contents
Portfolio Snapshot ...................................................................3
Investment Case and Valuation...............................................6
Regulatory Arbitrage I: Tougher than expected Volcker
rules undiscounted ................................................................22
Key terms from Dodd-Frank Act on “Proprietary Trading” 33
Regulatory Arbitrage II: EU compensation analysis – favors
Global IBs over EU IBs, winners AM & HFs .........................42
Compensation Regulation and disclosure creates an equal
level playing field....................................................................46
CSG – toughest compensation rules so far .........................48
Basel 3 framework -“Building buffers through capital
conservation” .........................................................................49
Key Points from the EU Compensation Regulation ............50
Key Requirements..................................................................54
Scope of Application..............................................................60
Regulatory Arbitrage III: Section 716, pushing part of
derivatives out of the US depositary bank ...........................62
Section 716 – pushing part of derivatives business out of
the US depositary bank..........................................................64
Valuation Methodology and Risks ........................................77
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