When the CFTC announced that it was bringing an enforcement action against Mr. Sarao, it . This assertion was unsupported, as . The fact that Mr. Sarao may have done something illegal on the day of the Flash Crash does not demonstrate that his violation caused the Flash Crash. Through the proposed Consent Order, the CFTC asserts that Mr. Sarao engaged in the same type of illegal conduct thousands of times over a long period. This indicates that his conduct on…

The unintended consequence of the accounting change would have been devastating for small broker-dealers, likely driving many of them out of business by forcing them to recognize large liabilities (i.e., the future expenditures under their leases) while affording them no credit for the related assets (the ability to use their leased properties). The no-action letter undoes that unintended consequence. However, a number of related technical matters still need to be resolved, such as how…

It is notable that the New York Fed reduced the capital requirements for primary dealers, while at the same time increasing those requirements for counterparties to foreign exchange transactions. Further, one could question whether reduced capital requirements for primary dealers reflect diminished market interest in operating as a primary dealer.

In the days to come, Cadwalader will follow developments in regulation closely. Topics that we expect to address will include specific proposals, changes in regulatory staffing, actions with respect to Executive Orders, and the status of regulatory proposals that have not been adopted.