United States

Topic: Dodd-Frank

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FSOC proposes revamping systemic risk designation process

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

US regulators propose changes to Volcker Rule to conform to 2018 legislation

On February 8, 2019, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission (collectively, the “Agencies”) published for public comment a Notice of Proposed Rulemaking (the “NPRM”) to amend the Volcker … Continue Reading

Mandatory stay provisions in qualified financial contracts

Companies are being, or have been, approached by US banks and/or their affiliates with which they have derivatives contracts or other qualified financial contracts (QFCs) and asked to amend those agreements to cover a situation where the bank or its affiliates might be put into a receivership situation. The reason why they are getting these … Continue Reading

Federal Reserve Board proposes risk-based prudential standards

On November 29, 2018, the Federal Reserve Board published for public comment a Notice of Proposed Rulemaking that would reorganize the current prudential standards regulatory framework for US banking organizations deemed to be of systemic risk into four separate categories to reflect their risk profiles.… Continue Reading

The last SIFI falls

On October 17, 2018, the U.S. Treasury Department announced that the Financial Stability Oversight Council (FSOC) had lifted its designation of Prudential Financial Inc. as a systemically important financial institution (SIFI). The decision was unanimous, with Securities and Exchange Commission (SEC) Commissioner Elad Roisman voting on delegated authority due to the recusal of SEC Chair … Continue Reading

CFTC’s Giancarlo’s Cross-Border White Paper 2.0 signals upcoming rule proposals to replace cross-border guidance

On October 1, 2018, the Commodity Futures Trading Commission’s (“CFTC”) Chairman, J. Christopher Giancarlo released a White Paper entitled, “Cross-Border Swaps Regulation Version 2.0: A Risk-Based Approach with Deference to Comparable Non-U.S. Regulation” (“Cross-Border White Paper 2.0”). Chairman Giancarlo intends to direct the CFTC staff to put forth new rule proposals, which if adopted, would … Continue Reading

CFTC proposes process on exempting non-US derivative clearing organizations

On August 8, 2018, the U.S. Commodity Futures Trading Commission (CFTC) announced a notice of proposed rulemaking, which if adopted as proposed, would set out the policies and procedures for clearing organizations located outside of the United States to follow if they want to obtain an exemption from registration as a derivatives clearing organization (DCO). … Continue Reading

US financial regulators unveil proposed changes to Volcker Rule

On May 30, 2018, the Federal Reserve Board was the first of the five financial services regulators responsible for the Volcker Rule to approve proposed changes agreed by the regulators. Between May 31 and June 5, 2018, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Commodity Futures Trading Commission and the Securities … Continue Reading

Dodd-Frank reform legislation becomes law; no repeal but key provisions are revised

On May 24, 2018, the President signed Public Law 115-174, the “Economic Growth, Regulatory Relief, and Consumer Protection Act,” which includes some revisions to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), but not its wholesale repeal. The Law addresses such diverse areas as revised bank systemic risk standards, easing of … Continue Reading

U.S. federal court limits reach of credit risk retention regulations

On February 9, 2018, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”) issued a major decision regarding credit risk retention requirements. Following the 2007-2008 financial crisis, Congress passed the Dodd-Frank Act (“Dodd-Frank”) in an effort to avert a future crisis and as part of … Continue Reading

Supreme Court holds individuals must report to the SEC to qualify as whistleblowers under Dodd-Frank

On Wednesday, February 21, 2018, the US Supreme Court resolved a circuit split by unanimously holding that an employee must report suspected securities law violations to the US Securities and Exchange Commission (“SEC”) in order to qualify as a whistleblower entitled to protection from retaliation under the Dodd-Frank Wall Street Reform and Consumer Protection Act … Continue Reading

MetLife SIFI Lawsuit dismissed; FSOC designation process may change

On January 23, 2018, the last step occurred in the challenge by MetLife of its designation by the Financial Stability Oversight Council (FSOC) as a nonbank systemically important financial institution (SIFI) when the U.S. Court of Appeals dismissed the appeal with prejudice, approving a motion jointly filed by the MetLife and FSOC. The last remaining … Continue Reading

Another SIFI designation falls

On September 29, 2017, the Financial Stability Oversight Council (FSOC) formally lifted its designation of American International Group, Inc. (AIG) as a systemically important financial institution (SIFI). The FSOC was established pursuant to the 2010 Dodd-Frank financial reform legislation and is chaired by the Secretary of the Treasury with members composed of the federal financial … Continue Reading

US federal banking regulators issue risk-based capital guidance for certain derivatives

On August 14, 2017, the US federal banking agencies (Federal Reserve Board (FRB), Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC)) issued interagency guidance on the risk-based capital treatment of certain centrally cleared derivative contracts. The guidance was issued because some central counterparties recently modified margin requirements for certain centrally … Continue Reading

OCC seeks comments on changes to Volcker Rule

On August 2, 2017, the Office of the Comptroller of the Currency (“OCC”), which charters national banks, issued a press release and notice seeking comments proposing revisions to the  regulations that implement the so-called “Volcker Rule” in order to “better accomplish the purposes” of the Rule. The Volcker Rule, enacted as part of the Dodd-Frank … Continue Reading

Metlife SIFI appeal in abeyance; documents under seal to be reviewed for release

On August 2, 2017, the U.S. Court of Appeals for the D.C. Circuit ordered another stay in the ongoing case between the Financial Stability Oversight Council (FSOC) and MetLife over whether MetLife should be designated as systemically important and subject to additional regulation by the Federal Reserve Board. As noted in previous blog posts, on … Continue Reading

CFTC registers LedgerX to trade, clear Bitcoin derivatives

The Commodity Futures Trading Commission (CFTC) recently approved two applications from LedgerX – a platform for trading and clearing Bitcoin options – to become registered as a swap execution facility (SEF) and derivatives clearing organization (DCO). These approvals make LedgerX the first DCO and the second SEF approved to facilitate digital currency-related derivatives activity (another … Continue Reading

US regulators reviewing Volcker Rule applicability to certain non-US funds

On July 21, 2017, the Federal Reserve Board, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation (the “US Banking Agencies”), along with the Securities and Exchange Commission and the Commodity Futures Trading Commission, issued a joint press release indicating that they were coordinating their review of the applicability of the Volcker … Continue Reading

Incriminating IMs lead to Singapore precious metals trader settling, pleading guilty to charges of spoofing, manipulation and wire fraud

A former futures trader recently agreed to a settlement order from the U.S. Commodity Futures Trading Commission (“CFTC”) imposing a permanent trading ban for spoofing and manipulation, and pled guilty to criminal charges of manipulation and wire fraud, for trading done in the precious metals market. David Liew was a trader on a major financial … Continue Reading

Court stays FSOC’s Metlife SIFI appeal

As noted in previous blog posts, on March 30, 2016, MetLife prevailed against the Financial Stability Oversight Council (FSOC) when a US District Court Judge for the District of Columbia issued an order overturning the FSOC’s designation of MetLife as a Systemically Important Financial Institution (SIFI). The designation of  SIFIs is one of the many … Continue Reading

CFTC amends regulations to prohibit restrictions on employee communication concerning potential Commodity Exchange Act violations

On May 22, 2017, the Commodity Futures Trading Commission (“CFTC”) amended Part 165 of its regulations, which govern whistleblower incentives and protections. In addition to strengthening existing anti-retaliation protections for whistleblowers, the amendments also prohibit employers from restricting employees from reporting potential violations of the Commodity Exchange Act directly to the CFTC. This prohibition extends … Continue Reading

More Presidential action on potential deregulation

On April 21, 2017, the White House issued an Executive Order and two Presidential Memoranda to the U.S. Secretary of the Treasury as part of the Trump Administration’s continuing efforts on deregulation: The Presidential Executive Order on Identifying and Reducing Tax Regulatory Burdens orders the Secretary of the Treasury, in consultation with the Office of … Continue Reading

FRB issues first Volcker Rule enforcement order and civil penalty

On April 20, 2017, the Federal Reserve Board issued its first Volcker Rule enforcement order and assessed a $19.71 million civil penalty. It was issued against a non-U.S. bank with banking offices and subsidiaries in the United States. The Federal Reserve Board determined that the bank did not have a compliance program “reasonably designed to … Continue Reading

EU v US intermediate financial holding company regimes

The latest Banking Reform updater features an analysis of EU v US intermediate financial holding company regimes. The update introduces the EU IHC proposals and compares the EU and US regimes: Why are the EU IHC rules being proposed? Overview – effects of the EU IHC regime and comparison with the US regime Analysis – EU … Continue Reading
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