Regulatory Actions By SEC In Credit Crunch
Since, the Securities and Exchange Commission is a governing body which works towards safeguarding traders interests in the market, it also take some regulatory actions in situations like credit crunch. In this article, we are going to focus our discussion regarding regulatory actions by SEC in credit crunch. Among the actions taken by the Securities and Exchange Commission in credit crunch is the enforcement of very rigid and new rules to all forms of naked short sellings considered to reduce the volatility in turbulent markets.
The regulatory actions by SEC in credit crunch are such that it investigates into cases where it seems that certain individuals or companies are involved in manipulating the market by spreading false rumors regarding certain financial institutions. The actions taken by Securities and Exchange Commission in credit crunch also involve investigating if there are any trading irregularities and abusive short selling practices being going on in the trading market.
The hedge fund managers, the institutional investors and the brokers or dealers are also asked to reveal under oath, some kind of details pertaining to their positions in the case of credit default swaps. The other steps by SEC In credit crunch is to bring about the largest settlements in the history of the SEC on behalf of traders who have purchased auction rate securities from various different financial institutions.
The regulatory actions by SEC in credit crunch is such that the SEC aims to regulatory agenda and also reforming credit rating agencies and examining suitability requirements for selling complex asset-backed securities, but proposed rules are not expected for at least a few months. In the meantime, the Securities and Exchange Commission probe of the securitization of sub prime mortgages into collateralized debt obligations as a part of the regulatory actions by SEC in credit crunch.
There is a special internal working who looks at whether bank holding companies and securities firms. It is termed as the important regulatory actions by SEC in credit crunch. A special team has been made to evaluate if the centralized debt obligation, CDOs are checked, accounted and valued properly, and whether the capital liquidity levels are sufficient and whether credit rating agencies failed to value CDOs properly. The staff of also holds a meeting every month with large investment banks to discuss credit risk exposures.
Thus we see that there are so many actions taken by Securities and Exchange Commission in credit crunch.