On March 13, the Office of Compliance Inspections and Examinations (OCIE) of the SEC issued a National Exam Program Overview setting forth OCIE’s examination results for 2011 as well as detailing the strategic areas upon which the OCIE will focus its 2012 examination efforts for investment companies, investment advisers, broker-dealers, self-regulatory organizations, credit rating agencies, clearance and settlement programs, and coordination with other regulators. National Exam Program Overview.
Month: March 2012
Eurozone Crisis Continued – Second Greek Bailout package, etc.
The Eurozone crisis continues to dominate the headlines with the IMF approving its €28 Billion contribution to a second bailout package for Greece on 15 March 2012. Click here to read the IMF Press Release.
As suggested in our December 2011 Client Briefing Eurozone Crisis: Will Europe Win the Battle? – Practical Advice to Address Your Redenomination Risks, we are now seeing a subtle shift in the position of market participants towards the consideration of the implications of either the exit of one or more of the member states or alternatively, albeit more unlikely, the complete collapse of the Euro. It is not surprising given the current news backdrop that a number of counterparties are considering their financial and legal redenomination risks, including a consideration of their LMA-based facility agreements and change of currency clauses and the knock-on effects of an amendment to such clauses within loan arrangements.
SEC Oversight Cooperation Arrangements with Foreign Regulators
On March 23, the SEC issued two memoranda of understanding (“MOUs”), agreed to with each of the Cayman Islands Monetary Authority (“CIMA”) and the European Securities Markets Authority (“ESMA”) as part of its long-term strategy to improve the oversight of regulated cross-border entities. The memoranda seek to foster better information sharing among the regulators about investment advisers, investment fund managers, broker-dealers and credit rating agencies. SEC Release. EMSA MOU. CIMA MOU.
CFTC No-Action Letter on Reporting
On March 22, the CFTC issued a letter to market participants providing temporary and conditional no-action relief for less than fully compliant reporting under the CFTC’s large trader reporting system for physical commodity swaps and swaptions. This relief is intended to give sufficient time for the industry and the CFTC to have fully compliant reporting by July 2. CFTC Release.
FSA Business Plan
On 22 March 2012, the FSA published its Business Plan for 2012/13. It sets out the key priorities and identifies implications for the FSA’s budget. The plan covers:
• delivering the regulatory reform programme (including the introduction of a twin-peaks model operating within the FSA from 2 April 2012 – the objectives to be closely aligned with those of the Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”));
• influencing the international & European policy agendas;
• delivering financial stability (including the implementation of CRD IV and Solvency II in the UK);
• delivering market confidence (including work on the EU markets legislative proposals and strengthening the FSA’s client assets regime);
• delivering consumer protection and combating financial crime;
The FSA will hand over responsibility for prudential regulation to the PRA and conduct regulation to the FCA in the first half of 2013.
MSRB Publication of Inter-Dealer Yield Data for Municipal Securities Transactions
On March 21, the MSRB received approval from the SEC to display price and yield data from inter-dealer municipal securities transactions on the EMMA website, which currently only displays yield data for municipal securities transactions between dealers and customers. Data from inter-dealer municipal securities transactions will be published on the EMMA website beginning April 30. MSRB Release.
FDIC Extension of Comment Period on Stress Test Rule
On March 21, the FDIC extended the comment period on its proposed rule to require state, non-member banks and savings associations with more than $10 billion in consolidated assets to conduct annual stress tests, pursuant to Section 165 of the Dodd-Frank Act. Comments must now be submitted by April 30. FDIC Release. Proposed Rule Extension.
FDIC Proposed rule on Assessment Rates
On March 20, the FDIC proposed a rule to modify the deposit insurance assessment system for insured depository institutions with more than $10 billion of assets. The proposed rule would amend the definitions of leveraged loans and subprime loans used to identify concentrations of higher-risk assets, without materially affecting the overall assessments that large institutions pay. Comments must be submitted within 60 days of publication in the Federal Register. FDIC Release. FDIC Rule on Assessment Rates.
FDIC Proposed Rule on Receivership Powers
On March 20, the FDIC proposed a rule, pursuant to section 210(c)(16) of the Dodd-Frank Act, that would permit the FDIC as receiver for a failed systemically important financial institution to enforce and prevent termination of the contracts of the institution’s subsidiaries or affiliates. Comments must be submitted within 60 days of publication in the Federal Register. FDIC Release. FDIC Rule on Receivership.
OCC Testimony on Foreclosure Enforcement Orders
On March 19, the OCC’s Deputy Comptroller for Large Bank Supervision Morris Morgan testified before the House Committee on Oversight and Government Reform about the comprehensive enforcement orders about mortgage servicing and foreclosure deficiencies. Oral Statement. Written Testimony.