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FINRA Is Considering A Rule That Would Require Brokerages To Carry Arbitration Insurance (The Wall Street Journal)
The Financial Industry Regulatory Authority (FINRA) is mulling requiring brokerage firms to have insurance to cover payments awarded to clients in the event of an arbitration. 11% or $US51 million of arbitration awards that were granted in 2011 still haven’t been paid. This is up from 4% in 2010. Susan Axelrod, Finra’s executive vice president of regulatory operations told the WSJ that the self-regulator is aware of “frustration” over awards that aren’t paid out.
Advisor Confidence Stays Flat In September (WealthManagement.com)
The WealthManagement.com Advisor Confidence Index (ACI), a gauge of advisors’ views on the economy and the prospects for the markets over the next six and twelve months, was pretty much flat in September coming in at 111.96. This is despite the budget impasse over Obamacare that has led to a partial government shutdown. Some advisors also thought the Fed’s decision to delay tapering its bond buying program will also “give a false lift to markets” especially now that that Larry Summers has dropped out of the race for Fed chair.
Merrill Team With Over $US900 Million In Client Assets Joins Janney (Investment News)
A team of Bank of America Merrill Lynch advisers who manage over $US900 million in client assets have joined Janney Montgomery Scott LLC at their West Harford, Connecticut office. The team has an annual production of $US3.7 million, reports Investment News. The team consists of four advisors Robert Black, Ned Manuel, Ed Blumenthal, and Bob Borkowski. Account executive Malcolm Berman and three assistants have joined them too.
JP Morgan’s Tom Lee has a year-end S&P 500 target of 1,775. While Lee thinks the economic backdrop is better now than it was in 2011, when Congress was last debating the debt ceiling, he does think a debt ceiling accident poses a risk to his positive view.
We believe the risk of a U.S. debt default is not high enough at the moment to justify selling — but to be clear, a debt default would have serious negative consequences to our positive thesis on equities were it to occur,” says Lee. “As we noted earlier in the week, equity markets have shown decent performance once a shutdown begins. The greater risk, obviously, is of a potential debt default. As we noted above, this does not yet appear to be a material concern of the debt markets (as evidenced by CDS spreads) and we believe both political parties have enormous interest in avoiding this outcome as well.”
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