is problematic. The proposal would establish a regulatory standard that could not possibly be met by anyone regardless of their level of diligence or knowledge. The proposal opens the door for the NYSDF to bring enforcement actions against any bank and any AML compliance officer at any time. Mr. Hammerman may be understating the consequences of this type of regulation for filling senior compliance positions. Put differently, the only individuals who would accept positions as AML…

The problems that Professor Pirrong points out with respect to positions held at multiple CCPs are analogous to the credit problems that are caused by regulations that require that a financial group book its derivative transactions into multiple subsidiaries with a single counterparty. A regulatory scheme that, for example, allowed a financial group to book all of its derivatives with a counterparty into a single entity (typically, a bank) would be far safer than a system (such as we have…

The problem with this guidance is that the dividing line between a loan and a debt security is economically indeterminate. That said, the guidance does point out "bad language" in documents that would indicate that a credit obligation to a bank might be deemed a security rather than a bank loan; e.g., the use of the instrument of terms such as "bond" or "security" or "purchaser." In short, if it is desired that a credit instrument be treated as a "loan," then the instrument should use…

While it is certainly appropriate for the SEC to concern itself with investment in private issuers, the SEC should also be concerned that the costs of the regulation that it imposes might discourage companies from going public. Put differently, the SEC should consider whether it is selling a "product" (access to the public capital markets and exchange liquidity) that is unattractive in light of its subsequent costs.  

Congress should also be concerned about the…