New York Appellate Court Upholds ACA’s Fraud Suit Against Goldman Sachs

On August 18, 2015, the New York Appellate Division’s First Department held that ACA Financial Guaranty Corp. adequately pled its fraud suit against Goldman Sachs Group Inc.  A four-judge panel held that ACA sufficiently alleged that Goldman Sachs’ allegedly false statements about hedge fund Paulson & Co.’s short position on the Abacus collateralized debt obligation transaction were material, that the statements were made with the requisite intent, and that ACA would not have provided the financial guaranty for the deal had it known the truth.  The case had been remanded from the New York Court of Appeals, which had overturned the First Department’s prior decision to grant Goldman Sachs’ motion to dismiss.  Order.

Rating Agency Developments

On August 18, Moody’s extended comment period on proposed clearing house global rating methodology to September 17, 2015.  Announcement.

On August 17, Fitch released its updated corporate rating methodology.  Methodology.

On August 13, DBRS published its updated methodology for rating project finance.  Methodology.

On August 13, DBRS published its updated methodology for rating companies in the independent power producer industry.  Methodology.

CFTC Extends No-Action Relief on the Applicability of Transaction-Level Requirements for Non-U.S. Swap Dealers

On August 13, 2015, CFTC Division of Swap Dealer and Intermediary Oversight, Clearing and Risk, and Market Oversight extended a time-limited no-action relief to swap dealers registered with the CFTC that are established under the laws of jurisdictions other than the United States for certain transaction-level requirements under the Commodity Exchange Act. Subject to certain limitations, the relief has now been extended until the earlier of September 30, 2016 or the effective date of any CFTC action with respect to applicability of the transaction-level requirements in certain situations specified in the no-action letter.  Press ReleaseNo Action Letter.

Treasury Extends Comment Period on Marketplace Lenders RFI

On August 18, the Treasury Department extended the comment period for responding to the Request for Information (RFI) on marketplace lending titled “Public Input on Expanding Access to Credit through Online Marketplace Lending” by 30 days. The comment period will now end on September 30, 2015.  Treasury Note.

CFTC Issues Its First Ever Order of Exemption from Registration as a Derivatives Clearing Organization

On August 18, CFTC issued an order of exemption from registration as a derivative clearing organization (DCO) to ASX Clear (Futures) Pty Limited (ASX). The order is the first of its kind issued by CFTC based on its authority under Section 5b(h) of the Commodity Exchange Act. The provision permits CFTC to exempt a clearing organization from DCO registration if it determines that such organization is subject to comparable and comprehensive supervision by appropriate government authorities in the organization’s home country.  Press Release.

CFTC Issues Proposed Amendments to Swap Data Recordkeeping and Reporting Requirements for Cleared Swaps

On August 19, The U.S. Commodity Futures Trading Commission (CFTC) proposed amendments to existing rules relating to swap data reporting in connection with cleared swaps. The amendments are aimed at providing additional clarity to swap counterparties and registered entities regarding their reporting obligations and improving efficiency of data collection and maintenance associated with the reporting. The comment period for the proposed amendments will be 60 days after publication in the Federal Register.  Press ReleaseRule.

CFPB Study Finds Electronic Mortgage Closings Can Benefit Consumers

On August 4, the CFPB published a report on its “Know Before You Owe” eClosing project which found that borrowers can benefit from electronic closings when navigating the mortgage closing process.  Specifically, the results of the pilot indicate that those who closed their mortgage using an electronic platform are generally better off on measures of understanding, efficiency, and feeling empowered than borrowers who used just paper forms.  ReleaseReport.