Fasten your seatbelts people. Make sure your seat is in the upright position. According to BusinessInsider as the days edges closer to 2012, analysts are clambering over one another to make their forecasts on what might happen to the economy and markets in the next year heard.
#1: Volcker Rule What: Ban on proprietary trading in deposit-taking banks, with exemptions for hedging and market making. Also limits banks’ investment in private funds. Effective July 21, 2012. Impact: Firms will have burden of proving they are in compliance with ban, and the elimination of P and L from proprietary trading...
#2: Over-The-Counter Derivatives What: Central clearing required for all derivatives deemed ‘clearable’ by CFTC and SEC; Exchange trading required for all swaps that are cleared; all swaps to be reported to repositories. Final rule expected by end of 2011, with more additions in 2012. Impact: Bid/ask compression from cleared derivatives being exchange traded; non-cleared trades will need more capital..
#3: High Frequency Trading (SEC) What: Single stock ‘limit up limit down’ mechanism should limit variation in price; proposal for recalibration of thresholds in market-wide circuit breakers. Final rules expected end o 2011 or early 2012. Impact: Limit effects of of extreme price movements and curb market confusion by pausing trading during periods of extraordinary price volatility….
#4: Money Market Funds (SEC) What: Potential introduction of floating net asset value; potential capital requirements. Proposals are expected in early 2012. Impact: Could negatively impact wholesale funding market..
Read more at http://www.businessinsider.com/deutsche-bank-9-regulatory-reforms-that-will-change-the-financial-industry-in-2012-2011-12
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