WASHINGTON Securities regulators and industry representatives are continuing to draft voluntary guidelines for derivative affiliates of securities firms, and expect to finish most of their task before the end of the month.
"The hope is to finish as much work as we possibly can by Thanksgiving," said Thomas Russo, a managing director at Lehman Brothers and a member of the industry panel that is working closely with the Securities and Exchange Commission to develop the guidelines.
"I think we're making significant progress, frankly more than I thought would be made, but there's still a lot more to do," Russo said.
An aide to Rep. John Dingell, D-Mich., said the SEC hasn't asked for more time, but some industry sources have said that the guidelines won't be out until December. Repeated attempts to obtain comment from SEC chairman Arthur Levitt were unsuccessful. However, Levitt told a Senate panel in September that the standards would be out by Thanksgiving day.
Securities industry officials and the SEC had originally hoped to agree on some voluntary standards in September or October and present them to Congress before its session ended.
Dingell earlier had given the securities officials and regulators until November to come up with a plan.
The voluntary standards are an effort by the SEC and securities firm officials to stave off congressional action that would require the SEC to regulate the derivatives affiliates of securities firms and insurance companies.
At present, SEC oversight is limited to collecting information from derivatives affiliates on a quarterly basis.
Meanwhile, in a separate effort to improve disclosure of derivatives activity, the SEC staff is considering whether or not to release its own disclosure guidelines as a supplement to the recently released Financial Accounting Standards Board accounting guidelines.
SEC officials said that while the board's guidelines are a step in the right direction, they might not go far enough.
"When the FASB embarked on that project, staff here recommended that there be disclosure by end users of quantitative numeric information about their positions in derivatives," said Walter Schuetze, the agency's chief accountant.
"The staff here thinks that investors would be much assisted by having some quantitative numeric information about positions of end users," Schuetze said. While FASB was unable to accomplish this in its most recent guidelines, SEC staff is continuing to look at the possibility of doing it as a commission document, he added.
