Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

SEC Division of Corporation Finance Issues C&DIs Regarding Notices of Exempt Solicitation

Posted in SEC/Corporate

On July 31, the staff of the Division of Corporation Finance (the Staff) of the Securities and Exchange Commission released two new Compliance and Disclosure Interpretations (C&DIs), in the Proxy Rules and Schedules 14A/14C section, providing guidance on the use of Notices of Exempt Solicitation. Continue Reading

Delaware Chancery Reiterates Directors’ Right to Access Corporation Information

Posted in SEC/Corporate

In a recently issued letter decision, the Delaware Court of Chancery reiterated the general rule that directors have an unencumbered right to access corporate information (with certain exceptions). The case involves a dispute between two groups of directors—those affiliated with a controlling stockholder, and those that are not. An affiliated director filed a motion to compel the production of information, including corporate communications between (1) unaffiliated directors and officers of the corporation and company counsel; and (2) members of a special committee formed specifically to negotiate with the controlling stockholder and that committee’s own independent counsel. The court largely granted the affiliated director’s request, with the exception of communications between the special committee and its counsel. Continue Reading

CFTC Proposes Rules to Simplify Process for Foreign Clearing Organizations to Obtain DCO Registration Exemptions

Posted in CFTC, Derivatives

On August 8, the Commodity Futures Trading Commission announced that it has proposed rules pursuant to which a clearing organization located outside of the United States may obtain an exemption from registration as a derivatives clearing organization (DCO) in order to provide swaps clearing services to certain US persons. The proposed rules codify the CFTC’s existing policies and procedures for granting such exemptions. To date, the CFTC has exempted four non-US clearing organizations from registration: ASX Clear (Futures) Pty Limited, Japan Securities Clearing Corporation, Korea Exchange, Inc., and OTC Clearing Hong Kong. Continue Reading

NFA Announces the Effective Date of Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities

Posted in CFTC, Derivatives, Digital Assets and Virtual Currencies

On August 9, the National Futures Association (NFA) announced the effective date of its recently adopted Interpretive Notice, Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The Interpretative Notice will go into effect on October 31 (“Effective Date”). Continue Reading

FCA Publishes Dear CEO Letter on Cross-Border Booking Arrangements

Posted in Brexit, Brexit/UK Developments, Digital Assets and Virtual Currencies, Financial Markets, UK Developments

On August 8, the UK Financial Conduct Authority (FCA) published a “Dear CEO” letter concerning cross-border booking arrangements.

In the letter, the FCA explains that the UK’s impending withdrawal from the EU has resulted in firms needing to put in place contingency plans that, when executed, will impact current business models, legal entity strategies and booking arrangements. The FCA states that it appreciates the information firms have already provided to it on their plans, and reminds firms of the importance of continuing to provide all necessary information. The FCA further states that firms should not make decisions without first speaking to the FCA. Continue Reading

GFXC Publishes Updated Version of Its FX Global Code

Posted in EU Developments, Financial Markets

On August 6, the Global Foreign Exchange Committee (GFXC) published a paper looking back over the first year of the FX Global Code (Code), as well as an updated version of the Code.

The paper highlights the GFXC’s priorities, including: Continue Reading

ESMA Updates TTC Calculations for MiFID II/ MiFIR

Posted in Derivatives, EU Developments, Financial Markets

On August 6, the European Securities and Markets Authority (ESMA) published an updated version of the transitional transparency calculations (TTC) for the purposes of the revised Markets in Financial Instruments Directive (MiFID II) and the associated Markets in Financial Instruments Regulation (MiFIR).

The TTC is a series of calculations in relation to equity and non-equity instruments which National Competent Authorities (NCAs) are responsible for performing (for more information, see the Corporate & Financial Weekly Digest edition of December 8, 2017). Continue Reading

FINRA Seeks Comment on Fintech Innovation in Broker-Dealer Industry

Posted in Broker-Dealer

On July 30, the Financial Industry Regulatory Authority (FINRA) issued a Special Notice requesting comment on how to continue to foster financial technology (fintech) innovation in the financial services industry. In particular, to support its mission of investor protection and market integrity, FINRA is seeking comment from market participants on how FINRA rules or administrative processes could be modified to better facilitate fintech innovation. In addition, FINRA requests comment on three specific areas: the provision of data aggregation services that compile information from different financial accounts for investors, supervisory processes concerning the use of artificial intelligence, and the development of a taxonomy-based machine-readable rulebook.

The deadline for comment is October 12.

The full Notice is available here.

FINRA Seeks Comment on Proposed Amendments to the Membership Application Program Rules

Posted in Broker-Dealer

On July 26, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice requesting comment on a proposal to the NASD Rule 1010 Series (collectively, the “Membership Application Program” rules). The Membership Application Program rules govern how FINRA’s Department of Member Regulation (the Department) reviews new membership applications and continuing membership applications (CMAs). An applicant must be able to show its ability to comply with the standards set forth in the Membership Allocation Program rules, and, to ensure that such applicant can comply with the rules, the Department considers an applicant’s financial, operational and compliance systems. Continue Reading

CFTC Extends No-Action Relief to Shanghai Clearing Firm

Posted in CFTC, Derivatives

On July 31, the Commodity Futures Trading Commission’s Division of Clearing and Risk extended no-action relief to the Shanghai Clearing House (SHCH). Originally set to expire on February 28, 2019, the relief is extended until July 31, 2021.

The no-action relief, originally granted in May 2016 and renewed several times, permits SHCH to continue to clear certain swaps subject to mandatory clearing in China for the proprietary trades of SHCH clearing members that are United States persons or their affiliates.

CFTC Letter No. 18-18 is available here.