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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 …

On February 6, the acting Securities and Exchange Commission Chairman, Michael Piwowar, issued a statement soliciting public comment on “unexpected challenges” that issuers have experienced in anticipation of complying with the pay ratio disclosure rule and directing the SEC staff to reconsider the implementation of the rule. The pay ratio disclosure rule, adopted to implement Section 953(b) of the Dodd–Frank Wall Street Reform and Consumer Protection Act, will require each issuer to disclose the ratio of the compensation of its chief executive officer to the median compensation of all of its employees, as discussed in the August 7, 2015 edition of the Corporate & Financial Weekly Digest. As currently adopted, this rule will first apply with respect to compensation for the company’s first fiscal year beginning on or after January 1, 2017 (for most companies, their proxy statements for their 2018 annual shareholder meetings). Comments are being solicited for 45 days following the announcement.
Continue Reading Acting SEC Chair Directs Staff to Reconsider Pay Ratio Disclosure Rule

On January 31, the acting Securities and Exchange Commission Chairman, Michael Piwowar, issued a statement announcing that he directed the staff of the SEC to reconsider the rule on conflict minerals, including the agency’s 2014 guidance on such rule. As discussed in the August 24, 2012 edition of the Corporate & Financial Weekly Digest, the rule on conflict minerals, which was mandated by Section 1502 of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), implemented disclosure and reporting requirements regarding the use by issuers of conflict minerals from the Democratic Republic of the Congo and adjoining countries. Acting Chairman Piwowar commented that the disclosure requirements led to a de facto boycott of minerals from portions of Africa, as well as prohibitively high costs to legitimate mining operators, forcing them to close their mining operations. Comments on reconsideration of the rule and the 2014 guidance are being solicited for 45 days following the announcement.
Continue Reading Acting SEC Chair Directs Staff to Reconsider Rule on Conflict Minerals

On December 2, the Commodity Futures Trading Commission re-proposed minimum capital requirements for swap dealers (SDs) and major swap participants (MSPs) that are not subject to prudential regulation (Covered Entities). The CFTC had initially proposed capital rules for Covered Entities in 2011 but deferred further action pending finalization and implementation of uncleared swaps margin requirements. The CFTC finalized margin requirements in December 2015 that began being implemented in September 2016.
Continue Reading CFTC Re-Proposes Minimum Capital Requirements for Swap Dealers and Major Swap Participants

On December 5, the Commodity Futures Trading Commission voted to repropose position limits for futures and swap positions. On the same day, the CFTC also approved final aggregation rules for futures and option contracts on nine agricultural commodities.
Continue Reading CFTC Finalizes Aggregation Rules and Re-Proposes Position Limits Rule

On December 7, the Commodity Futures Trading Commission’s Division of Market Oversight (DMO) announced the results of its rule enforcement review of ICE Futures U.S. The review covered a one-year target period and evaluated ICE’s compliance with Designated Contract Core Principles 2 (Compliance With Rules) and 12 (Protection of Markets and Market Participants).
Continue Reading CFTC Releases Results of ICE Futures U.S. Rule Enforcement Review