On October 19, the Fed, as required by the Dodd-Frank Act, issued a report on the potential impact of risk retention on the securitization markets. The report highlights differences between securitizations backed by different types of assets and recommends that these differences be taken into account by the regulatory agencies when developing risk retention requirements. Fed Release. Fed Report.
Dodd-Frank Act
SEC Interim Rule on Reporting for Security-Based Swaps
On October 13, the SEC adopted an interim final temporary rule, as required by the Dodd-Frank Act, requiring certain swaps dealers and other parties to report any security-based swaps entered into before July 21, the terms of which had not expired as of that date. The rule will remain in effect until the earlier of the operative date of the permanent recordkeeping and reporting rules for security-based swap transactions to be adopted by the SEC or January 12, 2012. Comments to the rule should be submitted within 60 days after publication in the Federal Register. SEC Interim Rule.
SEC Proposed Rules on Issuer Review of Assets in ABS Offerings
On October 13, the SEC proposed new rules, as required by the Dodd-Frank Act, with respect to an issuer’s review of assets in ABS offerings. The SEC proposed: (i) a requirement that any issuer registering an offering or sale of ABS performs a review of the underlying assets, (ii) amendments to Item 1111 of Reg AB requiring an ABS issuer to disclose the nature of its review of the underlying assets and its findings and conclusions, and (iii) a requirement that issuers or underwriters of ABS disclose information as to third-party due diligence providers. Comments on the proposed rules should be submitted by November 15. SEC Proposed Rule.
FDIC Proposed Rule on Dodd-Frank Resolution Authority
On October 12, the FDIC issued a notice of proposed rulemaking for a rule clarifying how the FDIC would treat certain creditor claims under the new liquidation authority, established under the Dodd-Frank Act, for financial companies whose insolvency would pose a significant risk to the financial stability of the United States. Comments are requested on: (i) specific issues related to creditor claims (due within 30 days of publication of the NPR in the Federal Register) and (ii) broader questions to inform future rulemaking on orderly liquidation by the FDIC under the Dodd-Frank Act (due within 90 days of publication of the NPR in the Federal Register). FDIC Release. FDIC Proposed Rule. FDIC Board Memorandum.
SEC Dodd-Frank Act Progress
The SEC posted a link of its accomplishments to date and its upcoming activity in connection with the Dodd-Frank Act. SEC Release.
CFTC Implementation of Swap Regulations under Dodd-Frank
On September 16, CFTC Chairman Gary Gensler provided an update on the CFTC’s efforts to implement the Dodd-Frank Act for regulation of the swap marketplace. Chairman Gensler addressed four broad areas: (i) regulating the dealers, (ii) requiring standardized swaps to trade on exchanges or execution facilities, (iii) requiring that standardized derivatives be cleared through central clearinghouses, and (iv) a new registration category called swap data repositories. CFTC Release.
SEC Temporary Rule for Municipal Advisors
On September 2, the SEC adopted a temporary rule that requires municipal advisors to register with the SEC by October 1, as required by the Dodd-Frank Act. The registration can be completed on the SEC website. SEC Release.
FDIC Open Door Policy for Regulatory Reform Rulemaking
On August 12, the FDIC announced an open door policy to make it easier for the public to comment on and track the rulemaking process as it implements reforms required by the Dodd-Frank Act. The FDIC will hold a series of roundtable discussions on implementation issues and will allow any interested party to request a meeting with FDIC officials. In addition, the FDIC will release, on a bi-weekly basis, the names and affiliations of private sector individuals who meet with senior FDIC officials to discuss implementation, and the subject matter of these meetings. The FDIC will also publish notices on major developments, bill summaries, and fact sheets to provide updated information about policy decisions. Release.
FDIC Organizational Changes to Implement Regulatory Reform
On August 10, the FDIC approved the creation of a new Office of Complex Financial Institutions (OCFI) and Division of Depositor and Consumer Protection (DCP) to help carry out its responsibilities under the Dodd-Frank Act. The CFI will review and oversee bank holding companies with more than US$100 billion in assets, as well as non-bank financial companies designated as systemically important by the new Financial Stability Oversight Council. It will also be responsible for carrying out the FDIC’s new authority under the Act to implement orderly liquidations of bank holding companies and non-bank financial companies that fail. The establishment of the DCP is intended to provide increased visibility to the FDIC’s compliance examination and enforcement program. FDIC Release.
Dodd-Frank Act: SEC Developments
On July 23, the SEC updated its interpretation of the Securities Act of 1933 to indicate that Section 413(a) of the Dodd-Frank Act, which changes the net worth standard for an accredited investor as set forth in Regulation D of the Securities Act, is effective immediately. SEC Compliance and Disclosure Interpretations: Securities Act Rules.
On July 27, the SEC announced that it will accept comments on the relevant provisions of the Dodd-Frank Act at this time, before the agency even proposes its regulatory reform rules and amendments. This new process is intended to provide expanded opportunity for public comment and greater transparency and accountability. SEC Release regarding comments.