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Defining the Future of Prop Trading |
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Advanced Trading
July 11, 2011
By Ivy Schmerken
Meanwhile, sell-side firms are left to wonder how regulators will monitor compliance with the rules. While hedging is permitted as a risk-mitigating transaction, for example, "That actually presents a potential dilemma since a bank could say a trade was undertaken as a hedge, and have a reasonable basis for arguing so, and the regulator could disagree.
It will be difficult for the regulator and the bank to make a perfect argument about what is a hedge," says Bernie McDevitt, VP of institutional trading at Cheevers & Co., an institutional agency broker in Chicago.
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