SEC Commissioner Luis Aguilar made a wide-ranging statement in which he discussed the current state of the municipal securities market and various ways to make it more transparent, liquid and fair. Commissioner Aguilar explained that municipal securities are subject to far less regulation and transparency than other segments of capital markets and, therefore, are "excessively opaque, illiquid, and decentralized." Commissioner Aguilar suggested that the SEC remove various exemptions for municipal securities from certain registration requirements that necessitate reporting components in order to

The Office of Financial Research ("OFR") published a working paper titled "Process Systems Engineering as a Modeling Paradigm for Analyzing Systemic Risk in Financial Networks." The paper proposes a methodology to quantify systemic risk. More specifically, it proposes that signed directed graphs ("SDGs"), modeling methodologies that are used extensively in process systems engineering, can be used to create frameworks that (i) address the cause and effect of financial instability feedback loops and (ii) can automate the identification and monitoring of potential vulnerabilities. More generally

The Board of IOSCO met in Seoul to discuss policy, organizational structure and strategic priorities for 2015. The IOSCO Board outlined its priorities for 2015, which included: implementing margin requirements for non-cleared OTC derivatives; proposing new mandates on secondary bond market liquidity and order routing incentives; creating tools to identify risks and vulnerabilities in market based financing; reviewing updates from the UK Financial Conduct Authority about their fair and effective markets review and opportunities for IOSCO to better understand the role it might play in realizing

The SEC held its first Investor Advisory Committee meeting of 2015. SEC Chair Mary Jo White delivered the opening remarks on developments undertaken by the SEC and issues on which it intends to focus in 2015.

The SEC charged Water Island Capital LLC, an investment adviser to several alternative mutual funds, with maintaining the funds' cash collateral at broker-dealer counterparties instead of at the funds' custodial bank. During an SEC examination of Water Island Capital LLC, the SEC uncovered the firm's failure to ensure that roughly $247 million in cash collateral held by broker-dealer counterparties was maintained with the funds' custodial bank. The cash collateral, which Water Island caused to be posted, related to the funds' investments in certain total return and portfolio return swaps