Posts by: Jill Pritzker

SEC Proposes Rule to Enhance Regulation of Use of Derivatives

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On November 25, the Securities and Exchange Commission (SEC) voted to propose new rules and rule amendments to update the existing regulations on the use of derivatives by registered investment companies and business development companies. The proposed rule change would regulate the ability of certain funds to enter into derivatives transactions creating future payment obligations in order to obtain leverage, subject to certain risk limitations. The SEC also proposed new sales practice rules: Rule 15a-2 under the ’34 Act and Rule 211(h)-1 under the Investment Advisers Act of 1940. There will be an open comment period on the proposed rules for period of 60 days. Release. Proposed Rule.

FHFA Instructs Federal Home Loan Banks to Transition Away From Purchase of LIBOR-Tied Assets

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On September 27, the Federal Housing Finance Agency (FHFA) instructed the Federal Home Loan Banks to stop practice of purchasing any investments with assets tied to LIBOR with maturities beyond December 31, 2021, as part of the transition away from LIBOR. As of March 31, 2020, according to the FHFA policy, Federal Home Loan Banks will be restricted from entering into all other LIBOR-based transactions, subject to certain limited exceptions. Release.

SEC Proposes to Modernize Disclosures of Business, Legal Proceedings and Risk Factors Under Regulation S-K

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On August 8, the SEC announced that it has voted to propose rule amendments to modernize and simplify certain disclosures required pursuant to Regulation S-K since the regulation was first adopted over 30 years ago. The proposal addresses Items 101(a) (description of the general development of the business), 101(c) (the narrative description of the business) and 105 (risk factors). The proposal has a 60-day public comment period following the proposal’s publication in the Federal Register. Release. Proposal.

Rating Agency Developments

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On April 9, Fitch published a report entitled: “U.S. Credit Card ABS Performance Mixed.” Report.

On April 8, Fitch published a report entitled: “U.S. CMBS Delinquency Rate Posts Increase in March.” Report.

On April 4, S&P published criteria and guidance reports entitled: “Structured Finance – ABS: U.S. FFELP Student Loan ABS: Methodology and Assumptions.” Criteria. Report.

Federal Reserve Board Releases Scenarios for 2019 Stress Test Exercises

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On February 5, the Federal Reserve Board and Office of Comptroller of Currency released the stress scenarios for the 2019 stress test cycle for domestic bank holding companies and foreign bank intermediate bank holding companies with more than $100 billion in total consolidated assets. Banks are required to submit the results of their stress tests to the Federal Reserve by April 5, and the Federal Reserve will release results of its supervisory stress tests by June 30. The Federal Reserve Board announced that banks with consolidated assets between $100 and $250 billion will be relieved from the 2019 cycle. Release.