Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

SEC to Consider Adoption of Pay Ratio Disclosure Rules at August 5 Opening Meeting

Posted in Dodd-Frank Developments, SEC/Corporate

On July 29, the Securities and Exchange Commission, pursuant to a “Sunshine Act” notice, stated that it will hold an open meeting on Wednesday, August 5, to consider, among other things, whether to adopt proposed rules for pay ratio disclosure as required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. As discussed in the September 20, 2013 edition of the Corporate & Financial Weekly Digest , the pay ratio disclosure rules were proposed by the SEC in September 2013.

AIFMD Marketing Passport: ESMA Provides European Commission With Advice on Its Possible Extension to Non-EU Jurisdictions

Posted in EU Developments

On July 30, after a one-week delay, the European Securities and Markets Authority (ESMA) published its long-awaited Opinion to the European Parliament, Council and Commission and responses to the call for evidence on the functioning of the Alternative Investment Fund Managers Directive (AIFMD) EU passport and of the National Private Placement Regimes (the “Opinion”) and its Advice to the European Parliament, the Council and the Commission on the application of the AIFMD passport to non-EU alternative investment fund managers (AIFMs) and alternative investment funds (AIFs) (the “Advice”).

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ESMA Consultation on New Remuneration Rules for EU UCITS Managers and EU AIFMs

Posted in EU Developments

On July 23, the European Securities and Markets Authority (ESMA) published a consultation paper assessing new guidelines on sound remuneration policies under the UCITS V Directive and the Alternative Investment Fund Managers Directive (AIFMD). The proposed guidelines in the consultation paper are based on those that ESMA issued in 2013 under the AIFMD—and the proposals for UCITS V management firms are broadly comparable. The consultation paper includes various proposals for EU-based UCITS managers, including: Continue Reading

CFTC Extends Designation of DTCC-SWIFT as Provider of Legal Entity Identifiers

Posted in CFTC, Dodd-Frank Developments, Financial Markets

On July 20, the Commodity Futures Trading Commission issued an order extending the 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) on an interim basis until the CFTC transitions to a global LEI system. The order permits registered entities and swap counterparties subject to the CFTC’s jurisdiction to comply with the swap data recordkeeping and reporting obligations under Parts 45 and 46 of the CFTC’s regulations by using LEIs issued by DTCC-SWIFT or any other pre-local operating unit (pre-LOU) that has been endorsed by the Regulatory Oversight Committee (ROC) of the global LEI system as globally acceptable. Continue Reading

FinCEN Issues Advisory on FATF-Identified Jurisdictions With AML/CFT Deficiencies

Posted in CFTC

On July 20, the Financial Crimes Enforcement Network (FinCEN) issued an advisory announcing that the Financial Action Task Force (FATF) has updated its list of jurisdictions with anti-money laundering and counter-terrorist financing (AML/CFT) deficiencies. In connection with this update, the National Futures Association (NFA) issued a notice reminding futures commission merchants and introducing brokers to review the FinCEN advisory and update their anti-money laundering programs with the most current information on FATF-identified jurisdictions with AML/CFT deficiencies.

NFA’s notice is available here. FinCEN’s advisory is available here.

CFTC Staff Exempts Certain CTAs From Filing Form CTA-PR

Posted in CFTC, Financial Markets

On July 21, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) granted exemptive relief to certain commodity trading advisors (CTAs) from the requirement in CFTC Regulation 4.27(c) to file a Form CTA-PR annually. The relief extends to CTAs that are registered with the CFTC but do not direct any trading of commodity interest accounts. For purposes of this relief, the term “direct” means an agreement whereby a person is authorized to effect transactions for a client’s commodity interest account without such client’s specific authorization.

CFTC letter 15-47 is available here.

Claiming Tipper Received No Benefit, Defendant Invokes Newman in Seeking to Dismiss Insider Trading Allegations

Posted in Banking

A defendant in an insider trading case who allegedly profited from his inside knowledge recently filed a motion to dismiss in the US District Court for the District of Rhode Island to drop him from a Securities and Exchange Commission suit. The defendant tippee, Kenneth Rampino, claimed that following the recent holding in U.S. v. Newman, 773 F.3d 438 (2d Cir. 2014), the SEC unsuccessfully satisfied the requirement that it show the alleged tipper benefited in exchange for his alleged tip to Mr. Rampino, or that Mr. Rampino knew of any such benefit. Continue Reading

SEC Chair Attempts to Reassure Compliance Officers That They Will Not Be Targeted

Posted in Litigation

Demonstrating the effect recent enforcement efforts have had on the industry, in remarks given in Washington, DC at a Compliance Outreach Program for broker-dealers, Securities and Exchange Commission Chairman Mary Jo White tried to assure compliance officers that the SEC does not intend to use its enforcement program to target compliance professionals. Continue Reading

Federal Reserve Issues Final Rule Requiring GSIBs to Bolster Capital

Posted in Banking

The Federal Reserve Board on July 20 approved a final rule requiring the largest, most systemically important US bank holding companies to further strengthen their capital positions. Under the rule, a firm that is identified as a global systemically important bank (GSIB) holding company will have to hold additional capital “to increase its resiliency in light of the greater threat it poses to the financial stability of the United States.” Continue Reading

Federal Reserve Proposes Changes to Capital Planning and Stress Testing Regulations

Posted in Banking

The Federal Reserve Board on July 19 proposed a rule to modify its capital planning and stress testing regulations. The proposed changes would take effect for the 2016 capital plan and stress testing cycles. For all banking organizations, the proposal would remove the tier 1 common capital ratio requirement. For large bank holding companies, the proposal would modify the stress test capital action assumptions. For banking organizations subject to the advanced approaches, the proposal would delay the incorporation of the supplementary leverage ratio for one year and indefinitely defer the use of the advanced approaches risk-based capital framework in the capital plan and stress test rules. For bank holding companies with total consolidated assets of more than $10 billion but less than $50 billion, and savings and loan holding companies with total consolidated assets of more than $10 billion, the proposal would eliminate the fixed assumptions regarding dividend payments for company-run stress tests and delay the application of stress testing for these savings and loan holding companies for one year. The proposal also would make technical amendments to the capital plan and stress test rules to incorporate changes related to other rulemakings. Comments must be received on or before September 24.

To read the proposed rule, click here.