The Senate passed its version of the financial services reform bill, S. 3217, on Thursday, May 20, by a 59-39 vote. After the sweeping reform bill passed, Dr. Lewis Altfest gave his opinion on the bill to John Sullivan, Editor in Chief of AdvisorBiz.com.
By Dr. Lewis Altfest
Now that the financial reform bill has passed, a few remarks are in order both on how effective it will be and how it will impact the advisor community.
There is merit to the restriction of proprietary trading at wirehouses and large institutions. I think the Volcker Rule is right in its proposal to separate the derivatives business from a financial institution’s core function. Derivatives absolutely should be traded on an exchange. There might be instances where exceptions could, and should, be made. But having them trade on an exchange will not only result in freer market conditions, but it will also shine a light on them, make them more transparent and we’ll therefore allow all of us to know what’s good and what might be a potential problem.