United States

Consensus New York & Blockchain week – key takeaways

Partners from our global FinTech team flew in from Hong Kong, Vancouver, London and Dallas to join our New York team to attend Consensus and Blockchain week in NYC (13-15 May). Consensus is an annual global conference which brings together the world’s most innovative minds to explore and debate the future of blockchain and crypto. … Continue Reading

No news is good news? The SEC may be undermining innovation in FinTech

By Andrew Lom (US), Rachael Browndorf (US) and Eric Ramirez (US) on May 15, 2019 Posted in Brokers and Intermediaries, Enforcement, Fintech, General, Regulation and compliance, United States

On May 9, 2019, SEC Commissioner Hester Peirce delivered a speech at the Securities Enforcement Forum in East Palo Alto, California, discussing the SEC’s impact on the FinTech space and growth of the digital asset industry. Commissioner Peirce admitted her prior prediction, that the SEC would discourage the industry’s growth through hurried regulation and overenthusiastic … Continue Reading

CFTC Division of Enforcement Publishes Enforcement Manual

By Joseph Williams (US), Anna Biegelsen (US) and Lillian A. Cardona (US) on May 10, 2019 Posted in Commodities & Derivatives, Enforcement, General, Regulation and compliance, United States

On May 8, 2019, the Division of Enforcement (“Division”) of the Commodity Futures Trading Commission (”CFTC”) announced that it had published its Enforcement Manual (“Manual”). This is the first issuance of a public Manual. Prior to this publication, the Manual was only available internally as a general reference to the Division’s Staff during their investigation … Continue Reading

A Framework for OFAC Compliance Commitments

By Kim Caine (US) and Katie McDougall (UK) on May 3, 2019 Posted in Enforcement, Investigations and enforcement, United States

Yesterday, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) published ‘A Framework for OFAC Compliance Commitments’* in order to provide organizations subject to US jurisdiction, as well as foreign entities that conduct business in or with the United States or US persons, or that use US-origin goods or services, with a … Continue Reading

Federal Reserve Board issues proposal to clarify and simplify “control” under the Bank Holding Company Act

By Kathleen Scott (US) on May 1, 2019 Posted in Banking, General, Regulation and compliance, United States

On April 23, 2019, the Federal Reserve Board announced that it had voted to issue a proposal for public comment that would simplify and make more transparent the standards under which the Federal Reserve Board determines that a company controls a banking organization or another company. The concept of control is important for determining if … Continue Reading

FinCEN fines peer-to-peer virtual currency exchanger for AML violations

By Kathleen Scott (US) on April 29, 2019 Posted in Enforcement, Fintech, General, Money laundering, Regulation and compliance, United States

On April 18, 2019, the U.S. anti-money laundering (“AML”) agency, the Financial Crimes Enforcement Network (“FinCEN”), announced that it had assessed a civil money penalty of $35,350 against Eric Powers of Kern County, California, for acting as an unregistered money services (“MSB”) business. Mr. Powers also agreed to cease engaging in any activity that might … Continue Reading

US extends economic sanctions on Venezuela to its Central Bank

By Kathleen Scott (US) on April 19, 2019 Posted in Banking, Enforcement, General, Regulation and compliance, United States

On April 17, 2019, the Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it had designated Banco Central de Venezuela (Banco Central), the country’s Central Bank, as subject to U.S. economic sanctions. A current director also was sanctioned; several other Banco Central management and directors previously had been designated for economic sanctions. The … Continue Reading

New York denies Bittrex a virtual currency license and orders it to cease doing business in New York

By Kathleen Scott (US) on April 15, 2019 Posted in Enforcement, Fintech, General, Regulation and compliance, United States

A day after the New York State Department of Financial Services (DFS) approved its 19th application for a license or authorization to conduct a virtual currency business in New York, it issued a denial of the application of Bittrex, Inc. (Bittrex) for a DFS BitLicense and a Money Transmitter License. Bittrex had been operating a … Continue Reading

Global Regulatory Enforcement and Sanctions Trends for 2019

By Katie Stephen (UK), Sonya Zywko (UK), David Harris (UK), Christian Dargham (FR), Kevin Harnisch (US) and Etelka Bogardi (HK) on April 12, 2019 Posted in Asia, Enforcement, Enforcement, France, Investigations and enforcement, United Kingdom, United States

In this on-demand webinar, members of our Regulatory, Compliance and Investigations team in London, France, the US and Hong Kong give their thoughts on likely regulatory enforcement and sanctions trends for the rest of this year based on recent enforcement cases and forward looking statements from the regulators. Topics discussed include individual accountability, anti-money laundering … Continue Reading

SEC issues first no-action letter for unregulated ICO

By Andrew Lom (US) and Rachael Browndorf (US) on April 10, 2019 Posted in Fintech, General, Regulation and compliance, Securities, United States

On April 3, 2019, the Securities and Exchange Commission (“SEC”) issued its first no-action letter related to the offering and sale of digital tokens. The beneficiary is TurnKey Jet, Inc. (“TurnKey”) which proposes to offer and sell blockchain-based digital assets in the form of “tokenized” jet cards (“Tokens”). The no-action letter, which some see as … Continue Reading

FSOC proposes revamping systemic risk designation process

By Kathleen Scott (US) on April 10, 2019 Posted in Dodd-Frank, General, Regulation and compliance, United States

On March 13, 2019, the Financial Stability Oversight Council (FSOC) published in the Federal Register proposed revised interpretive guidance (Proposed Guidance) on how the FSOC would assess risks to the US financial system, prioritizing an activities-based approach, rather than focusing on identifying specific systemically important financial institutions (SIFIs), which come under the FRB’s purview for … Continue Reading

Cutting and pasting misstatements can get you nailed for securities fraud

By Kathleen Scott (US) on April 4, 2019 Posted in Enforcement, General, Regulation and compliance, Securities, United States

In a decision with implications for private securities fraud suits, the United States Supreme Court recently held that an investment banker that copied and pasted misstatements from his boss into emails to prospective investors committed securities fraud, despite not being the actual “maker” of the statement, because the statement was attributed to another person. In … Continue Reading

In anticipation of Brexit, US regulators address status of certain swaps under the Swaps Margin Rule

By Kathleen Scott (US) and Lillian A. Cardona (US) on April 1, 2019 Posted in Banking, Commodities & Derivatives, General, Regulation and compliance, United States

With the next 10 days being crucial in the Brexit process, following the UK House of Commons rejecting the draft withdrawal agreement for a third time and the European Council calling an emergency summit for April 10, 2019, the Commodity Futures Trading Commission (“CFTC”) and the US banking, farm credit and housing agencies have issued … Continue Reading

U.S. Reporting Companies Must Disclose Brexit Risks

By Gerard Pecht (US), Seth Kruglak (US) and Simon Lovegrove (UK) on April 1, 2019 Posted in General, Regulation and compliance, Securities, United States

Brexit—whether it happens or not, and in what form it might (or might not) take—will shock the global marketplace. Yet despite the known unknowns in these tumultuous times, there is one certainty for public reporting companies in the United States: Brexit risks must be disclosed. On March 15, 2019, William Hinman, Director of the SEC’s … Continue Reading

Paying (or not) fees on registered US patents and trademarks in Venezuela in cryptocurrency

By Susan Ross (US) and Kathleen Scott (US) on March 29, 2019 Posted in Enforcement, Fintech, General, Regulation and compliance, United States

Last month, the Venezuelan Ministry of National Commerce issued a notice requiring patent and trademark fees to be paid in the cryptocurrency issued by the Venezuelan government — the Petro, which supposedly is backed by Venezuela’s oil and mineral reserves. As noted in previous posts, the United States has been increasing its economic sanctions on … Continue Reading

Changing securities laws and regulations for the digital token age

By Kathleen Scott (US) on March 21, 2019 Posted in Fintech, General, Regulation and compliance, United States

While federal courts last year recognized that virtual currencies based on blockchain platforms could qualify as securities and/or commodities, there has been some concern that these regulatory structures may not fit all digital tokens under all circumstances. In a recent New York Law Journal column, Robert Schwinger, a partner in the New York office of … Continue Reading

Brexit: Doing business in the EU – Updated

By Simon Lovegrove (UK) on March 18, 2019 Posted in Brexit, Brexit, France, General, Germany, Italy, The Netherlands, United Kingdom, United States

Recent updates Italy: updated 1 April 2019 Germany: updated 1 April 2019 Ireland: updated 4 April 2019 We have produced a colour coded heat map and table identifying the temporary emergency measures being implemented in EEA jurisdictions, and how financial services provides can benefit from these measures. We recommend that this resource be read in conjunction with this article. … Continue Reading

Implementation of international standards can have collateral consequences

By Kathleen Scott (US) on March 15, 2019 Posted in Banking, Capital adequacy, General, Regulation and compliance, United States

Non-financial commercial companies often secure their derivatives transactions with financial institutions in a manner other than posting cash margin, such as by granting liens on a commercial end-user’s assets. A proposed regulation from the US federal banking regulators to revise risk-based capital rules regarding derivatives in order to implement an international standard may have the … Continue Reading

Brexit: what’s next ?

By Jonathan Herbst (UK), Imogen Garner (UK) and Joe Bamford (UK) on March 15, 2019 Posted in Brexit, Brexit, France, Germany, Italy, The Netherlands, United Kingdom, United States

Following a series of crucial votes in the House of Commons this week, the financial services team in London hosted a webinar this morning exploring the impact of these on financial service firms. Listen to the webinar here… Continue Reading

New virtual currency bills introduced in the U.S. Congress

By Deanne Barrow (US) and Lillian A. Cardona (US) on February 28, 2019 Posted in Fintech, General, Regulation and compliance, United States

Two new bills were introduced in the U.S. House of Representatives at the end of January aimed at recommending possible legislative changes to regulate and promote virtual currencies, also known as cryptocurrencies. The first bill, H.R. 922, Virtual Currency Consumer Protection Act of 2019 aims to promote fair and transparent virtual currency markets by examining … Continue Reading

SEC takes aim at digital tokens and smart contracts

By Kathleen Scott (US) on February 27, 2019 Posted in Enforcement, Fintech, General, Regulation and compliance, Securities, United States

On the heels of the first-ever judicial holding this past summer that a cryptocurrency could qualify as a “security” under federal securities laws, the Securities and Exchange Commission (SEC) has brought a wave of new enforcement actions targeting blockchain-based digital token ventures under a variety of provisions in the securities laws. In a recent New … Continue Reading

Latest issue of Global Asset Management Quarterly now available

By Kathleen Scott (US) on February 27, 2019 Posted in Asset management, Banking, Brokers and Intermediaries, General, Regulation and compliance, United States

Issue 11 of our Global Asset Management Quarterly is now available. You can also register to automatically receive each issue as it is released. This publication highlights key developments that will be of interest to, and affect, our asset management clients, including market trends and developments in tax and buy-side regulation globally. Articles on US … Continue Reading

Joint statement by UK and US authorities on continuity of derivatives trading and clearing post-Brexit

By Hannah Meakin (UK) on February 25, 2019 Posted in Brexit, Clearing and settlement, Clearing and settlement, United Kingdom, United States

On 25 February 2019, the UK and US authorities issued a joint statement on continuity of derivatives trading and clearing post Brexit. The joint statement covers the following issues: Continued supervisory cooperation. The Bank of England (BoE) and the Commodity Futures Trading Commission (CFTC) are in the process of updating, in connection with the UK’s … Continue Reading

1LoD Summit – Best practice for risk and control functions within the first line of defence

By John Davison (UK), Christian Blackwell and Kevin Harnisch (US) on February 20, 2019 Posted in Regulation and compliance, United States

Norton Rose Fulbright is pleased to be sponsoring the 1LoD Summit in New York on 2 April 2019. The 1LoD Summit is the largest US event dedicated to front office risk and control functions, covering topics such as supervision, control assurance, conduct risk, surveillance, rogue trading and much more. The Summit is designed for those working in … Continue Reading