Since the 2008 financial crisis, reforming money market funds has been the subject of high drama and intense scrutiny on Capitol Hill. Advocates for reform finally got their long awaited breakthrough last Wednesday, June 5, when the Securities and Exchange Commission voted unanimously to propose legislation that would reform money market funds. For more information and to visit our Securities Litigation blog, please click here.
Orrick Alert
Derivatives in Review
The Derivatives in Review highlights important legal, regulatory and other newsworthy developments in the area of derivatives. Please visit Orrick’s Derivatives in Review blog to see what was featured in the June edition.
Lehman Derivative Litigation Still Looms Large
The market’s attention is fixed firmly on the future of derivatives. Questions about the implementation and impact of the Dodd Frank requirements, and to what extent the use of swaps in structured finance and other transactions will return, are front and center. And yet, there are also lessons to be learned from the past use of these somewhat esoteric financial instruments, which continue to be questioned and tested in litigation — with more to come. Orrick covered this topic in an article recently published in Law360.
Bankruptcy Court Permits Patriot to Modify Union Agreements
Patriot Coal became the third major debtor in the last year to modify benefits or reject a CBA under sections 1113 and 1114 of the Bankruptcy Code. Following similar rulings in the Hostess and AMR Corporation bankruptcies, Bankruptcy Judge Kathy Surratt-States on May 29, 2013, granted Patriot authorization to modify agreements with the United Mine Workers of America and reject union CBAs. To read more about the court’s analysis and the impact of this ruling, please click here.
Did an Obscure Remark in a Recent Regulatory Publication Signal a New Interpretation of the Anti-Tying Rules?
In 2003, the Federal Reserve released its proposed interpretation of the anti-tying provisions of the Bank Holding Company Act Amendments, in which it stated that market power and anti-competitive effects were not necessary elements of an illegal tying arrangement. Despite substantial commentary on the Federal Reserve’s proposed interpretation from financial institutions and other regulators, including the Department of Justice, the Federal Reserve has not revised its proposed interpretation of the anti-tying provisions of the BHC Act. This alert discusses a recent regulatory publication raising the possibility that the Federal Reserve may be revisiting its earlier stance. For more information, please click here.
Multi-Agency Guidance on Leveraged Lending Practices
On March 21, 2013, federal bank regulators released final interagency guidance on leveraged lending. This alert provides an overview of the guidance and highlights certain differences between the final version of the guidance and the draft version that was proposed in 2012. For more information, please click here.
The Extra-Territorial Reach of the Broker-Dealer Registration Requirements Under the U.S. Securities Exchange Act of 1934
This alert provides an overview of the Staff of the Securities and Exchange Commission’s address of frequently asked questions regarding Rule 15a-6 and foreign broker-dealers. For more information, please click here.
London Stock Exchange High Growth Segment – An Interesting Halfway House but
This alert provides an overview of the High Growth Segment of the London Stock Exchange’s (the Exchange) Main Market, key eligibility requirements for admission and key continuing obligations. For more information, please click here.
Final Regulations Implementing the Foreign Account Tax Compliance Act
On January 17, 2013, the Internal Revenue Service (IRS) released final regulations (the Final Regulations) implementing the reporting and withholding provisions of the HIRE Act (commonly known as the Foreign Account Tax Compliance Act, or FATCA, provisions) that target noncompliance by U.S. taxpayers using foreign accounts. The Final Regulations build on proposed regulations published on February 15, 2012, to provide additional certainty for financial institutions and government counterparts by finalizing the step-by-step process for U.S. account identification, information reporting and withholding requirements for foreign financial institutions (FFIs), non-financial foreign entities (NFFEs) and U.S. withholding agents. For more information, please click here.
Tax Law Update: House Ways & Means Proposals for Financial Products Tax Reform
On January 24, the House Committee on Ways & Means released a discussion draft of legislative provisions (the “Draft”) that would make fundamental changes in the taxation of certain financial products, including the treatment of derivatives held by non-dealers by requiring that they be marked to market annually with gain or loss treated as ordinary income or loss. These changes would likely be controversial. The Draft also proposes changes to the tax code eliminating cancellation of debt income for certain debt exchanges and modifying the taxation of market discount on distressed debt that would likely be welcomed by the business community. Click here to read the full Tax Law Update.