 2007.
JOHN GIDMAN'S SPEECH ON 11/2/06 - AMG Chair John Gidman will be the featured speaker on November 2, 2006, at the Fixed-Income Securities Operations Conference in Miami, Florida. Mr. Gidman will contiue to ask for buy side/sell side collaboration regarding industry-wide operations initiatives.
"FAILS" MANAGEMENT - In light of member demand, staff is organizing a new buy side fails management group that will meet bi-weekly to address issues identified at a recent operations workshop sponsored by The Asset Managers Forum ("AMF").
MiFID CALL-IN - AMG will establish an Emerging Issues Subcommittee. A forthcoming event to be sponsored by this group on November 16, 2006 will be a Call-in regarding the MiFID implementation schedule. Registration information regarding this Call-in is forthcoming.
DTCC's ELECTRONIC WAREHOUSE FOR CDS INSTRUMENTS - Regarding industry education concerning processing trends relating to credit default swaps, several members will make a panel presentation on 11/2/06 relating to DTCC's electronic Trade Information Warehouse. Staff will circulate highlights of this presentation to AMG constituents in a forthcoming edition of the Weekly Report.
CROSS TRADING - AMG will coordinate with other trade groups and appropriate regulatory authorities regarding industry procedures in connection with buy side cross trading activities permitted under the Pension Protection Act of 2006.
CORPORATE ACTIONS BEST PRACTICES - The AMF is obtaining comments from market participants regarding its Corporate Actions Best Practices proposal. AMF intends to adopt these Best Practices in final form by mid-2007.
FAS 155 - AMG members intend to provide asset managers' feedback to the American Securitization Forum and the Capital Markets Group of SIFMA regarding FAS 155 implementation concerns.
AVIAN FLU PANDEMIC RESILIENCY - In connection with business continuity as it relates to the possibility of a pandemic, staff of the Association will survey both Asset Management Group members and the major custodians regarding their readiness, if necessary, to work from home or other remote locations. Also, AMG is being requested to identify any relevant buy side regulatory relief questions in the event of a pandemic emergency.
LOAN MARKET DEVELOPMENTS - The AMG Steering Committee is obtaining buy side views regarding the Loan Syndications and Trading Association's recent guidance concerning receipt of confidential information to the extent that asset managers are participants in the corporate loan market. The Steering Commitee will monitor and coordinate this matter with any SIFMA activities.
EDUCATION: CONVERGENCE OF CASH AND DERIVATIVES MARKETS - At the request of the staff leadership of SIFMA, AMG personnel are arranging an off-site meeting with other relevant SIFMA staff to begin planning a comprehensive 2007 securities industry educational initiative that would focus on new developments in the derivative instruments markets, from the standpoint of traditional buy side firms as users, on the one hand, and dealers engaged in the capital markets, on the other hand, during this period of convergence of fixed-income securities and over-the-counter derivatives. This educational initiative would be approved by AMG and other SIFMA members.
MEMBERSHIP/BUDGET - The Outreach Subcommittee of AMG looks forward to engaging SIFMA firms with asset management business components, which also happen to be non-members of the former Asset Managers Division, in the activities of the Asset Management Group.
THE ASSET MANAGERS FORUM - Staff and the industry leadership of AMF are managing the Forum's transition to SIFMA. The major initiatives of AMF (in addition to sponsoring corporate actions best practices, as mentioned above) include 1) developing procedures with mortgage securities dealers to possibly use FICC as a central counterparty, 2) enhancing straight through processing in the fixed-income markets by suggesting proposed changes in industry procedures to enhance standing settlement instructions, 3) educational sessions regarding industry practices designed for regulatory staff members, and 4) member outreach through Quarterly Meetings and AMF's periodic Newsletter. Under SIFMA, the AMF will continue to serve as the buy side's primary spokesperson on operations matters.
"BOND BASICS" COURSES - These educational courses are open to the entire industry and are created, developed and implemented by the AMF Steering Committee and AMG staff. The second in our series of basic one-day instructional courses regarding the fundamental elements of fixed-income securities is scheduled to be held on December 1, 2006, in New York City.
ALTERNATIVE INVESTMENTS - With member assistance, staff is organizing a half day AMF-sponsored symposium in early December, 2006, on the alternative investments business. This event will feature heads of AI from several leading financial services organizations.
HEDGE FUNDS - Steering Committee members and AMG staff continue to engage representatives of hedge funds in appropriate activities of AMG. Most notably, our liaison with hedge funds includes the weekly participation with representatives of Managed Funds Association in meetings of the Group of 14.
AMG's OPERATING PROCEDURES - The leadership of the Steering Committee intends to submit changes in the Operating Procedures of the AMG to top management for consideration and approval by the governing body of SIFMA. These changes, which were formally adopted by the membership on 10/18/06, are designed to achieve a seamless transition by the buy side to the Asset Management Group within SIFMA.
NEXT MEETING OF AMG STEERING COMMITTEE IS 1/23/07-COMPLETE SCHEDULE OF 2007 EVENTS IS FORTHCOMING - In cooperation with the Washington Office and other areas of SIFMA, the leadership of the Group is arranging the details of AMG's January 23rd quarterly meeting which will be held in Washington, D.C. In the near future, staff will provide the buy side membership with the full 2007 schedule of events for both AMF and the Asset Management Group.
NOTE: The combined membership of AMG and AMF includes 46 asset management firms with total assets under management in excess of $14 trillion. For more information about SIFMA's asset management initiatives, interested parties are invited to contact the staff leadership of AMG at 646-637-9200.