On October 29, the Consumer Financial Protection Bureau (CFPB) issued a final rule amending its disclosure of records and information regulation. The new rule intends to increase protection of confidential information and improve clarity and transparency with agency partners and others. Final Rule.
On September 14, 2016, Governor Jerry Brown approved an amendment to the California Government Code, effective January 1, 2017, that requires a “public investment fund,” defined to mean “any fund of any public pension or retirement system, including that of the University of California,” to make certain disclosures at least annually concerning investments in each “alternative investment” vehicle in which it invests. An “alternative investment vehicle” is defined to mean “the limited partnership, limited liability company, or similar legal structure through which a public investment fund invests in an alternative investment.” An “alternative investment,” in turn, means an investment in a private equity fund, venture fund, hedge fund, or absolute return fund.”
Such disclosures include: (i) the fees and expenses that the public investment fund pays directly to the alternative investment vehicle, the fund manager or related parties; (ii) the public investment fund’s pro rata share of fees and expenses not included in (i) that are paid by the alternative investment vehicle; (iii) the public investment fund’s pro rata share of carried interest distributed to the fund manager or related parties; and (iv) the public investment fund’s pro rata share of aggregate fees and expenses paid by all of the portfolio companies held within the alternative investment vehicle to the fund manager or related parties.
These disclosure requirements are in alignment with: (i) enforcement actions brought by the Securities and Exchange Commission over the past several years against private fund managers for failure to adequately disclose conflicts of interest and the fees and expenses borne by investors in their funds; (ii) similar legislative initiatives in other states; and (iii) the publication by the Institutional Limited Partners Association of a proposed reporting template that captures greater detail on fees, expenses and carried interest paid to private fund managers and their affiliates.
On August 25, 2016, the Securities and Exchange Commission requested “public comment on disclosure requirements in Subpart 400 of Regulation S-K, including those relating to management, certain security holders, and corporate governance matters.” Press release.
On June 16, 2016, the Securities and Exchange Commission (“SEC”) announced that it had proposed rules to update the disclosure requirements for mining properties. The proposed revisions are meant to align disclosure requirements with “current industry and global regulatory practices and standards.” The proposed rules would, among other updates, revise Regulation S-K to include in a new subpart the SEC’s mining property disclosure requirements. The proposed rules would also rescind Industry Guide 7. Release.
On April 15, 2016, the Securities and Exchange Commission began seeking comment on specific disclosure requirements in Regulation S-K. Release.
On November 16, the CFPB amended Regulation Z (Truth in Lending) to delay certain disclosure requirements in the Dodd-Frank Act that would otherwise take effect on January 21, 2013. The CFPB plans to implement these disclosures as part of the integrated mortgage disclosure forms proposed earlier this year which combine certain disclosures that consumers receive in connection with applying for and closing on a mortgage loan under the Truth in Lending Act and the Real Estate Settlement Procedures Act. CFPB Release. CFPB Rule.
On December 1, Bankruptcy Rule 2019 became effective. This rule relates to the disclosure requirements in Chapter 9 and Chapter 11 cases for holders of distressed loans and eliminates the requirement for the disclosure of the price paid for a claim in bankruptcy and the date the claim was acquired (except in very limited circumstances) in Rule 2019 verified statements. Rule 2019.
On November 3, the MSRB filed amendments to its proposal regarding the duties of underwriters of municipal securities to state and local governments. The amendments would enhance certain disclosure requirements for underwriters as well as clarify the risk disclosure requirements of the proposal. Comments on the proposal should be submitted to the SEC. MSRB Release. MSRB Amendments.
