Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

SEC Proposes Amendments To Update and Simplify Disclosure Requirements: A Closer Look

Posted in SEC/Corporate

On July 13, the Securities Exchange Commission proposed and requested comment regarding rule amendments to update and simplify certain disclosure requirements that may have become “redundant, duplicative, overlapping, outdated or superseded” in light of: 1) US Generally Accepted Accounting Principles (GAAP); 2) International Financial Reporting Standards (IFRS); 3) other SEC disclosure requirements; or 4) changes in the information environment. The SEC also solicited comment on certain disclosure requirements that overlap with GAAP, but also require additional information, to determine whether to retain, modify, eliminate or refer them to the Financial Accounting Standards Board (FASB) for potential inclusion in GAAP. The proposals are part of the Division of Corporate Finance’s ongoing disclosure effectiveness initiative aimed at improving disclosure for both investors and companies and the SEC’s efforts to implement the Fixing America’s Surface Transportation (FAST) Act. Continue Reading

FINRA Proposes To Require Members To Report Transactions in US Treasury Securities to TRACE

Posted in Broker-Dealer

On July 19, the Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission to amend its Trade Reporting and Compliance Engine (TRACE) reporting rules to require the reporting of transactions in all US Treasury Securities other than US savings bonds. This proposal would include transactions in US Treasury bills, notes and bonds, as well as separate principal and interest components of a US Treasury Security that have been separated pursuant to the Separate Trading of Registered Interest and Principal of Securities (STRIPS) program operated by the Treasury Department. Continue Reading

CFTC Extends DTCC-SWIFT’s LEI Provider Designation

Posted in CFTC, Derivatives

On July 21, the Commodity Futures Trading Commission published in the Federal Register an order to extend for an additional year the CFTC’s designation of the Depository Trust and Clearing Corporation and Society for Worldwide Interbank Financial Telecommunications joint venture (DTCC-SWIFT) as the provider of legal entity identifiers (LEIs). Such LEIs are used by registered entities and swap counterparties subject to the CFTC’s jurisdiction to comply with the swap data recordkeeping and reporting obligations set forth in Parts 45 and 46 of the CFTC’s regulations. This order supersedes a July 17, 2015 order (2015 Order) which extended DTCC-SWIFT’s designation as the LEI provider during the continued transition to a fully operational global LEI system. (For a more complete discussion of the aforementioned order, see the July 24, 2015 edition of Corporate & Financial Weekly Digest.) Continue Reading

Banking Agencies Issue CRA Questions and Answers

Posted in Banking

On July 15, the federal bank regulatory agencies with responsibility for Community Reinvestment Act (CRA) rulemaking—the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC)—published final revisions to the “Interagency Questions and Answers Regarding Community Reinvestment.” The Questions and Answers document provides additional guidance to financial institutions and the public on the agencies’ CRA regulations. The agencies are adopting as final revisions to the Questions and Answers based on the proposal issued on September 10, 2014 addressing alternative systems for delivering retail banking services; community development related issues; and the qualitative aspects of performance, including innovative or flexible lending practices and the responsiveness and innovativeness of an institution’s loans, qualified investments, and community development services.

More information from the FDIC is available here.

EU Commissioner Confirms No Rush To Relocate Euro Clearing Inside Eurozone

Posted in Brexit, EU Developments, Financial Markets

A senior European official has stated that the European Union has no immediate plans to push for the euro-denominated clearing business of London clearinghouses to relocate inside the Eurozone. Speaking at an event in Washington, DC, Valdis Dombrovskis, the member of the European Commission (Commission) responsible for financial services, noted that among the many issues for discussion in the Brexit negotiations between the United Kingdom and the European Union, London clearinghouses are not the most urgent. Commissioner Dombrovskis nonetheless did not exclude the possibility of the issue arising for discussion in the future. Commissioner Dombrovskis is vice president of the Euro and Social Dialogue of the Commission, and recently replaced Jonathan Hill, of the United Kingdom, as Commissioner for Financial Services and Capital Markets Union, following Lord Hill’s resignation in the aftermath of the Brexit vote in late June.

ESMA Publishes Advice on Potential Extension of AIFMD Marketing Passport

Posted in Brexit, EU Developments, Financial Markets

On July 19, the European Securities and Markets Authority (ESMA) published its long-delayed and much anticipated advice to the European Commission (Commission) in relation to the extension of the Alternative Investment Fund Managers Directive (AIFMD) marketing passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative Investment Funds (AIFs). In it, ESMA gives broadly positive advice in relation to 12 countries: Australia, Bermuda, Canada, Cayman Islands, Guernsey, Hong Kong, Japan, Jersey, Isle of Man, Singapore, Switzerland, and the United States—with some reservations, as noted below. Continue Reading

European Commission Adopts MiFID II and MiFIR Delegated Regulations

Posted in EU Developments, Financial Markets

On July 14, the European Commission (Commission) adopted several delegated regulations (Delegated Regulations) to supplement the amended and restated Markets in Financial Instruments Directive (MiFID II), and the Markets in Financial Instruments Regulation (MiFIR), respectively. Continue Reading

FCA Proposes Amendments to UK AIFMD Annex IV Reporting

Posted in EU Developments, Financial Markets

On July 4, the UK Financial Conduct Authority (FCA) published its quarterly consultation paper (Quarterly Consultation), which details proposed amendments to the FCA Handbook. In this Quarterly Consultation, the FCA has proposed to extend and amend UK reporting requirements under the EU Alternative Investment Fund Managers Directive (AIFMD) for certain UK AIFMs and also for non-European Economic Area (EEA)AIFMs that market feeder AIFs in the United Kingdom. Continue Reading


Posted in Brexit

Nathaniel Lalone, a Financial Services partner at Katten Muchin Rosenman UK LLP, will continue to share his insight into the evolution of the relationship between the United Kingdom and European Union in the wake of the Brexit vote. On July 13, he published an article in Bloomberg Law on the issue of the “passport,” which refers to the principle that a financial market participant authorized to conduct certain financial activities in one EU member state is generally free to conduct such activities without hindrance in other EU member states.

To read the Bloomberg Law article, click here.

SEC Division of Corporation Finance Issues New C&DIs on A/B Exchanges

Posted in SEC/Corporate

The staff of the Securities and Exchange Commission, through a series of letters, which began with a 1988 no-action letter to Exxon Capital Holdings Corporation, has taken the position that, when an issuer has privately sold non-convertible debt or other securities (Original Securities) to large, sophisticated investors, the issuer may register the exchange (A/B Exchange) of the Original Securities for substantially similar securities (Exchange Securities) that can be resold by most holders thereof (Exchange Recipients) without further registration or delivery of a prospectus. One reason for the SEC’s position as to A/B Exchanges is that the participants in such an exchange are not engaged in a distribution of the Exchange Securities (unless the participants are underwriters). Continue Reading