On November 4, the Securities and Exchange Commission announced that it voted to propose amendments to modernize the rules under the Investment Advisers Act of 1940 (Advisers Act) addressing investment adviser advertisements and payments to solicitors. According to the SEC, the “proposed amendments to the advertising rule (Rule 206(4)-1 under the Advisers Act) would replace the current rule’s broadly drawn limitations with principles-based provisions,” and would permit the use of testimonials, endorsements and third-party ratings, subject to certain conditions. The proposed rule also would include tailored requirements for the presentation of performance results based on an advertisement’s intended audience.
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On October 16, the Commodity Futures Trading Commission (CFTC) unanimously extended the compliance schedule for initial margin requirements for uncleared swaps for entities with average aggregate notional amounts in material swaps exposure of $8 – $50 billion until September 1, 2021. Entities with more than $50 billion of such exposure are still subject to the

On September 26, the Securities and Exchange Commission adopted a new rule to allow all issuers, not just emerging growth companies, to utilize “test-the-waters” communications in connection with an initial public offering or other securities offering.

The rule implements the proposal put forth by the SEC in February 2019, discussed in the March 1, 2019 edition of Corporate & Financial Weekly Digest.
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On September 19, the Securities and Exchange Commission adopted a package of new final rules and rule amendments dealing with recordkeeping and reporting requirements for security-based swap dealers (SBS dealers). In general, the SEC is requiring SBS dealers to create and maintain records with respect to security based-swaps in a manner consistent with current recordkeeping and record retention rules that apply to broker-dealers. The SEC is, however, providing alternate compliance mechanisms that will allow an SBS dealer that also is a swap dealer but is not a broker-dealer to comply with Commodity Futures Trading Commission (CFTC) rules instead and will allow a non-US SBS dealer to request permission to comply with its home country rules.
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On September 17, the directors of the Federal Deposit Insurance Corporation (FDIC) approved a joint notice of proposed rulemaking (NPR) with respect to the prudential regulator margin rules for non-cleared swaps. The joint form of the NPR indicates that the other prudential swap regulators (the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Farm Credit Administration and the Federal Housing Finance Agency) will all be approving the same NPR in the near future.
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On September 16, the Commodity Futures Trading Commission (CFTC) unanimously approved 1) a final rule on security futures product (SFP) position limits and position accountability for (Final Rule); and 2) a proposed rule on public rulemaking procedures (Proposed Rule).
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On August 8, the Securities and Exchange Commission proposed amendments to modernize the required disclosures under Regulation S-K regarding a company’s business description, legal proceedings and risk factors (the Proposal). The Proposal is part of the Staff’s disclosure effectiveness initiative to improve its disclosure regime for investors and registrants. The Proposal would implement a more principles-based approach with respect to the disclosure rules relating to the registrant’s business description and risk factors. The SEC notes that its aim for using such an approach, as opposed to prescriptive requirements, would be to “elicit more relevant disclosures” about the items because the current requirements “may not reflect what is material to every business.” The following are key elements of the proposed amendments.
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The Commodity Futures Trading Commission has published for comment two proposals intended to reduce the regulatory obligations that certain non-US clearing organizations would otherwise be subject. In accordance with section 5b(a) of the Commodity Exchange Act (CEA), it is unlawful for any clearing organization to clear swaps on behalf of US persons unless that clearing organization is registered with the CFTC as a derivatives clearing organization (DCO). However, CEA section 5b(h) authorizes the CFTC to exempt from registration any non-US clearing organization that is “subject to comparable, comprehensive supervision and regulation” by its home country regulator. In the exercise of this latter authority, the CFTC has proposed to permit those non-US clearing organizations that the CFTC determines do not pose a substantial risk to the US financial system to elect either 1) registration as a DCO with alternative compliance obligations; or 2) an exemption from registration altogether.
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