COVID-19 Updates 5/7

Short Selling Restrictions

In response to recent comments from the French regulator (AMF) on short selling bans, MFA has reached out to the AMF and French Treasury to share our analysis  on the effects of the short sale bans on market functioning. MFA will continue to make data-driven arguments that the bans implemented in Europe have reduced liquidity, increased transaction costs, raised volatility, and ultimately hurt performance in countries with restrictions in place.

U.S. Congress

House Financial Services Committee Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC) announced today that in the coming weeks they plan to convene the Committee for a series of ‘virtual roundtables.” This innovation reflects an ongoing effort of Congress to conduct business in the face of serious operational challenges. Topics of the roundtables were not announced, but one could expect that they will address matters of bipartisan public concerns.

House Minority Leader Kevin McCarthy (R-CA) announced the five Republican Members chosen to serve on the recently established Select Committee on the Coronavirus Crisis. The significance of these appointments is that the Republicans will cooperate with the organization and business of the Select Committee—think Select Committee on Benghazi—and that the Committee will get underway as soon as practicable. Note that of the 12 Members of the Select Committee, five Members sit on the House Financial Services Committee, suggesting that a significant focus will be on matters within that Committee’s jurisdiction.

U.S. Regulators

The CFTC’s Energy and Environmental Markets Advisory Committee held a virtual meeting to discuss the CFTC’s proposed rule on position limits. The recent COVID-19-related market dislocations in crude oil futures has brought greater regulatory attention to whether the dislocation resulted from unique circumstances or actions, or reflects structural issues with the contract that may persist or recur in the future.  As part of this review, the CFTC is likely to consider the role of position limits and investors in the market. For more information, including Commissioner statements and the archived webcast, please see: CFTC press release.

COVID-19 Charitable Response

In response to requests from members, MFA has created a COVID-19 Charitable Response members-only webpage that details the organizations our members are supporting in response to the COVID-19 public health crisis and recovery efforts. If you would like to recommend an organization that is engaging in relief and recovery efforts, please email dcolucci@managedfunds.org.