Corporate & Securities Law

Banking Industry Urges SEC and CFTC to Include Small Banks within Dodd-Frank Derivatives End-User Exemption

Posted on February 24, 2011
In a joint letter to the SEC and CFTC, the American Bankers Association urged the Commissions to include an exemption for small banks in their final rules on the end-user exception to mandatory swaps clearing. With regard to the notification requirements for end users, the ABA urged the agencies not to require public dissemination of the information since it would reveal proprietary business information and could cause competitive harm...

Oregon Requires new Part 2 of Form ADV for Investment Advisers

Posted on February 24, 2011
Investment advisers must file new Part 2 of Form ADV, and investment adviser firms and investment adviser representatives must electronically submit their documents and fees through the IARD, as of January 1, 2011.Please see the three blue hyperlinks under "What's New" on the following home page: http://dfcs...

House Leaders Ask Questions About SEC General Counsel and Madoff Fraud

Posted on February 24, 2011
In a letter to SEC Chair Mary Schapiro, House Financial Services Chair Spencer Bachus (R-AL) asked for a response on a series of questions regarding SEC General Counsel David Becker, who is a defendant in a clawback lawsuit initiated by Irving Picard, the trustee in the Bernard L...

Louisiana Proposes Recordkeeping Requirements for Broker-Dealers and Investment Advisers

Posted on February 24, 2011
Broker-dealers and investment advisers would be required to make, maintain and preserve books and records that comply with SEC recordkeeping requirements under new rules proposed by the Louisiana Securities Commission. Dealers would comply with SEC Rules 17a-3, 17a-4 and 15c-211; investment advisers would comply with Rule 204-2 of the Investment Advisers Act of 1940...

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CAQ Asks PCAOB Not to Change Funding Rule to Require Audit Firm to File Notice

Posted on February 23, 2011
One method of funding the PCAO provided by Sarbanes-Oxley is an annual accounting support fee paid by issuers and now broker-dealers. If the issuer is past due with its allocated share of the accounting support fee, then no registered firm is permitted to sign an unqualified audit opinion with respect to the issuer's financial statements or to sign a consent to the use of prior audit opinions for that issuer...

Banking Industry Urges SEC to Clarify that Banking Products Are Not Within Embrace of Registration Regime of Sec. 975 of Dodd-Frank

Posted on February 23, 2011
In a comment letter to the SEC, the banking industry said that the Commission?s proposal to require registration and supervision for municipal advisors unnecessarily goes far beyond the legislative intent of the Dodd-Frank Act. While the industry supports the goal of ensuring that market participants providing investment advice to municipalities are appropriately regulated, the proposal goes beyond legislative intent or public policy need by purporting to regulate already-regulated traditional banking products, such as deposit, cash management and lending activities, and trust and custody products with or on behalf of municipalities...

Report Finds Broad Support and High Compliance Rate for Dutch Corporate Governance Code

Posted on February 23, 2011
The new Dutch Corporate Governance Code that came into force for listed companies in January 2009 has broad support and a high rate of compliance, said a report by the Corporate Governance Code Monitoring Committee. Compliance with the Code is on an apply or explain basis under which the principles and best practice provisions of the Code must be applied unconditionally or an explanation must be given for any departure from them...

CAQ Seeks Clarification of PCAOB?s Interim Rule for Inspection of Auditors of Brokers and Urges Focus on Brokers Controlling Customers? Securities

Posted on February 23, 2011
In a comment letter, the Center for Audit Quality (CAQ) asked the PCAOB to clarify the Board?s proposed temporary rule for an interim program of inspection related to audits of brokers and dealers. CAQ also encouraged the Board to focus a significant portion of its efforts on audits of brokers and dealers of greater significance to investors...

Oregon Permanently Adopts Dodd-Frank Accredited Investor Definition Exclusion for Primary Residence

Posted on February 23, 2011
Oregon's temporary effective exclusion of an investor's primary residence from the $1 million net worth calculation in the State's accredited investor definition was permanently adopted on February 15, 2011. This amendment to Oregon's accredited investor definition adopts the Dodd-Frank Act's modification to the federal accredited investor definition...

In Letter to House Leader, Prof. Warren Says Consumer Financial Protection Bureau Regulations Will First Seek to End Duplication

Posted on February 22, 2011
In a letter to House Oversight Subcommittee Chair Randy Neugebauer (R-TX), Professor Elizabeth Warren said that the Bureau of Consumer Financial Protection created by the Dodd-Frank Act was preparing regulations that will deal directly with duplication when it begins to operate on July 21, 2011...

Draft Code of Practice for Auditor-Regulator Interaction Set Out by UK FSA

Posted on February 22, 2011
The UK Financial Services Authority has proposed a draft Code of Practice to enhance the relationship between the outside independent auditor of a firm?s financial statements and the regulator of the firm. The Code is composed of principles focusing on open and regular dialogue, confidentiality, and the fulfillment of statutory duties...

Volcker Calls for Global Accounting Standards in Tribute to IFRS Oversight Chair

Posted on February 22, 2011
In a world of global finance, noted former Fed Chair Paul Volcker, common accounting standards are a matter of fundamental importance. In remarks paying tribute to Tommaso Padoa-Schioppa, former Chair of the IFRS Foundation which oversees the IASB in an effort to achieve global accounting standards, Mr...

Institutional Investors Support SEC?s Proxy Access Rule in Amicus Brief

Posted on February 21, 2011
An amicus brief filed by the Council of Institutional Investors and TIAA-CREF strongly defends the SEC?s proxy access rule against a challenge by business groups in federal court. A number of other significant institutional investors signed on to the brief, including CalPERS, the Wisconsin Investment Board, and the New York State Employees Retirement System...

Corporate Governance Group Applauds IASB Draft on Management Commentary for Financial Statements

Posted on February 21, 2011
The IASB?s proposed framework for the presentation of management commentary to accompany financial statements prepared in accordance with IFRSs received a strong endorsement from the International Corporate Governance Network, which called the draft a significant step forward in promoting best practice in terms of disclosure on risk and business strategy supported by appropriate metrics and key performance indicators...

FSA Dear CEO Letter Updates on New Regulatory Regime as Treasury Committee Says Take Time

Posted on February 21, 2011
The UK FSA has changed its management structure in anticipation of a smooth transition to a new bifurcated system of financial regulation. In a Dear CEO letter, the FSA noted that the Prudential Regulation Authority (the PRA), which will be a subsidiary of the Bank of England, will be responsible for promoting the stable and prudent operation of the financial system through regulation of all deposit-taking institutions, insurers and investment banks...

IOSCO Report on OTC Derivatives Trading Platforms Emphasizes Full Transparency

Posted on February 19, 2011
IOSCO has issued a report analyzing the benefits, costs, and challenges associated with increasing exchange and electronic trading of OTC derivative products, with recommendations to assist the transition of trading in standardized derivatives products from OTC venues onto exchanges and electronic trading platforms, while preserving the efficacy of those transactions for counterparties...

FSA Dear CEO Letter Updates on New Regulatory Regime as Treasury Committee Says Take Time

Posted on February 19, 2011
In a Dear CEO letter, the UK FSA said that it has changed its management structure in anticipation of a smooth transiton to a new bifurcated system of financial regulation. The Prudential Regulation Authority (the PRA), which will be a subsidiary of the Bank of England, will be responsible for promoting the stable and prudent operation of the financial system through regulation of all deposit-taking institutions, insurers and investment banks...

Proposed German Sustainability Code Linked to Sound Corporate Governance

Posted on February 19, 2011
Comments on the proposed German Sustainability Code designed to foster corporate sustainability through better governance, social responsibility and enviromental concerns were generally favorable and said sustainability is intertwined with sound governance...

Ahead of Legislation, Hong Kong Securities and Futures Commission Issues Guidelines on Disclosure of Inside Information

Posted on February 19, 2011
As the Government readies legislation on insider trading, the Hong Kong Securities and Futures Commission set out draft guidelines on the disclosure of inside information, which have been well received by the corporate and investor communities. The Commission will issue final guidelines after the legislation is enacted later this year...

Delaware Chancery Rules that Target Company Directors Breached Fiduciary Duties in Failing to Properly Oversee Investment Bank

Posted on February 18, 2011
The board of directors of a target company facing a leveraged buyout by private equity firms breached its fiduciary duties by failing to provide the serious oversight that would have checked the misconduct of an investment bank involved in the deal, ruled the Delaware Chancery Court...

House Agriculture Committee Leaders Question CFTC Rulemaking Implementing Dodd-Frank Derivatives Title

Posted on February 17, 2011
In a letter to CFTC Chair Gary Gensler, House Agriculture Chairman Chair Frank Lucas (R-OK) urged the CFTC to follow President Obama?s recent executive order on regulations, especially when adopting the regulations under Title VII of Dodd-Frank. The letter, also signed by Commodities Subcommittee Chair Mike Conaway (R-TX), emphasized that Title VII potentially impacts every segment of the economy, from financial firms to manufacturing companies because of the widespread use of derivatives for hedging and other purposes...

Corp Fin Staff Interprets SEC Rule Implementing Dodd-Frank Say-on-Pay Mandate

Posted on February 17, 2011
Interpreting the Dodd-Frank mandated shareholder advisory vote on executive compensation, as implemented by SEC Rule 14a-21, the Corporation Finance staff said that it is permissible for the say-on-pay vote to omit the words, "pursuant to Item 402 of Regulation S-K," and replace such words with a plain English equivalent, such as ``pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and any related material disclosed in this proxy statement...

Securities and Commodities Industry Question SEC and CFTC Dodd-Frank Derivatives Rulemaking at House Hearing

Posted on February 17, 2011
Securities and commodities industry representatives told the House Financial Services Committee that CFTC and SEC rulemaking implementing the derivatives provisions (Title VII) of Dodd-Frank go beyond what the legislation requires and are not harmonized with international derivatives regulatory efforts...

NASAA Seeks Comments on Amendments to Model Rules Governing Adviser Custody and Brochure Requirements

Posted on February 17, 2011
The North American Securities Administrators Association (NASAA) has requested public comments regarding proposed changes to the NASAA model rules pertaining to investment adviser custody, financial requirements, recordkeeping and brochure delivery. As stated in the Notice of Request for Public Comment (Notice) released today, NASAA's Investment Adviser Regulatory Policy and Review Project Group (Project Group) has been charged with amending these rules to address changes by the SEC to its custody and brochure rules for investment advisers...

Delaware Chancery Court Upholds Poison Pill under Enhanced Unocal Test

Posted on February 16, 2011
A target company?s board of directors that has a good faith, reasonable basis to believe a takeover bid is inadequate may block a non-coercive bid using a poison pill irrespective of stockholders? desire to accept it, ruled the Delaware Chancery Court in an eagerly awaited opinion...

Key Senators Urge SEC and CFTC Not to Impose Margin on Derivatives End Users and Avoid Driving Derivatives Markets Offshore

Posted on February 16, 2011
In a bi-partisan letter to SEC Chair Mary Schapiro and CFTC Chair Gary Gensler, key Senators said that it is critical that the commercial end user exemption provided both in Sections 723 and 763 of Dodd-Frank be implemented consistently with Congressional intent, which is that margin requirements should not be applied to the end users of OTC derivatives...

Senate Banking Committee Republicans Question SEC and CFTC on Their Regulatory Implementation of Dodd-Frank

Posted on February 16, 2011
Ahead of a Senate Banking Committee hearing on the regulatory implementation of the Dodd-Frank Act, Committee Republicans have asked the SEC, the CFTC and other federal financial regulators to respond to a series of questions on their implementation efforts...

NYSE Clarifies Dodd-Frank Mandate on Voting Uninstructured Shares on Executive Compensation

Posted on February 15, 2011
In its 2011 corporate governance letter to domestic listed company executives, NYSE Regulation noted that Section 957 of the Dodd-Frank Act required each national securities exchange to amend its rules to prohibit member organizations from voting shares without specific client instructions in matters related to executive compensation...

Prof. Warren Opposes Placing Bureau of Consumer Financial Protection under Congressional Appropriations Process

Posted on February 15, 2011
The new Bureau of Consumer Financial Protection should not be deprived of the dedicated funding from the Fed as provided by the Dodd-Frank Act, emphasized Professor Elizabeth Warren. In remarks at the Consumers Union, she said that the effort to chip away at the Bureau?s independence by subjecting it entirely to Congressional appropriations is coming from the same people and groups who opposed the very creation of the Bureau...

Corporate Secretaries Society Says Proxy Advisory Firms Are ERISA Fiduciaries and Should Also Register with the SEC as Advisers

Posted on February 15, 2011
While the Society of Corporate Secretaries and Governance Professionals does not support the DOL?s proposed definition of fiduciaries for those providing investment advice to an employee benefit plan or a plan?s participant, the Society does believe that proxy advisory firms should be considered fiduciaries under the definition...

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