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Regulation and Compliance > Federal Regulation > SEC

Hearings, the SEC, the Fed, and Earnings: Advisor Briefing for the Week of July 19, 2010

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Passage by a Senate last week still controlled by the Democrats of the Dodd/Frank reform bill will be followed this week by President Obama placing his signature on the bill, but Congress itself is holding multiple hearings on everything from oversight of the SEC to bank capital requirements. Fed Chairman Ben Bernanke visits the House and Senate on consecutive days to report on the economy, second quarter corporate earnings season is in full swing, and several reports will give a clearer view of the housing market. However, the biggest news of the week directly affecting advisors of all stripes is likely on Wednesday, July 21, when the SEC is expected to release its long anticipated rules on 12b-1 fees, and news on Form ADV Part 2.

Starting this week, the NAHB releases Monday, July 19, its housing index for July, while President Obama will make remarks about the economy.

On Tuesday, July 20, the Senate Judiciary Committee is scheduled to vote on the nomination of Elena Kagan to the Supreme Court, while the Security and International Trade and Finance Subcommittee holds a hearing on international cooperation to modernize financial regulation. Two retail sales reports are due that day–the ICSC/Goldman Sachs Store Sales Index and the Johnson Redbook index–while we hear about housing starts for June. But the big news for advisors might come out of the Capital Markets subcommittee of the House Financial Services Committee, which holds hearings on oversight of the SEC.

Companies announcing earnings on the 20th include: Bank of New York Mellon (BK); expected to have per-share earnings of $0.54 vs. $0.51 last year; TD Ameritrade’s (AMTD) estimated earnings are $0.28 on sales of $680.13 million versus $0.30 last year; and Morgan Stanley–now the biggest broker/dealer in terms of advisors with 18,100–is expected to report earnings of $0.46 compared to a loss of $1.10 last year; Goldman Sachs (GS) should report earnings per share of $2.20 on $4.93 billion in sales compared with $4.93 in earnings per share on $13.76 billion in revenue last year in the second quarter. State Street is also slated to release its quarterly results.

On Wednesday, July 21, the SEC will hold an open meeting at which it is expected to release rules on 12b-1 fees and discuss changes to Form ADV, Part 2, to include plain-English versions of what RIAs offer clients and disclose their conflicts of interest.

President Obama is scheduled to sign the financial reform bill on the 21st as well, the same day the Senate Banking Committee welcomes Federal Reserve Chairman Ben Bernanke to deliver his semiannual report on Monetary Policy and the State of the Economy (he reports to the House Financial Services Committee House Financial Services Committee on the same topic on Thursday, July 22.)

Companies reporting second quarter results that day include: asset manager Blackrock (BLK), which is estimated to report $2.31 in earnings per share vs. $1.75 a year ago. Piper Jaffray’s (PJC) earnings estimate is $0.51 on $132 million in sales vs. $0.59 last year for the same period. Raymond James Financial (RJF)–with 4.500 advisors– could report $0.48 per share on sales of $734.5 million, while Wells Fargo (WFC), with 15,000 registered representatives, is expected to earn $0.48 on $21.38 billion vs. $0.57 last year.

On Thursday, July 22, economic reports include weekly jobless claims from the Department of Labor, the National Association of Realtors existing home sales report for June, while the Conference Board releases leading economic indicators for June. Penson Worldwide (PNSN) is expected to share its second-quarter performance; analysts estimate it should earn $0.05, down from $0.24 in the same year-ago period.

On Friday, July 23, come the release of stress tests for European banks on a bank-by-bank basis from the Committee of European Banking Supervisors.


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