Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

CFTC Extends Public Comment Period for Swap Dealers and Major Swap Participants Minimum Capital Requirement Proposal

Posted in CFTC, Derivatives

On March 16, the Commodity Futures Trading Commission published in the Federal Register its decision to extend the public comment period for the proposed rules related to minimum capital requirements for swap dealers and major swap participants (Proposal). (For a more complete discussion of the Proposal, see the December 9, 2016 edition of Corporate & Financial Weekly Digest.) The public comment period, which was to close on March 16, has been extended to May 15.

A copy of the Federal Register release is available here.

UK Parliament Formally Adopts Brexit Bill

Posted in Brexit, Brexit/UK Developments, UK Developments

On March 13, the UK Parliament passed the European Union (Notification of Withdrawal) Bill (Bill). The Bill received Royal Assent on March 16.

During the course of debates on the Bill, the UK House of Lords had proposed two amendments, one relating to the rights of EU and European Economic Area (EEA) citizens legally resident in the United Kingdom, and the other to parliamentary approval on the final Brexit deal reached with the European Union. Continue Reading

ESMA Publishes New Q&As on the Central Securities Depositories Regulation

Posted in EU Developments, Financial Markets

On March 13, the European Securities and Markets Authority (ESMA) published a new set of questions and answers (Q&As) relating to the Regulation on improving securities settlement and regulating central securities depositories (CSDs) (Regulation 909/2014) (CSDR). Continue Reading

ISS Updates Frequently Asked Questions for US Proxy Voting Policies and Procedures for 2017

Posted in SEC/Corporate

Proxy advisory firm Institutional Shareholder Services (ISS) recently updated its frequently asked questions (FAQs) for US proxy voting policies and procedures (excluding compensation-related policies and procedures). The following is a brief summary of the new/updated FAQs. Continue Reading

SEC Adopts Rule Requiring Hyperlinks to Exhibits Incorporated by Reference in SEC Filings

Posted in SEC/Corporate

On March 1, in an effort to provide investors with easier access to exhibits to registration statements and periodic reports that are incorporated by reference from earlier filings, the Securities and Exchange Commission adopted rule and form amendments that require issuers to include hyperlinks to the originally filed exhibits. This requirement will apply to filings for which exhibits are required under Item 601 of Regulation S-K, as well as Forms F-10 and 20-F, but excludes exhibits that are filed with Form ABS-EE (related to asset-backed securities) and exhibits filed in XBRL (a machine readable data format that permits investors to more easily access, evaluate and compare financial information both across reporting periods for the same issuer and among different companies). To facilitate the inclusion of such hyperlinks, registrants will also be required to file registration statements and reports in HTML format. These rule and form amendments become effective on September 1, 2017, except that non-accelerated filers and smaller reporting companies that submit filings in ASCII format have until September 1, 2018 to comply.

The press release is available here, and the adopting release is available here.

Acting SEC Chairman Piwowar Makes Remarks at the 2017 SEC Speaks Conference, Including With Respect to “Accredited Investor” Definition

Posted in SEC/Corporate

Acting SEC Chairman Michael S. Piwowar spoke at the SEC Speaks Conference on February 24, offering his remarks on a variety of topics, including the SEC’s disclosure regime and “non-material” disclosure requirements (referring specifically to conflict minerals, pay ratio and resource extraction disclosure requirements) and the assessment of corporate penalties for wrongdoing, among others. Commissioner Piwowar also commented on what he termed “the artificial distinction between ‘accredited’ and ‘non-accredited’ investors” in relation to registration requirements under the Securities Act of 1933 (or exemption therefrom), arguing that the distinction and the resulting limitation on non-accredited investors investing in securities offered as part of certain exempt offerings effectively prevents them from earning the very highest expected returns and diversifying their portfolios.

The transcript of the acting chairman’s remarks is available here.

SEC Solicits Comment on Industry Guide 3

Posted in SEC/Corporate

The Securities and Exchange Commission is engaged in a broad-based review of its disclosure regime, including its industry guides (which are disclosure policies applicable to registrants in specified industries). As part of that effort, on March 1, the SEC voted to solicit public input on whether Industry Guide 3 (which relates to statistical disclosure by bank holding companies) “continues to elicit the information needed for investors to make informed investment and voting decisions.” As Industry Guide 3 was first published in 1976, the request for comment asks for feedback on, among other things, the scope and applicability of, potential improvements to the disclosure regime (such as new disclosures and the elimination or revision of current disclosures) prescribed by, and the effects of regulation on bank holding companies on, Industry Guide 3.

The press release is available here.

SEC Issues Inline XBRL Proposed Rule and Publishes International Financial Reporting Standards (IFRS) Taxonomy

Posted in SEC/Corporate

On March 1, the Securities and Exchange Commission announced a proposed rule that would require the use of Inline XBRL (embedding XBRL data directly into filings, rather than as attachments) and would eliminate the requirement that filers provide XBRL data on their websites. The public comment period on the proposed rule is open until April 30, 2017.

Also on March 1, the SEC published a taxonomy on its website that enables foreign private issuers that prepare their financial statements in accordance with IFRS to submit their financial statements using XBRL. Foreign private issuers may submit their financial statements in XBRL immediately, and, in any case, all foreign private issuers must do so for fiscal periods ending on or after December 15, 2017.

The press releases is available here and here.  The proposing release for Inline XBRL is available here, and the adopting release for the IFRS taxonomy is available here.

DOL Proposes to Delay Fiduciary Advice Rule, Requests Comments on Delay and on Costs, Benefits of the Rule

Posted in Executive Compensation and ERISA, Investment Advisers

On March 2, the US Department of Labor (DOL) published a proposed extension (the Proposal) of the effective date of what is commonly referred to as the “fiduciary rule” or the “fiduciary advice rule” (the Rule). The Rule provides that persons who provide investment advice or recommendations for fees or other compensation with respect to retirement plan assets will be fiduciaries under the Employee Retirement Income Security Act of 1974, as amended (ERISA). This change from prior interpretations of existing law would bring more categories of advisors within the definition of fiduciary. The Rule, by its terms, becomes effective in part on April 10, 2017, and in whole on January 1, 2018.

The entire Katten advisory is available here.


Registered Investment Advisers Take Note: New SEC Custody Rule Guidance

Posted in Investment Advisers

Registered investment advisers should take note of recent pronouncements by the staff of the SEC’s Division of Investment Management (the Division) regarding Rule 206(4)-2 (the Custody Rule) of the Investment Advisers Act of 1940. The Division makes clear that many advisers may unwittingly have custody of client assets under the Custody Rule. Investment advisers should consider taking steps to avoid having imputed custody and take steps to comply with new requirements for standing letters of authorization.

The entire Katten advisory is available here.