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Governance, Compliance, and Supervision in the Capital Markets


SARAH SWAMMY
MICHAEL MCMASTER











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Preface

As lifelong practitioners in compliance and governance for the capital markets, we have seen many changes throughout our careers. Some of the changes were driven by the natural evolution of products in the marketplace, but many more by sweeping regulatory reform resulting from the 2008 financial crisis. These changes have obfuscated a clear path to conducting business. We have crafted this book to provide both professionals and nonprofessionals the fundamentals necessary to understand and work through the regulatory frameworks that govern our industry.

Sarah Swammy and Mike McMaster

Acknowledgments

We would like to express our enormous gratitude to our colleagues and friends. As leaders in the industry your experience, technical knowledge, and market insight helped to make this book successful: Alexander Abramov, Ian J. Combs, and John Grocki. Thank you for all of your contributions to this work.

We want to extend a special thanks to Larry Harris and Colin Robinson: Larry for editing the many early drafts of the book and Colin for editing the final drafts.

About the Authors

Sarah Swammy is a senior vice president and chief operating officer for State Street Global Market, LLC, a registered broker‐dealer subsidiary of State Street Bank and Trust. She is also a member of the Global Markets Business Risk Committee. Sarah joined State Street from BNY Mellon where she held several leadership positions including business manager and head of supervision for BNY Mellon Capital Markets, LLC and chief administrative officer for BNY Mellon Global Markets and principal overseeing the sales and trading businesses. Sarah has held compliance positions at Deutsche Bank Securities, Inc., CSFB and Barclays Capital, Inc.

Sarah serves as a member of New York Institute of Technology Advisory Board in the School of Management. She is a former member of the Touro College of Education's Graduate Advisory Board and a former member of the Executive Steering Committee for BNY Mellon's Women's Initiative Network.

Sarah holds a BS in Business Administration and an MS in Human Resources Management and Labor Relations from New York Institute of Technology, an MA in Business Education from New York University, and a PhD in Information Studies from C.W. Post. She is also an adjunct instructor at New York University School of Professional Services.

Michael McMaster is a managing director and chief compliance officer for BNY Mellon Capital Markets, LLC, a broker‐dealer affiliate of BNY Mellon, chief compliance officer for BNY Mellon's Broker Dealer Services Division, Government Securities Services Corporation, and is also the head of BNY Mellon's Shared Services Compliance Group, which services its broker‐dealer affiliates and swap dealer. Prior to joining BNY Mellon in 2010, Mr. McMaster was counsel for Rabobank (a Dutch banking organization), handling securities regulatory matters, and Rabobank's U.S. Medium‐Term Note Issuance Programs as well as chief compliance officer for Rabo Securities USA, Inc., the U.S. broker‐dealer affiliate of Rabobank. From 1998 to 2002, Mr. McMaster worked for BNY Capital Markets, Inc.—a predecessor entity to BNY Mellon Capital Markets, LLC—and held the position of chief compliance officer. Mr. McMaster also held positions as counsel and chief compliance officer for Libra Securities LLC and was an Assistant District Attorney in the King's County (Brooklyn, NY) District Attorney's Office. Prior to moving into legal and compliance positions, Mr. McMaster was a collateralized mortgage obligation trader for Tucker Anthony. He graduated with an undergraduate degree in Finance from Manhattan College and received his J.D. from New York Law School. Mr. McMaster is an adjunct professor at New York Law School and is chairman of the Compliance Committee for the New York City Bar Association.

ABOUT THE CONTRIBUTORS

After completing his undergraduate studies in business at the State University of New York at Oswego, Ian J. Combs, Esq., moved to New York City. He soon began his career on Wall Street only a few short months before the financial crisis of 2008 by accepting a position with the Financial Industry Regulatory Authority (FINRA). Since then, Ian has worked in several capacities for FINRA, including as an examiner and regulatory liaison as well as holding a position in regulatory policy. During his tenure at FINRA, Ian attended New York Law School in the evening and graduated with honors in 2015. He was also a member of the Law Review and a recipient of the Harlan Scholarship. Ian's primary expertise is in SEC and FINRA financial and operational rules and regulations.

Alexander Abramov is a technology governance, risk, compliance, and information security senior leader with over 20 years of experience in financial services, advisory services, and life sciences. His roles span from the Head of application development, IT audit manager, IT governance and compliance practice leader, to the Head of Information Risk. (www.linkedin.com/in/abramovalexander)

Mr. Abramov has been defining and leading information risk management programs for multiple areas of financial firms, including broker‐dealer, swaps dealer, prime broker, proprietary trading, securities finance, collateral management, compliance, and operations. He leads organizations to create risk‐based and cost‐effective information risk governance frameworks to protect firms' information assets and achieve compliance with applicable regulatory requirements.

Mr. Abramov has been a member of the board of directors of ISACA New York Metropolitan Chapter since 2007, and was elected President in 2017. His credentials include Certified Information Security Auditor (CISA), Certified in the Governance of Enterprise IT (CGEIT), Certified in Risk and Information Systems Control (CRISC), and FINRA Series 99.

Mr. Abramov is a recognized thought leader in areas of information risk and technology risk governance. He is a co‐author of Cyber Risk (riskbooks.com/cyber‐risk), published in London in 2016. An accomplished speaker, Mr. Abramov has presented at over 30 conferences in North America and Europe on the topics of risk management and IT compliance.