Joint Agency Release on S.A.F.E. Act Mortgage Originator Requirements

On July 28, the OCC, Fed, FDIC, OTS, Farm Credit Administration and National Credit Union Administration issued final rules requiring certain mortgage loan originators to meet the registration requirements of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E.).  The final rules are effective October 1 and the agencies anticipate that the registry could begin accepting federal registrations as early as January 28, 2011. Joint Release. Federal Register Notice and Final Rules.

Basel Committee Reaches Agreement on Capital and Liquidity Reform Package

On July 26, the Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, announced that it has reached agreement on the overall design of the Basel Committee’s capital and liquidity reform package. In particular, this includes the definition of capital, the treatment of counterparty risk, the leverage ratio, and the global liquidity standard. Basel Release.

Obama Administration Announces Conference on Housing Reform

On July 27, the Obama Administration announced it will host a “Conference on the Future of Housing Finance” on August 17 at the Treasury Department. The conference will assemble academic experts, consumer and community organizations, industry groups, market participants, and other stakeholders for an open discussion about housing finance reform. The Administration seeks to provide Congress with a comprehensive housing finance reform proposal by January 2011, and will use over 300 comment letters received in response to Treasury and HUD’s solicitation of public comment on the future of the housing finance system to help develop its proposal.  Treasury Release. 

Note: To search for the Comment Letters on the website provided in the Treasury Release, please select “Public Submissions” under the Document Type drop-down menu, and search for keywords “housing finance”.

Dodd-Frank Act: SEC Developments

On July 23, the SEC updated its interpretation of the Securities Act of 1933 to indicate that Section 413(a) of the Dodd-Frank Act, which changes the net worth standard for an accredited investor as set forth in Regulation D of the Securities Act, is effective immediately. SEC Compliance and Disclosure Interpretations: Securities Act Rules.    

On July 27, the SEC announced that it will accept comments on the relevant provisions of the Dodd-Frank Act at this time, before the agency even proposes its regulatory reform rules and amendments. This new process is intended to provide expanded opportunity for public comment and greater transparency and accountability. SEC Release regarding comments.

Rating Agency Developments

On July 19, Moody’s released guidance on its approach to global standard adjustments in the analysis of financial statements of banks, securities firms and finance companies. Moody’s Release. FAQs.

On July 22, Moody’s released its updated methodology for rating government-related issuers. Moody’s Release.

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BoE Updates Collateral Eligibility and Disclosure Rules

On July 19, the Bank of England released a Market Notice stating that it intends to include portfolios of loans to individuals and non-banks as eligible collateral for its Discount Window Facility, and that the eligibility requirements for ABS and covered bonds will be expanded to include enhanced disclosure of loan level and transaction information.  The expansion of eligible collateral is intended to occur during 2011, and there will be an implementation period of 12 months following the publication of detailed requirements regarding the enhanced disclosure. BoE Market Notice.

SEC Investor Advisor Disclosure Changes

On July 21, the SEC adopted changes to the principal disclosure document that SEC-registered investor advisors must provide to their clients and prospective clients.  The amendments are designed to provide clients with more information about investment advisors and will be effective 60 days after publication in the Federal Registrar. SEC Release.

SEC Proposal on Fund Distribution Fees

On July 21, the SEC proposed measures aimed to improve the regulation of 12b-1 mutual fund distribution fees and provide better disclosure for investors.  The proposal would limit fund sales charges, improve transparency of fees, encourage retail price competition, and revise fund director oversight duties.  Comments may be submitted for 90 days following publication of the proposal in the Federal Register. SEC Release.

SEC Life Settlements Task Force Report

On July 22, the SEC Life Settlements Task Force released a staff report indicating that life settlements should be defined as securities in order to protect investors in life settlement transactions under federal securities laws.  In conjunction with the report, the SEC also released an investor bulletin which provides basic information about life settlements and some of the risks these types of transactions may pose for investors. SEC Release. Life Settlements Task Force Staff Report. Investor Bulletin.