January 2012

CFA Institute Asset Manager Code: Coming to an RFP Near You

Bob Dannhauser, CFA

One consequence of recent well-publicized frauds targeting even the most sophisticated of investors (think Madoff, Stanford, et al) is a sharper focus on investor due diligence review of asset managers. The old “Three Ps” (people, process, performance) have given way to increasingly expansive investigations of investment capabilities and the character of firms’ principals.

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Special Accounting for Banks Not Beneficial for Investors

Vincent Papa, PhD, CFA

In a recent Reuters article, the Bank of England’s Andrew Haldane called for a “radical rethink” of accounting rules for banks. While it’s true that banks (especially large ones) pose a significantly greater systemic risk than other industries, Vincent Papa, CFA, finds it hard to see how new bank accounting rules would benefit investors. Read more

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From MiFID to UCITS: Overhauling Europe’s Securities Markets

European Union flag

While the Dodd-Frank industry overhaul remains largely stalled in the U.S., Europe’s financial services sector continues to steam ahead with a wide range of regulatory reforms that will significantly reshape the competitive landscape for European asset managers. None is more important than the review of the Markets in Financial Instruments Directive, or MiFID II.

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Volcker Rule: Let’s Make Paul Proud

The original Volcker vision was actually quite simple and straightforward: eliminate, or otherwise segregate, the risks posed by proprietary trading from the large conglomerate banks that nearly toppled the financial system in 2008. Unfortunately the resulting 300 pages of regulatory hieroglyphics that now pass for the rule proposal likely have its benefactor squirming at any association. Read more

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Excess Cash on the Balance Sheet? Globally, Investors Trust Corporations to Keep It, with a Few Exceptions

Matt Orsagh, CFA, CIPM

In a recent survey, CFA Institute asked our members what companies should do with excess cash held on their corporate balance sheets. We asked if they preferred that corporations retain their cash to make investments or self-fund corporate activities, or return the cash to shareowners through an increase in dividends, a special dividend, or a share buyback. We offered a noncommittal other option for the indecisive. The answers were illuminating, pointing to economic and perhaps cultural differences among respondents in markets around the world. Read more

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