Dodd-Frank Developments

On August 20, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) approved their version of a set of amendments intended to simplify some of the requirements of the regulations implementing Section 13 of the Bank Holding Company Act of 1956 (the “Volcker Rule”), which was enacted as Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Volcker Rule generally prohibits banking entities from engaging in proprietary trading and from owning or controlling hedge funds or private equity funds subject to numerous qualifications and exemptions set forth in the Volcker Rule regulations, which are identical sets of rules adopted by each of the Volcker Rule regulators (the FDIC, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Federal Reserve), the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission). These final amendments incorporate the responses of the Volcker Rule regulators to the numerous comments they received when they initially proposed a set of amendments in 2018.
Continue Reading FDIC Approves Amendments to the Volcker Rule

On July 23, the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) published a revised framework for mandatory initial margin applicable to swaps that are not cleared with a central clearing party. The key revision was the insertion of an additional year into the implementation schedule for the margin rules.
Continue Reading Delay of Final Implementation of Swap Initial Margin Rules

On July 8, the staff of the Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission issued a report containing data and analysis concerning possible exclusions from the calculation of the swap dealer de minimis registration threshold for swaps executed on a regulated exchange and/or cleared by a derivatives clearing organization.
Continue Reading CFTC Report Concerning On-Venue and Cleared Swaps

On July 17, the Federal Register published proposed changes to the Volcker Rule that were jointly approved by the Federal Reserve Board, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Securities and Exchange Commission. As described in greater detail in the June 1,

On February 21, the US Supreme Court decided Digital Realty Trust, Inc. v. Somers (583 U.S. ____ (2018)), which resolved a circuit split related to whether the anti-retaliation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 124 Stat. 1376 (Dodd-Frank) extend to individuals who have not reported a securities law violation to the Securities and Exchange Commission and, therefore, falls outside of Dodd-Frank’s definition of a “whistleblower.”
Continue Reading Supreme Court Limits Scope of Dodd-Frank Whistleblower Protections

On October 13, the Commodity Futures Trading Commission and the European Commission (EC) made three announcements that are significant for cross-border swap activity between the United States and Europe.

  1. CFTC Margin Rule Comparability Determination.

The CFTC has made a determination that the margin rules for uncleared swaps that apply in the European Union are comparable to the CFTC’s margin rules. This determination activates the substituted compliance provisions found in Section 23.160(b)(2)(iii) of the CFTC margin rules that until now have not been available to EU entities registered as swap dealers.
Continue Reading Three Developments Concerning EU-US Cross-Border Swaps

On September 5, the regular settlement cycle for most securities transactions in the United States will change from three days (T+3) to two days (T+2). In order to assist derivative market participants that have existing equity derivative transactions with payment dates based on T+3, the International Swaps and Derivatives Association (ISDA) has developed the 2017 OTC Equity Derivatives T+2 Settlement Cycle Protocol (“T+2 Protocol”).
Continue Reading ISDA To Publish T+2 Protocol

On May 10, the Consumer Financial Protection Bureau (CFPB) held a field hearing and issued a notice and request for information related to the small business lending market. Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act amended the Equal Credit Opportunity Act to require “financial institutions” (as defined in Section 1071) to compile, maintain and report information concerning credit applications made by women-owned, minority-owned and small businesses. The purpose of the data collection is to facilitate enforcement of fair lending laws and to enable communities, governmental entities and creditors to identify business and community development needs and opportunities of women-owned, minority-owned and small businesses.
Continue Reading CFPB Requests Information Regarding the Small Business Lending Market

Lacking the ability to issue formal no-action relief from strict compliance with the variation margin rules for uncleared swaps coming into effect on March 1, the Board of Governors of the Federal Reserve System, the Office of Comptroller of the Currency (OCC) and the European Supervisory Authorities (ESA) have each issued statements suggesting that they