WASHINGTON—Securities and Exchange Commission Chairman Mary Jo White defended the agency’s process of granting banks reprieves from business restrictions following securities fraud settlements, saying the firms have not become “too big to bar.” Ms. White, speaking at Georgetown University, waded into a long-simmering debate among the SEC’s five commissioners over so-called waivers, which allow financial firms and other businesses to continue certain activities—like selling stakes in hedge funds—despite being automatically barred from such activities when they settle enforcement cases with U.S. authorities. More in the Wall Street Journal [...]

Mutual fund companies, including No. 2 Fidelity Investments, have slashed fees on their most popular funds by shifting billions of dollars into collective trusts not regulated by the U.S. Securities and Exchange Commission. The growing shift to collective trusts could prove a weapon for actively managed mutual funds losing out to low cost passive investment products such as the exchange-traded funds offered by rivals such as Vanguard Group, the biggest mutual fund company. For investors, one drawback is less transparency about the risks and performances of their holdings. “CITs are more opaque to the outside world because reporting requirements are not as stringent,” said Michael Rawson, manager of research at Morningstar Inc. More on Reuters [...]

The U.S. Securities and Exchange Commission may strip Vanguard Group, BlackRock Inc and State Street Corp, the oldest and biggest providers of exchange-traded funds, of an advantage they hold over newer rivals in how they assemble the shares of their funds, said sources familiar with the SEC. ETFs are typically funds whose holdings are meant to mimic the performance of an index. To do that, the SEC has said the securities used to create shares in most funds must be the same ones as in the fund’s portfolio unless there was a change in the index the fund tracks. But BlackRock, Vanguard and a few others, who were among the first to apply with the SEC to create ETFs, are allowed greater leeway: if they need a difficult-to-find security to create shares of their funds, they are permitted to use a similar security – not necessarily the same one – in the fund. This greater flexibility makes it easier and cheaper to run the older funds, and harder for newer entrants into the market such as Northern Trust, Van Eck Global and Charles Schwab Corp to compete. More on International Business Times [...]

The Securities Exchange Commission on Thursday restricted the ability of financial industry veterans to judge investor arbitration cases against brokerage firms, pleasing investors who claimed they injected pro-industry bias into the process. The rule change, proposed by the Financial Industry Regulatory Authority (FINRA), an industry-funded group tasked by Congress to oversee securities firms, is one of the most significant changes to Wall Street’s system for resolving disputes between investors and brokerages in years, lawyers said. More on Reuters [...]

The Securities and Exchange Commission is probing whether companies are muzzling corporate whistleblowers. In recent weeks the agency has sent letters to a number of companies asking for years of nondisclosure agreements, employment contracts and other documents, according to people familiar with the matter and an agency letter viewed by The Wall Street Journal. The inquiries come as SEC officials have expressed concern about a possible corporate backlash against whistleblowers. More in the Wall Street Journal [...]

Two members of the U.S. Securities and Exchange Commission blasted the agency’s decision to spare Oppenheimer Holdings Inc. from additional sanctions related to a recent settlement, saying regulators were turning a “blind eye” to the investment bank’s pattern of misconduct. SEC Commissioners Luis Aguilar and Kara Stein, both Democrats, said they opposed a waiver of a penalty that would have barred Oppenheimer from raising money for private firms and hedge funds after the company admitted last week to improperly selling billions of shares of penny stocks. More on Bloomberg [...]

Officials at the Securities and Exchange Commission have said they discovered numerous problems when examining private equity firms during a two-year review that ended recently. Now, a specialized group of examiners is set to train its focus on hedge funds and other funds that invest in illiquid products like real estate, timber and energy assets, an S.E.C. official said on Thursday. These new examinations will be more limited in scope than the examinations of private equity firms, taking a “thematic and systematic” approach, said the official, Igor Rozenblit, who leads the agency’s private funds unit. That unit, part of the agency’s office of compliance inspections and examinations, will conduct the new exams. More in the New York Times [...]

WASHINGTON—U.S. securities regulators are inching closer to completing postcrisis rules designed to bring more sunlight to the multitrillion-dollar swaps market. The Securities and Exchange Commission voted 3-2 Wednesday to complete a package of rules establishing data hubs to collect and store information on swaps trades for the portion of the market overseen by the agency. The data hubs are seen as crucial for monitoring potential risks in the swaps market. The agency also voted 3-2 to approve a framework of standards for the public reporting of the swaps transactions. More in the Wall Street Journal [...]

U.S. regulators are poised to approve rules today that will require most swaps trades to be reported to the public, a response to lax derivatives oversight in the run-up to the financial crisis. The rules up for a vote at the Securities and Exchange Commission will specify what information has to be reported publicly as well as data intended for regulators who surveil the market. The regulations are the latest step in efforts by the SEC and Commodity Futures Trading Commission to increase transparency in the $691 trillion swaps market. The SEC’s rules come more than six years after the collapse of Lehman Brothers Holdings Inc. and government rescue of American International Group Inc. (AIG) that was rooted in part in unregulated swaps. By creating a record of swaps trades, regulators aim to monitor for systemic risk while giving investors a better idea of fair prices. More on Bloomberg [...]

WASHINGTON (MarketWatch) — The Securities and Exchange Commission is blocking Nobel Prize-winning economist Joseph Stiglitz from joining a panel advising regulators on high-frequency trading and dark pools, Bloomberg reported on Monday. Stiglitz is a high-profile critic of high-frequency trading (HFT), and his supporters are concerned the SEC panel won’t have enough critical voices. On the other hand, IEX Corp. Chief Executive Officer Brad Katsuyama, one of the most prominent opponents of HFT, is expected to be named to the group, Bloomberg said, citing unnamed sources familiar with the matter. More on MarketWatch [...]