The future of the Dodd-Frank Act (DFA), once an unavoidable and burdensome new reality for US fixed income markets, is now completely uncertain under the coming Trump Administration.
In TABB Group’s latest Market Note, “Dismantling Dodd-Frank? Regulatory Overhaul Redux,” report author Colby Jenkins examines what we know so far about the incoming Trump administration’s plan to ‘dismantle’ the DFA and to what extent their proposals might come to fruition.
Though it is still early days, Jenkins points out that the Trump financial services team has made public on their website that they aim to “dismantle the Dodd-Frank Act and replace it with new policies.”
However, a repeal of all DFA provisions is realistically going to be difficult considering the sheer scope of the market covered within the language of the law. In fact, as of July 2016, 70.3 per cent of Dodd-Frank rule-making requirements have already been finalised.
Jenkins breaks down some of TABB’s leading predictions about which regulatory issues we can expect the Trump financial services team to train their sights on as inauguration day approaches.
“It is still too early to forecast the true scope of the regulatory change a Trump administration might hope to achieve, but what can be guaranteed is that the cloud of regulatory uncertainty that has been hanging over the collective US fixed income market is unlikely to clear for the foreseeable future,” says Jenkins. “The current laundry list of issues with the DFA legislation vary from minor to outright obstructive to the health of the US fixed income market trading ecosystem.”