The final rules implement portions of the Dodd-Frank Act relating to risk management, capital and leverage, liquidity, stress testing and debt-to-equity limits. Other enhanced prudential standards, such as single-counterparty credit limits and an early remediation framework, remain under development by the Federal Reserve. The Federal Reserve recently approved final rules that apply enhanced prudential standards to foreign banking organizations exceeding certain asset thresholds, constituting a significant overhaul to existing foreign bank supervision in the United States.
The final rules implement a number of new requirements, including enhanced risk-based capital and leverage capital requirements, liquidity, risk management and stress testing requirements, a requirement to establish a U. Department of the Treasury released a report required by Dodd-Frank on the modernization and improvement of insurance regulation. The report recommends two types of improvements for the near term: 1 direct federal involvement in limited areas of insurance regulation, including the licensing of insurance agents and brokers and the regulation of mortgage insurance and 2 greater harmonization of state regulations.
On December 10, five U. In conjunction with the release of the final rules, the Federal Reserve issued an order providing a blanket one-year extension to the deadline to comply with the Volcker Rule. As a result, banking entities have until July 21, to conform their activities to the Volcker Rule. The OCC recently issued updated guidance to national banks and federal savings associations on assessing and managing risks associated with third-party relationships.
The Federal Reserve recently issued a proposed rule that would establish, for the first time, a standardized quantitative minimum liquidity requirement for large, internationally active banking organizations, as well as for certain systemically important nonbank financial companies designated by the Financial Stability Oversight Council for Federal Reserve supervision.
The liquidity proposal is based on a standard agreed to by the Basel Committee on Banking Supervision, but is more stringent in several respects than what is required under Basel III. Five federal banking and housing agencies and the SEC have released a proposed rule implementing the credit risk retention requirement mandated by Dodd-Frank for certain securitization transactions. The proposed rule revises and re-issues proposed rules originally issued by the Agencies on March 29, , and makes several key revisions to the original proposal.
The proposed rule also introduces sunset provisions to allow sponsors of asset-backed securities to transfer or hedge their retained interests after certain milestone dates, among other changes. In addition to the final approval of these new rules, in response to concerns relating to possible abuse of the offering flexibility afforded by the elimination of the prohibition on general solicitation and general advertising for certain private placements, the SEC proposed amendments to Rule that, if adopted, would impose new filing and disclosure requirements on private offerings made in reliance upon such rule.
Federal Reserve Adopts Final U. It replaces the general risk-based capital rules of the different banking agencies that currently apply to banking organizations with a single integrated regulatory capital framework that emphasizes not only higher capital cushions for banks to absorb losses but also more stringent criteria for what qualifies as regulatory capital.
The term is also relevant to filers of Form PF, a relatively new form that requires certain advisors to private funds to provide information regarding controlled portfolio companies that are predominately engaged in financial activities. The CFTC recently issued two no-action letters that provide last-minute relief for many derivative end-users with respect to trade reporting requirements under the Dodd-Frank Act. In addition, the CFTC provided relief from certain reporting requirements relating to Dodd-Frank swaps between affiliates.
The federal banking agencies have jointly issued guidance on leveraged lending activities by financial institutions. The new guidance updates and replaces guidance from more than a decade ago in light of changes in market practices and growth in the volume of leveraged credit. Guidelines for the purchase of participations involving leveraged loans also are included.
Recognizing the need to continue to support the worldwide economic recovery, while ensuring that global banks maintain liquid assets sufficient to meet their short-term cash needs during times of stress, members of this Basel oversight group supported a package that, among other things, extends the timetable for full phase-in of the LCR from to The proposed rules implement Sections and of the Dodd-Frank Act and, together with other rulemakings, would result in the most dramatic regulatory change in more than a decade for foreign banks with a U.
To mitigate the burden of this requirement, Dodd-Frank provides an exception to such clearing requirement for certain non-financial end-users. This memo discusses the final rule published by the CFTC, outlines which parties are eligible to take advantage of the end-user exception, and summarizes the procedures for making such election.
The panel will review existing rules on say-on-pay, golden parachutes and clawbacks; voting guidelines under the ISS; compensation arrangements; developing effective compensation strategies, risk assessments and benchmarking practices; and preparing for Dodd-Frank executive compensation provisions to take effect in The publication of these rules in the Federal Register—expected to occur in the near future—will trigger the effectiveness or the phase-in of many of the new derivatives regulations under Dodd-Frank such as reporting, recordkeeping, mandatory clearing, swap execution, business conduct and position limits.
A more detailed memo will follow upon the release of the text of these final rules. The SEC also amended Item e 3 of Regulation S-K to require the disclosure by listed issuers of any conflicts of interest of their compensation consultants. The CFTC has adopted final rules governing the recordkeeping and reporting of historical swaps—imposing comprehensive recordkeeping and reporting obligations on all historical swap counterparties, including end-users.
The historical swaps covered by these final rules encompass i swaps entered into before July 21, and still outstanding as of July 21, and ii swaps entered into on or after July 21, , but prior to the applicable compliance date set forth in the rules.
Counterparties to historical swaps would be well-advised to undertake a comprehensive review of both current and recently expired swap positions as well as consider updates to their recordkeeping policies and technological capabilities. Yesterday, the Federal Reserve issued a much-awaited proposal to restructure current regulatory capital rules for U. The following memorandum provides a high-level summary of the proposal. Read More. These new regulations establish a comprehensive testing methodology that swap and security-based swap counterparties must employ both to determine whether they will be subject to heightened regulation as a major participant and to establish whether they will be shielded from such requirements by a safe harbor.
To the extent that an entity satisfies any of the three alternative major participant tests, it will generally become subject to additional statutory and regulatory requirements, encompassing margin, capital, business conduct, recordkeeping, and reporting. The U. A person who is a Swap Dealer or Security-Based Swap Dealer generally must register with the CFTC or SEC, respectively, and will be subject to regulation on matters including capital and margin requirements, business conduct, reporting and recordkeeping, and position limits monitoring, among other provisions.
Last week, the Federal Reserve issued a statement of policy on the period of time banking entities have to bring their activities and investments into compliance with the Volcker Rule provisions of Dodd-Frank.
While the Volcker Rule becomes effective on July 21, , the key date is July 21, , which is the statutory deadline by which banking entities must conform their activities and investments to the Volcker Rule.
Comments on the proposed rule, which was published last week in the Federal Register, are due by March 31, The Volcker Rule, once effective, will prohibit banking entities from engaging in proprietary trading and from investing in or sponsoring private equity and hedge funds, subject to certain exceptions and transition considerations.
The agencies are seeking comment on the proposed rule until January 13, The Securities and Exchange Commission recently adopted amendments to remove investment grade criteria from the transaction eligibility requirements of Form S-3 and F These form and rule changes will generally become effective on September 2, On August 12, the Federal Reserve Board issued an interim final rule establishing regulations for savings and loan holding companies.
The regulations follow the recent transfer under the Dodd-Frank Act of supervisory and rulemaking authority for savings and loan holding companies and their nondepository subsidiaries from the Office of Thrift Supervision to the Federal Reserve Board.
Today, the Board of Governors of the Federal Reserve System approved its final rule regulating debit interchange fees and network exclusivity and routing, as well as its interim final rule on fraud-prevention adjustment, pursuant to Section of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
After receiving over 11, comments, the Board made significant changes to its proposed rule, including a substantial increase in allowable interchange fees. While Dodd-Frank enacted a framework for the new whistleblower program, it explicitly left it to the SEC to adopt specific rules and procedures for implementing the program. In November , the SEC released proposed rules and extensive commentary and solicited comments, prompting a flurry of letters from business interests and whistleblower advocates, especially over the question of whether the SEC should require that whistleblowers report wrongdoing through internal corporate compliance channels before becoming eligible for bounties under the whistleblower program.
The rules answer many of the uncertainties about the Dodd-Frank whistleblower program that have been lingering since the Dodd-Frank Act was signed into law last summer. On March 29, five federal banking and housing agencies, as well as the SEC, released proposed rules implementing the credit risk retention requirement mandated by Dodd-Frank for certain securitization transactions.
Special treatment is also provided for securities that are backed by qualifying commercial loans, commercial real estate loans and automobile loans. The SEC is soliciting comments on the proposed readoption through April 15, The proposed rules impose prohibitions on compensation arrangements that encourage inappropriate risks and also establish new reporting requirements.
The same rules are expected to be proposed by the other major banking and financial regulators, including the Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Securities and Exchange Commission.
What the official announcement left out was that the investigation into drug safety concerns at Glaxo began more than six years ago not with a subpoena or a customer who fell ill, but when a former Glaxo employee blew the whistle on quality control problems at a Glaxo plant.
But the record set by the Glaxo award might not last long. The proposed transition rules, which are subject to a day public comment period, implement provisions of the Volcker Rule that provide banking entities and certain other companies a defined period of time to conform their activities and investments to the Volcker Rule. This memorandum focuses on the provisions of the Act that alter the registration, reporting and recordkeeping obligations applicable to private funds and their advisers.
The registration, reporting and recordkeeping obligations become effective one year after the Act is enacted. Title XIV of the Act amends the Truth in Lending Act, the Equal Credit Opportunity Act, and other consumer financial laws to prevent mortgage-related abuses and to improve availability of responsible, affordable mortgage credit.
It addresses compensation-based incentives; inappropriate steering, discrimination, and other abusive, unfair, deceptive, or predatory practices; minimum federal lending standards; high-cost mortgages; mortgage servicing; and appraisals.
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