Author Topic: Get Ready for Regulators to Peer Into Your Portfolio  (Read 478 times)

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Online flowers

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Get Ready for Regulators to Peer Into Your Portfolio
« on: May 04, 2014, 12:45:57 PM »
http://blogs.wsj.com/moneybeat/2014/05/02/get-ready-for-regulators-to-peer-into-your-portfolio/?mod=WSJ_hppMIDDLENexttoWhatsNewsSecond

Quote
Bad brokers, meet RoboRegulator.

In December, the Financial Industry Regulatory Authority, which oversees how investments are sold, proposed what it calls Cards, an electronic system that would regularly collect data on balances and transactions in brokerage accounts.

If adopted, Cards would revolutionize how regulators do their jobs and could make it harder for unscrupulous brokers to bilk customers.

But some critics think it could endanger the privacy and security of investors’ confidential data. And the proposal ups the ante for Finra, which often has been criticized for letting wrongdoers slip through the cracks.

Under Cards (which stands for Comprehensive Automated Risk Data System), Finra would collect—probably weekly—a record of activity at all of the more than 4,100 brokerage firms nationwide.

Finra would scour the data continuously, looking for any hints that a firm or a broker might be taking advantage of a client: excessive trading or commissions, switching from one mutual fund to another, overcharging for bond E*TradeETFC +0.04%s, overconcentrating in risky or illiquid securities, and so on.

Cards “would provide us with a treasure trove of information and the ability to focus quicker on firms that are placing investors at high risk,” Richard Ketchum, Finra’s chairman and chief executive, said in an interview.


Online EC

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Re: Get Ready for Regulators to Peer Into Your Portfolio
« Reply #1 on: May 04, 2014, 03:20:38 PM »
This is one of those "6 of one, half a dozen of the other" things.

Balancing oversight with over-reach.
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Online Oceander

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Re: Get Ready for Regulators to Peer Into Your Portfolio
« Reply #2 on: May 05, 2014, 01:07:39 PM »
... and a very good way to get immediate access to information about most peoples' financial wealth; and knowledge is, as they say, power.  Here's the catch-phrase, FINRA wants to focus on "firms that are placing investors at high risk..."  What does that mean?  If a broker invests my retirement funds in growth stocks instead of income stocks, is he putting me at high risk because of the added risks of growth stocks?  Will every investment other than investment-grade bonds be considered "high risk" because of the volatility of the stock markets?


Here's how this could play out:  FINRA monitors for a while and then concludes that there is too much "high risk" in how retail accounts are traded overall, and then commands that all such accounts be placed only in government-approved investments; of course, mirabile dictu, the list of approved investments will include US debt.

And when that doesn't work out because FINRA manages to "find" that there's still too much "high risk," all retail investment portfolios will be presumed to be for retirement purposes and will be seized by the government and replaced with social security defined benefit arrangements.
« Last Edit: May 05, 2014, 01:14:30 PM by Oceander »

Online EC

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Re: Get Ready for Regulators to Peer Into Your Portfolio
« Reply #3 on: May 05, 2014, 05:08:49 PM »
Damn - that were cynical. Not saying it's inaccurate though
The fastest way to a man's heart? Inch to the right of the breastbone, between the fourth and fifth rib.

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Online truth_seeker

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Re: Get Ready for Regulators to Peer Into Your Portfolio
« Reply #4 on: May 05, 2014, 05:58:21 PM »
Any "system" build by and for government is most likely going to be packed full of mistakes, not to mention fraud and misapplications downstream.

Think Obamacare. Or what they have done in a short time to screw up medical care, insurance and costs--they can do to other industries, too.

Add to the insured numbers, with $2500 annual savings per household?  How about the opposite?

Any experience with military, defense and aerospace procurement? $150 hammers?



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Re: Get Ready for Regulators to Peer Into Your Portfolio
« Reply #5 on: May 05, 2014, 06:14:44 PM »
Damn - that were cynical. Not saying it's inaccurate though

See Argentina.  At this point it's merely realistic.

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Re: Get Ready for Regulators to Peer Into Your Portfolio
« Reply #6 on: May 05, 2014, 08:09:57 PM »
Any experience with military, defense and aerospace procurement? $150 hammers?

Never did procurement - other than the "creative" kind. As in outright stealing what we needed to do the job. If it's a choice between filling out a ream of paper and waiting for 4 weeks or hitting the armory that can be unlocked with a bent pin and a few curses, I'll take the second every time!  :tongue2:
The fastest way to a man's heart? Inch to the right of the breastbone, between the fourth and fifth rib.

Every time I start to feel boring, I remember there is a monthly magazine devoted to elevators.

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I've got a website now: Smoke and Ink

Offline PzLdr

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Re: Get Ready for Regulators to Peer Into Your Portfolio
« Reply #7 on: May 14, 2014, 12:10:14 PM »
Damn! I need new glasses! I thought the title read "Get ready for Regulators to PEE into your Portfolio". On second thought, we may both be right.  :beer:
Hillary's Self-announced Qualifications: She Stood Up To Putin...She Sits to Pee


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