SEC approves capital rules
WASHINGTON, DC -- The Securities and Exchange Commission (SEC) has approved rules – first proposed in October 2003 – allowing certain broker-dealers to use internal models to determine their capital requirements. The rules also set up a new structure for consolidated supervision of holding companies of broker-dealers (IBHCs).
The new rules were created in response to the EU Financial Conglomerates Directive, which would have forced US investment banks to ring-fence their European operations if the SEC didn’t introduce a consolidated supervisory framework for the firms. In an exclusive interview, an SEC official said it was important to realise that "the rules were initiated for the US, and not Europe, but they are good enough for Europe. Firms not affiliated to a consolidated supervised entity, that do not adopt our
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