Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

SEC Seeks Public Comment on Disclosure Requirements of Subpart 400 of Regulation S-K

Posted in SEC/Corporate

On August 25, the Securities and Exchange Commission announced that it is seeking public comment on the issues that the staff should consider in connection with its review of disclosure requirements under Subpart 400 of Regulation S-K. Continue Reading

CFTC Issues No-Action Letter Regarding Use of Security-Based Swaps in Initial Margin Calculations for Uncleared Swaps

Posted in CFTC, Derivatives

On August 23, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight and Division of Clearing and Risk (the Divisions) issued a response to the International Swaps and Derivatives Association (ISDA), which had requested the CFTC to clarify whether a covered swap entity (CSE) is permitted to include security-based swaps within the same product set as swaps for the purpose of calculating initial margin for uncleared swaps. Continue Reading

NFA Issues Notice Regarding the Designation of Executive Representatives for Electronic Voting Purposes

Posted in CFTC

On August 24, the National Futures Association (NFA) issued Notice I-16-18, advising member firms they will need to designate an executive representative in connection with NFA’s upcoming electronic voting system. Beginning with the 2017 election of NFA’s Board of Directors, NFA will replace paper ballots with a new electronic voting system. The designated executive representative for each member firm will be the only person allowed to take the following actions: (1) submit a petition to nominate a director candidate; (2) cast a vote in a contested director election; and (3) vote for or against amendments to NFA’s Articles of Organization. All notices concerning director elections, article amendments and director nominations will be sent only to a member firm’s executive representative. Member firms can designate their executive representative by completing the new “Executive Representative Contact” form available on the electronic filings portion of NFA’s website.

The Executive Representative Contact form is available here (login required).

Notice I-16-18 is available here.

CFTC Grants SEF Registration Status to Seed SEF LLC

Posted in CFTC, Derivatives

On August 23, the Commodity Futures Trading Commission issued an Order of Registration granting Seed SEF LLC (Seed) full registration status as a Swap Execution Facility (SEF). Upon reviewing Seed’s application, the CFTC determined that Seed is in compliance with the Commodity Exchange Act (CEA) and CFTC regulations applicable to SEFs. As a registered SEF, Seed will be required to comply with the CEA and CFTC regulations applicable to SEFs, as amended from time to time, and all representations and warranties made as part of their SEF application. Including Seed, there are currently 23 SEFs fully registered with the CFTC.

The Order of Registration is available here.

IOSCO Publishes Consultation on Good Practice for Termination of Investment Funds

Posted in Financial Markets, UK Developments

On August 18, the International Organisation of Securities Commissions (IOSCO) published a consultation report (Consultation) on a proposed set of good practices for the termination of open-ended and closed-ended investment funds. IOSCO notes in the Consultation that most national jurisdictions have legislation covering involuntary terminations (such as, when the investment fund becomes insolvent) but not voluntary terminations. IOSCO recognizes the impact terminating an investment fund can have on investors and is proposing the good practices to ensure investment funds’ termination procedures take into account investor protection. Continue Reading

CPMI and IOSCO Publish Second Consultation on Harmonization of Unique Product Identifiers

Posted in Derivatives, Financial Markets, UK Developments

On August 18, the Committee on Payments and Market Infrastructures (CPMI) and the International Organisation of Securities Commissions (IOSCO) published a second consultation report (Consultation) on the harmonization of the unique product identifier (UPI). Continue Reading

European Commission Adopts Further MiFID II and MiFIR Delegated Regulations

Posted in EU Developments, Financial Markets

On August 22, the European Commission (Commission) adopted two further 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). Continue Reading

2016 Amendments to Delaware General Corporation Law Highlight Two-Step Mergers and Appraisal Rights

Posted in SEC/Corporate

On August 1, a number of amendments to the Delaware General Corporation Law (DGCL) went into effect. Notably, several of the amendments modified sections of the DGCL pertaining to (1) two-step mergers effected under Section 251(h) of the DGCL, and (2) appraisal rights and proceedings.

Section 251(h) Mergers

DGCL Section 251(h) provides a mechanism for a buyer to effectuate the negotiated acquisition of a Delaware-domiciled publicly-traded corporation by a tender offer to purchase at least a majority of outstanding shares of the target, followed by a short-form merger to acquire any shares not tendered in such offer. This back-end merger does not require stockholder approval, thereby saving the buyer the time and expense involved in preparing and filing a proxy statement and holding a stockholders’ meeting if Delaware’s standard short-form merger threshold (90%) is not satisfied. The 2016 amendments to the DGCL clarified certain Section 251(h) requirements and increased the availability of such short-form mergers to potential buyers. Continue Reading

FINRA Files Proposed Amendment to FINRA Rule 2232

Posted in Broker-Dealer

On August 15, the Securities and Exchange Commission published the Financial Industry Regulatory Authority’s proposed amendment to FINRA Rule 2232, which will require FINRA members to provide additional price disclosures to retail customers in relation to certain transactions in fixed income securities. FINRA believes the proposed amendment will allow customers to better evaluate the cost and quality of execution services provided by FINRA members, promote transparency into firms’ pricing practices, and encourage communications between firms and their customers with respect to pricing in fixed income transactions. Continue Reading

CFTC Releases Swap Dealer De Minimis Exception Report

Posted in CFTC, Derivatives

On August 15, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) published the Swap Dealer De Minimis Exception Final Staff Report, which summarizes industry comments and data related to the scheduled change to the de minimis exception under the CFTC rules defining “swap dealer.” A related preliminary report analyzed swap data and policy considerations to assess the current de minimis threshold and potential alternatives. (For a more complete discussion of the preliminary report, see the November 20, 2015 edition of the Corporate & Financial Weekly Digest.) The current threshold of $8 billion will decrease to $3 billion after December 31, 2017, unless the CFTC sets a different date or modifies the de minimis exception. Continue Reading