If you weren't able to join us on our 2010 predictions webcast today, I wanted to at least share one of the predictions, specifically for Capital Markets, that I spoke to. I talked about capital markets reform being more bark than bite.

Reform and regulation has continually been called for over the past year and half and is still needed going forward. There are, however, a number of factors that I see working against substantial progress that leaves regulators falling short on any meaningful or substantial reform law in 2010.

Some of the main obstacles I see are the following:

• Firstly, an unorganized SEC: SEC chairman Mary Schapiro is having a difficult time getting proposals passed and when they are it is typically in some diminished fashion. For example, after failing to uncover the Madoff scheme, it was proposed that 10,000 fund managers would be subject to surprise inspections. The outcome however was far short of the proposals original ambitions - whereby only 1,600 fund managers are subject to unannounced audits. Overall, some of the other factors here are the very large number of proposals the SEC has to work through, a tarnished image that undermines its effectiveness and a lack of political currency to really push through tougher reform.

• Another hurdle is Washington's political jockeying: While the SEC and CFTC have actually come together to discuss OTC derivatives and other reform measures, the progress to date has been largely on discussing the two agencies differences rather than any offering any proposals. There continues to be political wrangling between various government agencies that hamper them from working well together or successfully being combined into a new regulatory interagency council.

• Also lobbying and industry pushback presents a large obstacle: As one would expect there is always strong opposition to reform from industry firms. What we've seen is that during the public comment periods for various proposals, financial firms have waged a reasonably successful response strategy that has helped pare back the severity of some proposals.

So the net results of these obstacles are watered down, niche proposals and overall a lack of actual reform law. To this end, we do not see any major reform being passed over 2010 that will dramatically alter status quo. The main objectives of the reform and there likely outcome will be increased levels of reporting as opposed to major market structure, product, service or business operation changes.

We'll be watching these proposals carefully. There continues to be big talk about how the hammer is going to drop. And in the off chance that a surprise law change is made, we would expect it to target electronic trading practices. Specifically, the areas to keep an eye on over 2010 are proximity hosting and collocation practices, flash order bans, and greater dark pool transparency. Beyond this there is also consideration for changes that could be made to Reg ATS and Reg NMS in the form of new short-selling disclosure rules, and new uptick or circuit breaker rules. Capital markets firm are certainly content with stalled reform changes. I might also add that it's good that regulators are taking a slower approach, albeit not necessarily on purpose, and trying to force through hysterical legislation like Sarbox, which becomes a costly reporting reform measures at best that has not sustainably changed much.