United States

The LIBOR Transition — What US municipal securities issuers should know

The UK Financial Conduct Authority has warned that the London Interbank Offered Rate (LIBOR) is not likely to be published after 2021. What will happen to LIBOR-based municipal securities, loans, and derivatives that extend beyond 2021, if and when LIBOR goes away? The contracts could be remediated by pending New York and possible federal LIBOR … Continue Reading

Capital treatment of securitisations of non-performing loans

On 26 November 2020, the Basel Committee on Banking Supervision published a technical amendment ‘Capital treatment of securitisations of non-performing loans’. The technical amendment closes a gap in the Basel framework by setting out prudent and risk sensitive capital requirements for non-performing loan securitisations. The Basel Committee has agreed to add the following elements to … Continue Reading

Global comparative guide – Senior management responsibility in financial services

We have updated our cross border comparative guide on individual accountability which is located on the NRF Institute. The comparative guide, Senior management responsibility in financial services, allows clients to better understand how senior management responsibility in different types of financial services firm other than insurers is being treated in different jurisdictions around the world. … Continue Reading

FSB examines financial stability implications of climate change

On 23 November 2020, the Financial Stability Board (FSB) published a report that discusses the potential implications of climate change for financial stability. It investigates channels through which climate-related risks might impact the financial system. The report: Sets out the ways in which physical and transition risks from climate change can affect financial stability, as … Continue Reading

Leaders’ Declaration – G20 Riyadh Summit

On 22 November 2020, the G20 leaders issued a declaration following their summit in Riyadh on 21 – 22 November 2020. Paragraphs 16 to 18 of the declaration cover financial sector issues. Key points include: The pandemic has reaffirmed the need to enhance global cross-border payment arrangements to facilitate cheaper, faster, more inclusive and more … Continue Reading

FSB sets out progress on interest rate benchmark reform

On 20 November 2020, the Financial Stability Board (FSB) published a progress report on implementation of reforms to major interest rate benchmarks. Among other things the report notes: Production of LIBOR cannot be guaranteed after the end of 2021. The administrator of LIBOR, ICE Benchmark Administration, has recently announced that it will consult on its … Continue Reading

IOSCO final report – thematic review on consistency in implementation of money market funds reforms

On 20 November 2020, the International Organisation of Securities Commissions (IOSCO) published a diagnostic report analysing the events that occurred in the money market funds (MMFs) sector during the market turmoil in March 2020. At the same time, IOSCO has also published a thematic review assessing the implementation of selected IOSCO recommendations issued in 2012 … Continue Reading

US SEC amends rules to simplify and expand the exempt offering framework

On November 2, 2020, in an effort to harmonize and modernize the exempt offering framework under the Securities Act of 1933 (the Securities Act), the US Securities and Exchange Commission (SEC) adopted a final rule entitled “Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets.” In a new legal … Continue Reading

FSB highlights need for resolution preparedness

On 18 November 2020, the Financial Stability Board (FSB) published its 2020 Resolution Report. In relation to banks the report notes that global systemically important banks (G-SIBs) are estimated to already meet the final 2022 minimum external total loss absorbing capacity (TLAC) requirement. While disclosure of external TLAC levels by G-SIBs has improved over the … Continue Reading

MiCA: Regulating provision of services in crypto-assets

On September 24, 2020 the European Commission published its long-anticipated Digital Finance package, comprising legislative proposals and non-legislative communications. One of the legislative proposals published included a draft regulation on markets in crypto-assets (MiCA). MiCA is the first European-level legislative initiative aiming to introduce a harmonized and comprehensive framework for the issuance, application and provision … Continue Reading

FSB acts to address issues highlighted by March market turmoil

On 17 November 2020, the Financial Stability Board (FSB) published a letter from its Chair and two reports delivered to G20 Leaders ahead of their summit this week: Chair’s letter. The letter sets out three responses to financial stability vulnerabilities highlighted by the COVID-19 pandemic: (i) coming to a shared diagnosis – the market turmoil … Continue Reading

Monthly Global FinTech regulatory updater

Every month we provide the Global Blockchain Business Council’s Post-Trade Distributed Ledger group with a global regulatory FinTech updater, the latest version of which can be found here. Post Trade Distributed Ledger (PTDL) Group is composed of over 40 prominent market infrastructure stakeholders whose shared vision of the use of distributed ledger technology has brought … Continue Reading

FSB releases guidance on CCP financial resources for resolution and announces further work

On 16 November 2020, the Financial Stability Board (FSB) published final guidance on financial resources to support central counterparty (CCP) resolution and on the treatment of CCP equity in resolution. Ensuring the availability of adequate resources and tools for CCP resolution and understanding the potential for certain resources and tools to have an adverse effect … Continue Reading

FSB publishes annual report on implementation and effects of financial regulatory reforms

On 13 November 2020, the Financial Stability Board (FSB) published its 2020 report on the implementation and effects of the G20 financial regulatory reforms. Key points in the report include: Greater resilience of major banks at the core of the financial system has allowed the system largely to absorb, rather than amplify, the macroeconomic shock … Continue Reading

The LIBOR Transition – US Banking Agencies issue statement on replacement rates

The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (collectively, the “Banking Agencies”) issued a statement (“Statement”) on November 6, 2020, regarding the upcoming discontinuation of LIBOR as a reference rate. Referencing a recent statement on the LIBOR transition issued by … Continue Reading

2020 list of global systemically important banks

On 11 November 2020, the Financial Stability Board (FSB) issued a press release confirming the 2020 list of global systemically important banks (G-SIBs). The list of G-SIBs is based on end-2019 data and the updated assessment methodology published by the Basel Committee on Banking Supervision in July 2013. The overall number of G-SIBs remains 30. … Continue Reading

The Regulation Tomorrow Podcast – Episode 2 out now on iTunes and Apple Podcasts

Episode 2 of the Regulation Tomorrow podcast is out now, make sure to listen and subscribe. We chat to Jonathan Herbst about the latest Brexit news, Caroline Herkströter discusses current thinking around reverse solicitation, and Lisa Lee Lewis explains some of the findings of our recently conducted Global Operational Resilience Survey. The Regulation Tomorrow Podcast … Continue Reading

FSB consults on regulatory and supervisory issues relating to outsourcing and third-party relationships

On 9 November 2020, the Financial Stability Board (FSB) issued a discussion paper on regulatory and supervisory issues relating to outsourcing and third-party relationships. The discussion paper is based on a survey that the FSB Standing Committee on Supervisory and Regulatory Cooperation (SRC) conducted among member jurisdictions on the existing regulatory and supervisory landscape relating … Continue Reading

The LIBOR Transition – New York State introduces LIBOR replacement legislation

When the use of LIBOR as a reference rate in financial contracts is phased out at the end of 2021, those contracts currently utilizing LIBOR may face costly litigation, renegotiation and market disruption. On October 28, 2020, New York State Senate Bill S9070 (“S9070”) was introduced and is intended to possibly pre-empt much of that … Continue Reading

Basel Committee reports to G20 Leaders on Basel III implementation

On 3 November 2020, the Basel Committee on Banking Supervision (Basel Committee) published a report for G20 leaders at their summit in Riyadh on 21-22 November 2020. The report provides an update on the implementation of the Basel III regulatory reforms and the Basel framework-related measures taken by the Basel Committee in response to the … Continue Reading

The LIBOR Transition – ISDA 2020 IBOR Fallbacks Protocol and Supplement

Introduction On October 23, 2020, the International Swaps and Derivatives Association (“ISDA”) released the ISDA IBOR Fallbacks Protocol (“Protocol”) and a Supplement to the 2006 ISDA Definitions (“Supplement”). While the Supplement amends definitions to the 2006 ISDA Definitions, it only amends definitions for new contracts. The Protocol gives participants an opportunity to amend existing contracts. … Continue Reading

FINRA (and selected SEC) regulatory matters at a glance: What compliance officers need to know

Access the October issue for an overview of FINRA and SEC regulatory developments of interest to broker-dealers Glen Barrentine is Of Counsel in the New York office of Norton Rose Fulbright. His practice focuses broadly on SEC regulated financial service clients, including broker-dealers, securities exchanges, municipal advisors and investment advisers. Glen frequency represents clients in … Continue Reading

Regulatory initiatives applicable to impact investing

As the regulatory framework concerning environmental, social and governance (ESG) issues continues to develop, new rules will govern how impact investing is undertaken. Although the core focus of the ESG agenda has been on environmental sustainability, social matters have also been addressed and are likely to grow in importance in the coming years, particularly in … Continue Reading

FSB task force on climate-related financial disclosures – 2020 status report

On 29 October 2020, the Financial Stability Board’s (FSB) task force on climate-related financial disclosures (TCFD) published its 2020 status report on TCFD-aligned disclosures by firms. The FSB established the TCFD in 2015 and tasked it with developing a set of voluntary, consistent disclosure recommendations for use by companies in providing information to investors, lenders … Continue Reading