Amendments

SEC Adopts Amendments to Modernize Shareholder Proposal Rule

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On September 23, the Securities and Exchange Commission (SEC) adopted amendments to modernize the process for a shareholder to have its proposal included in a company’s proxy statement for consideration by all of the company’s shareholders. The amendments aim to ensure that shareholder-proponents demonstrate a sufficient economic stake or investment interest in a company before they are able to submit proposals to be included in a company proxy’s statement, paid for by all shareholders. Release.

Agencies Finalize Amendments to Swap Margin Rule

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On June 25, federal agencies finalized a rule that updates margin and capital requirements for banks and other entities with significant swap activities. The updated rule no longer requires entities that are part of the same banking organization to hold a specific amount of initial margin for uncleared swaps with each other, such swaps being known as inter-affiliate swaps. The changes to the swap margin rule also provide additional flexibility to allocate collateral internally. The final rule is intended to facilitate risk management and maintain existing safeguards. Release. Final Rule.

CFTC Seeks Public Comment on Proposed Whistleblower Rule Amendments

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On September 1, 2016, the U.S. Commodity Futures Trading Commission (“CFTC”) announced that it is “requesting public comment on proposed amendments to the Whistleblower Rules found in Part 165 of the CFTC’s regulations.” The amendments would, among other things, “enhance the process for reviewing whistleblower claims and make related changes to clarify staff authority to administer the whistleblower program.” Comments are due on or before September 29, 2016. Press release.

CFTC Extends Comment Period on Proposed Amendments to Regulation 4.22 Regarding CPO Annual Reports

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On August 30, 2016, the Commodity Futures Trading Commission extended the comment period for proposed amendments to a regulation regarding Annual Reports from commodity pool operators. Press release.

SEC Adopts Amendments to Form ADV

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On August 25,  2016, the Securities and Exchange Commission (SEC) adopted amendments to Form ADV that are designed to provide additional information regarding advisers, including information about their separately managed account business, incorporate a method for private fund adviser entities operating a single advisory business to register using a single Form ADV, and make clarifying, technical and other amendments to certain Form ADV items and instructions. The SEC also adopted amendments to the Investment Advisers Act of 1940 books and records rule.

In particular, the amendments to Part 1A of Form ADV are intended to provide a more efficient method for the registration on one Form ADV of multiple private fund adviser entities operating a single advisory business (“umbrella registration”). Although under existing staff guidance a large number of advisers have already been making umbrella registration filings, the method outlined in the staff guidance for filing an umbrella registration was limited by the fact that the form was designed for a single legal entity. These amendments are intended to eliminate confusion for filers and the public. Press release.

ESMA Publishes Final Report on Amendment of Draft RTS on Reporting Obligations under Article 26 of MiFIR

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On May 4, 2016, The European Securities and Markets Authority (ESMA) published its final report requesting an amendment of ESMA draft regulatory technical standards (RTS) on transaction reporting under the Markets in Financial Instruments Regulation (MiFIR).

The draft RTS were submitted to the European Commission in September 2015. However, ESMA has since identified a need to amend Article 2 of RTS 22 as a result of an unintentional omission in the final stage of drafting.

The amendment relates to the list of instances that are not considered to be reportable transactions for the purposes of Article 26 of MiFIR. It resolves an unintended omission by adding acquisitions or disposals that are solely a result of a transfer of collateral to the list of exclusions from transaction reporting specified in Article 2(5) of RTS 22. It thus ensures that investment firms are not required to submit transaction reports for transfers of collateral, which ESMA concluded would be costly and bring no supervisory benefit. ESMA anticipates that the amendment will be taken into account in the context of the Commission’s endorsement of RTS 22.

The Federal Reserve Board Issues Final Rule Adopting Amendments to the Board’s Regulatory Capital Rules for Non-Traditional Stock Corporations

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On December 4, 2015, the Board of Governors of the Federal Reserve System (the “Board”) issued a final rule adopting amendments to the Board’s regulatory capital framework (“Regulation Q”) that was issued in June 2013. The final rule provides examples of how to apply the framework to depository institution holding companies that are not organized as traditional stock corporations and how instruments issued by such firms may qualify as regulatory capital. The final rule also issued a temporary exclusion from Regulation Q for savings and loan holding companies that are trusts and depository institution holding companies that are employee stock ownership plans – until the Board can propose appropriate rules for such entities. In addition, the Board extended the applicable compliance date with the revised capital framework to July 1, 2016. The final rule will take effect on January 1, 2016. Press Release. Final Rule.

CFTC Amendments to Regulations Governing Investment of Customer Funds by DCOs and FCMs

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On December 5, the CFTC adopted amendments to Regulation 1.25 and Regulation 30.7, which govern the investment of customer and secured amount funds by derivatives clearing organizations (DCOs) and futures commission merchants (FCMs). The amendments address: (i) changes to the list of permitted investments, including the elimination of foreign sovereign debt and in-house transactions; (ii) a clarification of the liquidity requirement; (iii) the removal of rating requirements; and (iv) an expansion of concentration limits including asset-based, issuer-based, and counterparty concentration restrictions. The rule will be effective 60 days after the date of publication in the Federal Register. CFTC Q&A. CFTC Final Rules.