On June 8, the SEC approved the increase by FINRA of the Trading Activity Fee (TAF) rate for sales of covered equity securities from $0.000075 per share to $0.000090 per share, with a corresponding increase to the per-transaction cap from $3.75 to $4.50. The new rate will be effective on July 1. FINRA Notice.
Month: June 2011
Request for Comment on Stress Testing Guidance
On June 9, the Fed, OCC, and FDIC released proposed joint guidance on stress testing for banking organizations with more than $10 billion in consolidated assets. The proposed guidance provides an overview of how an organization should develop a structure for stress testing, outlines general principles for a satisfactory framework, describes how stress testing should be used at various levels within an organization, and emphasizes the importance of strong internal governance and controls in an effective stress-testing framework. Comments must be submitted by July 29. Joint Release. Proposed Guidance.
SEC Steps to Address Effective Date of Title VII of Dodd-Frank
On June 10, the SEC announced that it will take certain steps to clarify requirements applicable to security-based swap transactions as of July 16, which is the effective date of Title VII of the Dodd-Frank Act (which authorizes the SEC to regulate security-based swaps). These actions include providing temporary relief from certain provisions of Title VII, as well as from various pre-Dodd-Frank provisions of the Exchange Act. SEC Release.
SEC Proposed Rules on Registration Exemption for Security-Based Swaps
On June 10, the SEC proposed rules that would provide clearing agencies functioning as central counterparties with exemptions from the registration requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 for the security-based swaps they issue. Comments must be submitted by July 25. Press Release. Proposed Rules.
New Fannie Mae Servicing Standards
On June 6, Fannie Mae issued new standards for mortgage servicers under the FHFA’s Servicing Alignment Initiative relating to: (i) management of delinquent loans; (ii) default prevention; and (iii) foreclosure time frames. These standards are reinforced by new incentives and compensatory fees. Fannie Mae Release. Delinquency Management and Default Prevention Announcement. Foreclosure Time Frames and Compensatory Fee Announcement.
Extension of Proposed Risk Retention Rules Comment Period
On June 7, the Fed, FDIC, FHFA, HUD, OCC, and SEC extended the comment period deadline regarding their proposed rules to implement the credit risk retention requirements of Section 941of the Dodd-Frank Act from June 10 to August 1. Joint Release. Proposed Rule Extension.
Financial Executives International Committee on Benefits Finance
June 14, 2011 – Orrick Of Counsel Sarah Downie will be speaking on a panel titled, “The Dodd-Frank Act and its Impact on Benefits Executives,” during the FEI Committee on Benefits Finance 2011 Summer Meeting. Click here for more information.
Orrick’s Annual Financial Services Roundtable
June 14, 2011 – Orrick’s Global Employment Law Group and in-house counsel will host an interactive discussion of critical employment law issues impacting the financial services industry. Click here for more information and to RSVP.
FDIC Files Two Lawsuits Alleging Appraisal Fraud
On May 29, 2011, the FDIC, as receiver for Washington Mutual Bank (“WaMu”), filed complaints in the U.S. District Court for the Central District of California against two appraisal firms alleging negligence, breach of representations and warranties, and breach of contract. The complaints, filed against CoreLogic Valuation Services (formerly eAppraiseIT, LLC) and LSI Appraisal, LLC, allege that these firms provided WaMu with substantially inflated appraisal values, which induced WaMu to make mortgage loans it would not otherwise have made. The FDIC seeks at least $129 million from CoreLogic and $154 million from LSI. CoreLogic Complaint. LSI Complaint.
Citigroup Files New RMBS Action Against Impac
On May 25, 2011, Citigroup Global Markets, Inc. (“Citigroup”) filed a complaint against Impac Funding Corp (“Impac”) in the U.S. District Court for the Central District of California alleging violations of Sections 18 and 20 of the ’34 Act and negligent misrepresentation related to Impac’s filing of a revised Pooling and Servicing Agreement (“PSA”) with the Securities and Exchange Commission (“SEC”). Citibank alleges that three weeks after it purchased approximately $7 million worth of mortgage-backed securities, Impac notified the Securities and Exchange Commission that the Pooling and Servicing Agreement (“PSA”) filed three years earlier in connection with the issuance of those securities was submitted in error. Citibank alleges that Impac filed a new PSA with the SEC including different terms that adversely impacted on the value of the certificates purchased by Citigroup. Citigroup seeks to recover the money damages that it claims to have suffered as a result. Complaint.