Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

SEC Proposes Rules Updating Mining Registrant Disclosure Requirements

Posted in SEC/Corporate

On June 16, 2016, the Securities and Exchange Commission proposed rules (Proposed Rules) to modernize the property disclosure requirements for mining companies under Item 102 of Regulation S-K. The Proposed Rules would also rescind Industry Guide 7 and add a new subpart to Regulation S-K to incorporate the SEC’s mining property disclosure requirements. In its press release announcing the Proposed Rules, the SEC Chair noted that the Proposed Rules would align Regulation S-K with “global standards and give investors more comprehensive information of a registrant’s mining properties that they can use to make informed investment decisions.” Continue Reading

SEC Announces Self-Reporting Initiative for Broker-Dealers Who Have Failed To Comply With Its Customer Protection Rule

Posted in Broker-Dealer

The Securities and Exchange Commission has announced the Customer Protection Rule Initiative (Initiative), under which broker-dealers that have failed to comply with the SEC’s Customer Protection Rule (SEC Rule 15c3-3) may self-report to the SEC in exchange for potentially favorable settlement terms. Continue Reading

CFTC Allows CME To Hold Customer Funds at the Bank of Canada

Posted in CFTC, Derivatives

The Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission has issued no-action relief to allow the Chicago Mercantile Exchange (CME) to hold futures and cleared swaps customer funds at the Bank of Canada, the central bank of Canada. Pursuant to the no-action relief, CME may execute with the Bank of Canada acknowledgment letters as set forth in the no-action letter in lieu of executing an acknowledgment letter as set forth in Appendix B to CFTC Regulation 1.20. Similarly, DCR granted the CME an exemption from the requirements of CFTC Regulation 1.49(d)(3), which provides, inter alia, that customer funds may be held outside of the US in a bank or depository that has at least $1 billion in regulatory capital. As a central bank, the Bank of Canada cannot meet this regulatory capital requirement.

CFTC Letter No. 16-59 is available here.

NFA Imposes Late Fee for Form PQR and PR Filings

Posted in CFTC

National Futures Association (NFA) has implemented a late fee on commodity pool operators (CPOs) and commodity trading advisors of $200 for each business day after the due date that a quarterly NFA Form PQR or PR is filed. The late fee will apply to all late-filed NFA Forms PQR and PR dated September 30, 2016 or later. With respect to Form PQR, the late fee will be assessed on the CPO entity and not on each pool operated by the CPO.

More information is available in NFA Notice I-16-16, which is available here.

Read more about the NFA’s initial rule proposal in the June 3 edition of Corporate & Financial Weekly Digest, available here.

Brexit: Implications for the Financial Services Industry

Posted in EU Developments, UK Developments

Yesterday, June 23, the United Kingdom held a referendum on its future in the European Union (EU)—the “Brexit”. The result this morning shows that 51.9% of voters in the UK want the UK to cease being an EU Member State. Prime Minister David Cameron has since declared that he will be stepping down from his role and that his successor should be in place by autumn. The financial markets have already experienced significant shocks from the Brexit vote; following the vote, the FTSE 100 fell dramatically and Sterling fell significantly against the US dollar and against other major currencies. Continue Reading

MAR Delegated Regulation on Abusive Practices and Suspicious Orders and Transactions Published

Posted in EU Developments, Financial Markets, UK Developments

Updating the Corporate & Financial Weekly Digest March 18 edition, on June 17, the delegated regulation (Delegated Regulation) on arrangements, systems and procedures and notification templates to be used for preventing, detecting and reporting abusive practices or suspicious orders or transactions under the EU Market Abuse Regulation was published in the Official Journal of the European Union. The Delegated Regulation will go into effect 20 days following its publication, and is set to apply from July 3. Continue Reading

ESMA Issues Opinion on MAR Implementing Technical Standards on Disclosure of Inside Information

Posted in EU Developments, Financial Markets

On June 17, the European Securities and Markets Authority (ESMA) issued an opinion (Opinion) in relation to implementing technical standards (ITS) on the public disclosure of inside information under the EU Market Abuse Regulation (MAR). The ITS were originally submitted to the European Commission (Commission) for approval in September 2015. Continue Reading

DC Circuit Court Rejects States’ Challenge of Blue Sky Preemption Under Regulation A+

Posted in SEC/Corporate

On June 14, the Federal Court of Appeals for the District of Columbia (the DC Circuit) rejected challenges from the State of Montana and the Commonwealth of Massachusetts to Regulation A+’s preemption of state securities “blue sky” registration and qualification requirements in Tier-2 offerings under Regulation A+. As previously reported in the June 5, 2015 edition of Corporate & Financial Weekly Digest, the Commonwealth of Massachusetts and the State of Montana, had filed lawsuits with the DC Circuit (which lawsuits were combined by the DC Circuit), which sought to enjoin the effectiveness of Regulation A+ on the basis that Regulation A+ exceeded the SEC’s congressional mandate by pre-empting state “blue sky” review of Tier 2 offerings under Regulation A+. This preemption is fundamental to the utility of Regulation A+.

The complete text of the decision is available here.

FINRA Files Proposed Amendment to Margin Requirements for Credit Default Swaps Rule

Posted in Broker-Dealer, Derivatives

On June 15, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed amendment to FINRA Rule 4240 (Margin Requirements for Credit Default Swaps). FINRA Rule 4240 implements a pilot program that imposes margin requirements for certain credit default swaps that are also security-based swaps. The proposed amendment would allow for the extension of this pilot program until July 18, 2017. The comment period will be open for 21 days following the publication of the proposed rule amendment in the Federal Register.

The proposed rule amendment is available here.

SEC Approves Revised FINRA Margin Requirements Rule

Posted in Broker-Dealer

On June 15, the Securities and Exchange Commission approved on an accelerated basis proposed amendments to FINRA Rule 4210 to establish margin requirements for TBA transactions, Specified Pool Transactions and certain forward transactions involving collateralized mortgage obligations (collectively, Covered Agency Transactions). Continue Reading