Reform

If you were directed here from a link on a White House or  Change.org Petition know that this info will be updated frequently. Copy & paste if you want to save various versions.

There are well over 50,0001 Hedge Funds, CTA’s, RIA’s, etc., alone not to mention the many additional thousands of family offices and proprietary traders and the myriad of in house investment managers for all the public and private companies. If even 1 out of 5 of every one of those entities hired – ON AVERAGE – even 1 additional person to trade, deal with, watch, specialize in, etc. the newfound ability to trade foreign equity and index options it would add conservatively at least 10,000 jobs to the U.S. economy! This figure doesn’t even include the extra staff that will be needed at exchanges, FCM’s, brokers, etc., and additionally the incremental business for accountants and attorneys. The additional wealth that can be created or preserved is another benefit to our economy that is currently incalculable (an “all-in” optimistic estimate may range as high as 50,000-100,000 jobs!).

It’s inconsistent (not to mention a bit backward and perhaps archaic) that there is near complete reciprocity between, e.g., our FAA and the German version of it (Civil Aviation Authority or “LBA”) and our government apparently trusts the Germans to keep US citizens safe in German airspace and at German airports but there is NO RECIPROCITY between our SEC and with Germany’s version of it (Federal Financial Supervisory Authority) – or even with the European ones for that matter (European Securities Commission – “ESC” – or the Committee of European Securities Regulators – “CESR”) – and our government’s position is that “those darn carless, reckless, negligent, and incompetent Germans or Europeans just can’t keep our US investors safe”. (Germany in particular & Europe in general are mere examples. Same is true for NUMEROUS other countries).

Note that there is near complete reciprocity between our CFTC and Germany’s version of it (as well as with numerous other countries in regards to Futures or Futures Options) and our CFTC is LEAP YEARS AHEAD of the SEC in terms of bilateral reciprocity agreements with countries that are SUPPOSEDLY our friends, allies, and partners: http://www.cftc.gov/idc/groups/public/@internationalaffairs/documents/file/cftc-bafin-bundesbank-clearing.pdf

I’ve already started seeking input from all types of industry participants on that topic from exchanges (e.g. CME, ICE, etc.), to FCM’s, brokers, RIA’s, CTA’s, Family Offices, traders, etc. I’m proceeding on with the assumption that most investors would like to see that prohibition be repealed or at least would not be opposed to it. I realize that many of the $100M+ participants (QIB’s, etc.) might not want the added competition. Your input would be invaluable.

I hope there would be bipartisan support as this seems EXACTLY like the type of thing President Trump AND House Democrats (& Republicans) would want to champion not only to level the playing field for “the little guy” (i.e. individual investors and entities with less than $100M in assets – in some cases only either $25M or $10M is required) vis-a-vis the “big money interests” (i.e. QIB’s and offshore institutional investors) but even more so for ALL Americans vis-a-vis all the other investors from the rest of the world as we, i.e. ALL Americans, are at a distinct disadvantage as foreigners can trade here or there and we can only trade here. If one did not know better it’s almost more like we are allowing foreign governments to keep our citizens from competing in THEIR markets (if it weren’t so sadly true that it was actually our government preventing our citizens from competing THERE).

My simple question is: Can it could be achieved thru any, two, or all of the following:

    1. unilateral SEC change of regulation,
    2. a Presidential executive order,
    3. or only via an act of Congress

AND what needs to be coordinated with the CFTC if it does get done?

Note that there are many stakeholders but the ones most closely involved from our governments perspective are the White House Council of Economic Advisors, the SEC, the CFTC, the House Finacial Services Committee Subcommittee on Capital Markets and Government Sponsored Enterprises, the Senate Banking Committee Subcommittee on Securities, Insurance, and Investment, and the Senate Agricultural Committee Subcommittee on Commodities, Risk Management, and Trade (this last one would be involved – if at all or perhaps if from a legislative or practical matter index options get in some way recharacterized in such a way as to be treated similarly as futures contracts – more on the back end as Futures Contracts are under its purview). Additionally, other stakeholders would most likely necessarily emerge after such a change went into effect, such as perhaps the OCC (Options Clearing Corporation), e.g. depending on the characterization of instruments post change. I’d envision equity options going under OCC and index options going under CFTC but my crystal ball is not perfect.

Update 8/31/17:

Since January 14, 2017 I’ve literally made contact with the offices of EVERY SINGLE MEMBER of the House Financial Services Committee and have now spoken PERSONALLY AND FACE TO FACE with Chairman Jeb Hensarling – on 8/9/17 and 8/30/17. After FINALLY speaking to him I am now confident that I at least have gotten the best information in front of the most appropriate person in our government that can help with this.

Continued:

I also previously contact 2 SEC attorney’s as well as the office of Jay Clayton and thus far and still no clear answer. In fact since I began this on Jan. 14th only one staffer has even replied to me and only one other has agreed to even read this info. One SEC attorney has been extremely helpful and is very interested in helping. The two world renown experts in this area suggested approaching this so as to be inclusive to the SEC and try to not have the change shoved down their throats. The more flies with honey approach. I’m assuming if it’s not done by the time President Trump gets around to it and thinks it is a high enough priority, after all his other higher priority initiatives are done, to tweet and twist some arms and light some fires under some asses about it that I will already have it done as my present to him, the country, and the American people. If so, I would certainly consider it as the  apotheosis of my career in the option space!
Hope to learn as I go. Any advice or assistance would be welcome.

Some explanatory/helpful links:

http://www.cftc.gov/International/ForeignMarketsandProducts/foreignproducts

Click HERE for a WORD DOCUMENT with a more detailed explanation/example taking in all info and presenting it in a better format. The file will be continually updated with no need to change the link (if you bookmark it).

NEAR COMPLETE LIST OF WHAT THE U.S. GOVERNMET SAYS THAT YOU, AS AN AMERICAN, ARE NOT WORTHY TO TRADE (UNLESS OF COURSE YOU HAVE OVER $100 MILLION DLLARS!!!):

https://www.dropbox.com/s/20fxyiv5feyhzyg/US%20GOVERNEMNT%20SAYS%20U%20CANNOT%20TRADE%20ANY%20OF%20THESE.docx?dl=0

Or Click HERE

More Detailed List:

https://www.dropbox.com/s/ndzvqxluggql6rf/Complete%20List%20of%20What%20Americans%20CANNOT%20Trade%20SEC%20SUX.xlsx?dl=0

DON’T KNOW ABOUT YOU BUT I FEEL LIKE MY RIGHTS ARE BEING TRAMPLED UPON BEING TOLD I CAN’T MANAGE MY RISK (OR SPECULATE) HOW I BEST SEE FIT AND CAN’T HELP RESENT THE FACT THAT THOUSANDS OF FOREIGNERS TRADE THESE PRODUCTS THROUGH U.S. BASED FCM’s/BROKERS EVERY SINGLE DAY!!! THAT’S AN ABSOLUTELY DISGUSTING DISGRACE AND TOTAL ABUSE OF SEC/GOVERNMENT POWER!!!!!

List of those government employees who have NOT been helpful OR have been actually obstructionist to this initiative will be posted shorty!

1There are more than 10,000 hedge funds. By some estimates, there are as many as 15,000 hedge funds. Speaking at the Milken Global Institute Conference, Steve Cohen, who runs $11 billion family office Point72 Asset Management (formerly SAC Capital), said there are “too many players.”May 7, 2016. According to Meridian-IQ, the total number of registered investment adviser (RIA) firms grew by approximately 3.1% in the 12 month period ending in May 2015. As of May 2015, Meridian-IQ estimates that there are 32,736 RIA firms actively registered compared to 31,739 firms in May 2014 (a net increase of 997 firms).Aug 12, 2015. There are over 2,000 registered commodity trading advisors (CTAs) with the National Futures Association. There is a frequently quoted estimate of between 3000 and 5000 single family offices (SFO) in the United States. I haven’t even included an estimate for ETF’s, Mutual Funds, Corporate Investment Departments, etc. No doubt 50,000 is an absurdly conservative UNDERESTIMATE of the number of entities affected to the point they MIGHT hire additional staff.

Additional and increasingly thorough and detailed information will regularly be added to this post.

Please help support my PRO-DERIVATIVES AGENDA Congressional Run:

http://www.barone4congress2018.com

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