Federal Reserve Reopens 'Dollar Liquidity Swap Facilities'

Response to strains in global market

More On Legal & Compliance

from The Advisor's Professional Library
  • Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
  • Advertising Advisor Services and Credentials Section 206 of the Investment Advisers Act contains the anti-fraud provision of the statute and ensures that RIAs’ advertising and marketing practices are consistent with the fiduciary duty owed to clients and prospective clients.   
The Federal Reserve and Swiss National Bank will temporarily reopen "U.S. dollar liquidity swap facilities...designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers," according to a late Sunday night, May 9 announcement. The Fed also announced on May 10 a temporary "U.S. dollar liquidity swap arrangement with the Bank of Japan."

The Bank of Canada, the Bank of England, and the European Central Bank will all take part in the temporary liquidity setup. The arrangements are intended to ease liquidity in light of the market unease late last week as the bailout of Greek sovereign debt was announced and fear spread about which other countries, banks and markets could also be affected. Saturday May 8, the European Union announced a bailout for Greece that amounted to about $1trillion.

Reprints Discuss this story
This is where the comments go.