Traders In Securities Research Articles

A Structural Critique of Trader Taxation

Taxpayers who are securities traders are subject to unusual treatment under the tax law. Such a taxpayer is, like any other merchant or businessperson, allowed to deduct various expenses incurred in his business of trading securities but, unlike any other merchant or businessperson, is simultaneously allowed to treat gains and losses from the sale of such securities as capital, rather than ordinary, gains and losses. Such capital gains and losses may be taxed at reduced rates and subject to other different tax treatments. Since the enactment of IRC section 475(f) in 1997, traders have also been allowed to make a special election to “mark to market” gains and losses from their securities-trading activities. Making this election allows a trader to recognize gains and losses on the securities he holds as if those securities were sold at fair market value on the last business day of the trader’s taxable year, and to convert such gains or losses to ordinary, rather than capital, gains or losses.The distinctive tax treatment of securities traders has been frequently pointed out, and various commentators have noted that, although the standards for qualifying for trader treatment are uncertain, favorable planning opportunities arise upon achieving such classification. However, the structural elements of the tax law underlying trader tax treatment and the problems created by this statutory structure have somewhat escaped scrutiny. This article approaches the unusual treatment of traders through a structural lens. By focusing on the structure of the statutory tax rules that apply to securities traders, this article explains at the outset how the unusual treatment of securities traders today has occurred due to a long-standing, legislatively created structural disjuncture at the point where the capital asset rules and the “trade or business” concept intersect. This disjuncture was created by the 1934 introduction of the “to customers” requirement into the capital asset statute, that is, the requirement that property otherwise held for sale in the ordinary course of the taxpayer’s trade or business must also be held for sale “to customers” in order to escape being treated as a capital asset. Prior to the 1934 introduction of the “to customers” requirement, the statute was essentially symmetrical in the sense that whether or not a trader–taxpayer was in a “trade or business” led to basically all of the tax consequences to that taxpayer. The introduction of the “to customers” requirement has led to a statutory scheme in which one standard determines the character of the gain or loss from the sale of securities of the trader–taxpayer, but a completely different standard (the trade or business requirement) gives rise to almost all of the other consequences with respect to deductions from gross income that apply to a trader.

Virtual agents of change: How computers are mapping Covid-19’s future

Traffic planners, securities traders and military strategists all use it. Simulating the behavior of millions of idiosyncratic individuals also may be the best way to understand complex phenomena like pandemics.

Have Students Comprehended Investment?

Research aims: This study aims to examine factors that influence stock investment intention among students. Design/Methodology/Approach : The population in this study are all individual student investors registered at the Indonesia Stock Exchange Investment Gallery in the North Sulawesi and Gorontalo Regions. Sample selection is based on the purposive sampling method. Data analysis was performed with SmartPLS 3.0 M3. Research findings: The results found that student attitudes are determined by employment opportunities in the capital market. In addition, attitudes and behavioral control also have significant effect on student intention. This is different with subjective norms which does not affect student investment intention. Theoretical contribution/ Originality : This research confirm that job opportunity influences students attitude in stock investment. The attitude and perceived behavioral control support students intention to invest stock in capital market. Subjective norms does not effect to students intention, in the context of students in the North Sulawesi and Gorontalo Regions. Practitioner/Policy implication : The implication is the universities need to make policies which is friendly with stock investment, such us Seminars, Workshops, Capital Market Schools, and Securities Traders Representative Courses (WPPE). The Indonesian Stock Exchange (Representative Office) and Exchange Members also need to increase an internship quota in order to support student investment intentions. Research limitation/Implication : This study only examines the stage of student intentions because the sample is student whose main activity is studying and the additional activity is investing.

Main trends of development of stock market infrastructure institutions of Ukraine

Introduction. The development of the stock market in modern conditions requires the introduction of new institutions and infrastructure tools aimed at increasing the efficiency of its functioning. In this regard, the study of trends in the development of infrastructure institutions of the stock market of Ukraine is an urgent task of economic research. Methods. The following methods are used during research process. Among them are: abstract and logical, system and monographic analysis, generalization, historical, statistical analysis. Results. The article investigates the state and dynamics of the stock market infrastructure development in Ukraine. Indicators such as the number of registered joint-stock companies, depository institutions, securities traders, asset management companies and joint venture institutions, rating agencies, audit firms on stock market, stock exchanges, and also non-government pension funds are selected to analyze the functioning of the stock market infrastructure The article confirms the dynamics of a decrease in the number of registered joint-stock companies and a corresponding decrease in the number of depository institutions, securities traders, audit firms as infrastructure institutions. It is shown that the development of stock market infrastructure institutions is significantly affected by the increase in the number of small investors, the growing role of information and, accordingly, the number and scale of rating agencies and information systems. Discussion. Prospects for further research are the forming of a development strategy for the institutions of the Ukrainian stock market infrastructure. Keywords: stock market, market infrastructure, institute of infrastructure, development, securities.

Institutional Environment and IPO Strategy: A Study of ChiNext in China

ABSTRACTTaking an institution-based view, we investigate how entrepreneurs respond to immature regulatory environments in order to be listed on stock markets in countries with an emerging economy. Unlike stock markets in developed countries, in emerging markets, gaining government approval for listing is a critical and more unpredictable process for entrepreneurs. Hence, entrepreneurs who are preparing for a public offering might give substantially discounted shares to venture capital (VC) investors. This will lead to higher investment returns in pre-IPO deals than those at earlier stages, which distorts the risk-return tradeoff found in developed markets. In particular, the VC investors affiliated with powerful organizations that can promise entrepreneurs preferential access to stock market gatekeepers will gain even higher pre-IPO investment returns. The associated additional institutional rents earned by VC investors, however, are expected to decrease over time, as the stock markets mature. Related hypotheses with regard to the investment timing, VC firm affiliations with government agencies, securities traders, and universities are tested using data from ChiNext in China (2009–2013). This study highlights that institutional factors impact the behavior of participants in emerging markets. It extends current theories derived almost exclusively from developed markets.

The Desirability of ‘Weak’ Form Legal Harmonization: Perspectives from Statutory Interpretation and Legal Coherence

Harmonized regulatory frameworks have become increasingly important. This is especially so following the global financial crisis, where there have been calls for a harmonized international response to securities regulation. Examples in the EU include MIFID and the Takeover Directive. MIFID regulates securities traders and stock exchanges. It contains rules that indicate the obligations on exchanges and traders vis-à-vis matters such as achieving the “best execution” of trades. The Takeover Directive regulates mergers and acquisitions, their regulations include regulations on anti-takeover provisions, compulsory acquisitions, and the method of paying for acquisitions. These impose a ‘weak’ form of harmonization: member states can opt out of some provisions, many provisions are vague (and require definition by domestic regulators) and member states retain the right to legislate around the harmonized framework. These directives have not received universal support.

Interpreting the Unconventional U.S. Monetary Policy of 2007-09

This paper reviews the unconventional U.S. monetary policy responses to the financial and real crises of 2007-09, divided into three groups: interest rate policy, quantitative policy, and credit policy. To interpret interest rate policy, it compares the Federal Reserve's actions with the literature on optimal policy in a liquidity trap. The theory suggests that, to minimize the length and severity of the recession, would require a stronger commitment to low interest rates for an extended period of time. To interpret quantitative policy, the paper reviews the determination of inflation under different policy regimes. The main danger for inflation from current actions is that the Federal Reserve may lose its policy independence; a beneficial side effect of the crisis is that the Friedman rule can be implemented by paying interest on reserves. To interpret credit policy, the paper presents a new model of capital market imperfections with different financial institutions and a role for securitization, leveraging, and mark-to-market accounting. The model suggests that providing credit to traders in securities markets can restore liquidity with fewer government funds than extending credit to the originators of loans.

Interpreting the Unconventional U.S. Monetary Policy of 2007–09

This paper reviews the unconventional U.S. monetary policy responses to the financial and real crises of 2007–09, dividing these responses into three groups: interest rate policy, quantitative policy, and credit policy. To interpret interest rate policy, it compares the Federal Reserve's actions with the literature on optimal policy in a liquidity trap. This comparison suggests that policy has been in the direction indicated by theory, but it has not gone far enough. To interpret quantitative policy, the paper reviews the determination of inflation under different policy regimes. The main danger for inflation from current actions is that the Federal Reserve may lose its policy independence; a beneficial side effect of the crisis is that the Friedman rule can be implemented by paying interest on reserves. To interpret credit policy, the paper presents a new model of capital market imperfections with different financial institutions and roles for securitization, leveraging, and mark-to-market accounting. The model suggests that providing credit to traders in securities markets is a more effective response than extending credit to the originators of loans.

Should I Fire My Trader or Pay Him A Million?

Recent decades have seen increasing standards of professionalism being applied to buyside equity securities traders. Traders are upgrading their roles in the investment organization, resulting in a need for quantitative assessments, consistent with how portfolio managers and analysts are rewarded. As quantitative assessment of the equity trading process becomes widely accepted, the natural question arises whether the computed “quality scores” of firms, desks and individual traders should influence trader compensation. <b>TOPICS:</b>Exchanges/markets/clearinghouses, portfolio management/multi-asset allocation

The Continued Relevance of Glass-Steagall and the Bank Holding Act

In the form of a legal history discussing competition within the financial sector commercial banks and traders in securities, questions are asked between the lines. The author surmises that American capitalism is founded upon creativity among competitors, and self-sustains only with equally as creative reforms in governing State and Federal law.

THE RECAPTURE OF INSIDERS' PROFITS

THE PRINCIPAL PURPOSE of the Securities Exchange Act of 1934 was to establish and maintain a free, honest, and open market in the trading of securities. Such a purpose is predicated upon the proposition that the security prices prevailing at any time should reflect an appraisal which is based upon information available to all traders in such securities. Accordingly, the Act was designed so as to bring -within its purview certain activities which might in any material manner affect the attainment of such an objective. In its accomplishment Section 16 is undoubtedly an important factor, and it is the purpose of this article to review and appraise some of the more significant cases which have arisen in the administration of that section of the Securities Exchange Act. Prior to the enactment of the Securities Exchange Act in 1934, corporation officers and directors as well as principal stockholders the inside, were frequently in a position to speculate in their company's stock on the basis of inside information not available to the general body of stockholders or to the public. Partly to cope with what Congress apparently considered an inequitable situation, and partly to inform stockholders of the transactions of so-called insiders, Section 16(a)l of the Act2 provides that each officer and director of any corporation whose securities are registered, and each beneficial owner of more than 10 per cent of any class of registered equity security, shall file certain information reports with the Securities and Exchange Commission.3 Initial reports are required whenever a party first becomes an officer or director, or becomes a stockholder beneficially owning more than 10 per cent of the equity security, and monthly reports are required by the tenth of the month following any month in which a change in previously reported holdings took place.4