A Complex Overreaction....Can You Say Dodd-Frank?
- Stephen Simonis Senior argues that Dodd-Frank is an over-complicated overreaction that has done more harm than good.

In their latest debate, Republican contenders for the American presidency have attacked the Dodd-Frank regulation and have proposed scrapping the law if they take over after Obama's final term ends.
Enacted in 2010, the Dodd-Frank, or ' The Wall Street Reform and Consumer Protection Act' as it is officially called, was a direct response to the financial crisis of 2008 and to the perception that corrupt big banks and unscrupulous hedge funds were to blame. Seems to me to stereotype all banks as corrupt and all hedge funds as unscrupulous, and enacting a law on that notion is a bit over the top.
Many firms, brokers, and professionals that are being forced to comply with the numerous requirements complain that this is an overreaction that complicated Compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others. In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others. Read this Term and increased costs. They also say that there needs to be a better balance in the system and how regulators are punishing the banks with fines for outlandish amounts of money. So vague is some of the Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term that banks have begun to remove the word 'proprietary' completely from the books.
I'm exhausted just talking about it.
Let's take a look at the complexities in Dodd-Frank and the effects of its internal inconsistencies. Experts contest that the complexities and resulting costs will outweigh what good may come from it. The Glass-Steagall Act that transformed the American Financial system was 37 pages wrong.
Dood- Frank is 848 pages long.
Voracious Chinese officials, who pay close attention to regulatory developments, have remarked that the mammoth law, let alone its appended rules, seems to have been fully read by NO ONE outside of Beijing. A finding from the Yale law school stated that Dodd-Frank is an outline directed at bureaucrats instructing them to make still more regulations and create more bureaucracies. That is clearly something no one needs.
Let's take a look at the numbers:
In addition to the 848 pages, 11 pages were dedicated to the 'Volcker Rule' which is intended to reduce the banks ability to take excessive risks by restricting proprietary trading. Four federal agencies charged with enacting this rule put forward a 298 page proposal which is, in the words of a banker publicly supportive of Dodd-Frank, 'unintelligible any way you read it'.
It includes no less than 383 explicit questions for a client which in turn breaks down into 1,420 sub questions. I'm not kidding, these numbers are real. The law firm created a rule map which produced for its client 355 distinct steps to follow. The Commodity Futures Trading Commission then issued its own proposal on prop trading and it was no less that 489 pages long. I'm exhausted just talking about it.
In order to make this blog 846 pages shorter than Dodd-Frank I'll wrap things up. The former head of the FDIC remarked: "I fear the regulation to implement the Volcker rule is extraordinarily complex and tries way too hard." I have always thought Dodd-Frank was a complete overreaction put together by overzealous politicians imposing a complex, long winded piece of legislation that has caused extensive compliance and legal costs, decreased trading profits and caused job losses.
In their latest debate, Republican contenders for the American presidency have attacked the Dodd-Frank regulation and have proposed scrapping the law if they take over after Obama's final term ends.
Enacted in 2010, the Dodd-Frank, or ' The Wall Street Reform and Consumer Protection Act' as it is officially called, was a direct response to the financial crisis of 2008 and to the perception that corrupt big banks and unscrupulous hedge funds were to blame. Seems to me to stereotype all banks as corrupt and all hedge funds as unscrupulous, and enacting a law on that notion is a bit over the top.
Many firms, brokers, and professionals that are being forced to comply with the numerous requirements complain that this is an overreaction that complicated Compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others. In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others. Read this Term and increased costs. They also say that there needs to be a better balance in the system and how regulators are punishing the banks with fines for outlandish amounts of money. So vague is some of the Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term that banks have begun to remove the word 'proprietary' completely from the books.
I'm exhausted just talking about it.
Let's take a look at the complexities in Dodd-Frank and the effects of its internal inconsistencies. Experts contest that the complexities and resulting costs will outweigh what good may come from it. The Glass-Steagall Act that transformed the American Financial system was 37 pages wrong.
Dood- Frank is 848 pages long.
Voracious Chinese officials, who pay close attention to regulatory developments, have remarked that the mammoth law, let alone its appended rules, seems to have been fully read by NO ONE outside of Beijing. A finding from the Yale law school stated that Dodd-Frank is an outline directed at bureaucrats instructing them to make still more regulations and create more bureaucracies. That is clearly something no one needs.
Let's take a look at the numbers:
In addition to the 848 pages, 11 pages were dedicated to the 'Volcker Rule' which is intended to reduce the banks ability to take excessive risks by restricting proprietary trading. Four federal agencies charged with enacting this rule put forward a 298 page proposal which is, in the words of a banker publicly supportive of Dodd-Frank, 'unintelligible any way you read it'.
It includes no less than 383 explicit questions for a client which in turn breaks down into 1,420 sub questions. I'm not kidding, these numbers are real. The law firm created a rule map which produced for its client 355 distinct steps to follow. The Commodity Futures Trading Commission then issued its own proposal on prop trading and it was no less that 489 pages long. I'm exhausted just talking about it.
In order to make this blog 846 pages shorter than Dodd-Frank I'll wrap things up. The former head of the FDIC remarked: "I fear the regulation to implement the Volcker rule is extraordinarily complex and tries way too hard." I have always thought Dodd-Frank was a complete overreaction put together by overzealous politicians imposing a complex, long winded piece of legislation that has caused extensive compliance and legal costs, decreased trading profits and caused job losses.