On June 27, 2016, the Securities and Exchange Commission announced that it adopted rules, mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, to require resource extraction issuers to disclose payments made to governments for the commercial development of oil, natural gas or minerals. The rules are intended to promote greater transparency regarding payments related to resource extraction. Release. Final Rule.
Elizabeth Elias, a Senior Associate in Orrick’s New York office, represents issuers and investors in bespoke, esoteric asset-backed securities transactions in both the 4(a)(2) and Rule 144A markets.
She has extensive experience in the securitization of commercial PACE liens, music, TV and other intellectual property rights, whole businesses, diamond receivables, litigation settlement awards, and PDP oil & gas wellbore interests.
Elizabeth’s experience further extends to representation of a variety of market participants, including sponsors, issuers, underwriters and service providers, in public and private offerings of commercial mortgage-backed securities.Posts by: Elizabeth J. Elias
Rating Agency Developments
SEC Adopts Amendment to Form 10-K
On June 1, 2016, the Securities and Exchange Commission (SEC) approved an interim final rule implementing Section 72001 of the Fixing America’s Surface Transportation (FAST) Act. The rule allows Form 10-K registrants to provide a summary of business and financial information contained in the annual report, provided that each item in the summary includes a cross-reference by hyperlink to the material contained in the Form 10-K to which such item relates. The rule will become effective once published in the Federal Register. Rule. Press Release.
FHFA Increases 2016 Multifamily Lending Caps
On May 4, 2016, the Federal Housing Finance Agency announced that it increased its 2016 multifamily lending caps for Fannie Mae and Freddie Mac from $31 billion to $35 billion. The increase is based on growing estimates of the overall size of the multifamily finance market. Release.
Agencies Propose Net Stable Funding Ratio Rule
On May 3, 2016, the Federal Deposit Insurance Corporation, the Federal Reserve and the Office of the Comptroller of the Currency proposed a rule, the net stable funding ratio (the “NSFR”), to strengthen banks by requiring them to maintain a minimum level of stable funding relative to the liquidity of their assets, derivatives and commitments over a one-year period. The most stringent of the NSFR’s requirements would apply to, among others, banking organizations with $250 billion or more in total consolidated assets. The NSFR would become effective January 1, 2018. Release. Proposed Rule.
CFTC Amends Swap Portfolio Reconciliation Requirement
On May 2, 2016, the U.S. Commodity Futures Trading Commission approved a final rule to amend the swap portfolio reconciliation requirement. Under CFTC Regulation 23.500(i), swap dealers and major swap participants were required to exchange all terms of swaps with their counterparties as part of the portfolio reconciliation exercise, but were only required to reconcile the material terms of swaps. Amendments to the definitions of “portfolio reconciliation” and “material terms” now make it so that swap dealers and major swap participants need only exchange the material terms of swaps, so that the terms that are required to be exchanged are the same as those terms required to be reconciled. Release.
Rating Agency Developments
On May 3, 2016, DBRS published its rating methodology for pooled aircraft lease securitizations. Report.
On May 3, 2016, DBRS published its master U.S. ABS surveillance methodology. Report.
On May 3, 2016, S&P published its rating methodology for counterparty instruments. Report.
On April 29, 2016, Moody’s updated its rating methodology for global title insurers. Report.
On April 29, 2016, Moody’s updated its rating methodology for global reinsurers. Report.
On April 29, 2016, Moody’s updated its rating methodology for financial guarantors. Report.
On April 29, 2016, Moody’s updated its rating methodology for global trade credit insurers. Report.
On April 29, 2016, Moody’s updated its rating methodology for global life insurers. Report.
On April 29, 2016, Moody’s updated its rating methodology for global property and casualty insurers. Report.
On April 29, 2016, Moody’s updated its rating methodology for mortgage insurers. Report.
On April 29, 2016, Moody’s updated its rating methodology for U.S. health insurance companies. Report.
On April 29, 2016, DBRS published its rating methodology for Canadian structured finance transactions. Report.
Rating Agency Developments
On April 13, Moody’s published its approach to rating obligations with variable promises, where the source of variation is related to non-standard or non-credit-related reference factors. Report.
On April 7, Fitch published its criteria for rating tender option bonds. Report.
On April 7, Fitch published its criteria for rating Mexican residential mortgage-backed securities (RMBS). Report.
On April 7, DBRS published its criteria for rating companies in the television broadcasting industry. Report.
On April 7, DBRS published its criteria for rating companies in the radio broadcasting industry. Report.
On April 7, DBRS published its criteria for rating companies in the printing industry. Report.
On April 7, DBRS published its criteria for rating companies in the publishing industry. Report.
No-Action Relief Regarding Masking Information Reportable under the OCR Final Rule
On April 8, the U.S. Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight issued a no-action letter regarding the masking of information reportable under the ownership and control final rule (the “OCR Final Rule”). The no-action letter permits reporting parties with reporting obligations on OCR Forms 102A and 102B to mask certain identifying information, subject to conditions, until the earlier of: (i) a reporting party no longer holding the requisite reasonable belief regarding the privacy law consequences of reporting; and (ii) March 1, 2017. Release.
No-Action Letter Issued Regarding the OCR Final Rule
On April 8, the U.S. Commodity Futures Trading Commission’s (“CFTC”) Division of Market Oversight issued a no-action letter regarding the ownership and control final rule (the “OCR Final Rule”). The OCR Final Rule requires the electronic submission of trader identification and market participant data on new and updated forms. The no-action letter extends certain relief previously provided and is intended to provide improvements in the reliability and consistency of the OCR data submitted to the CFTC. Release.