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Senators Introduce Legislation to Delay Volcker Rule

by | Thursday, March 29, 2012 | ,

A bi-partisan group of six Senators introduced a bill (S. 2223) on March 22 that would postpone the implementation of the Volcker Rule set for on July 2. Instead, S. 2223 links the effective date of the Volker Rule to the date regulators finish drafting their Volker Rule regulations. Based on their concerns that Federal Reserve Chairman Ben Bernanke and others have said the regulations implementing the rule may not be completed by the current deadline, Sens. Mike Crapo (R-ID), Mark Warner (D-VA), Kay Hagan (D-NC), Tom Carper (D-DE), Pat Toomey (R-PA), and Bob Corker (R-TN) proposed the legislation.

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Proxy Season 2012 Issues & Resources

by | Friday, March 23, 2012 | ,

With all the legislative changes, additional required disclosures, say on pay and corporate governance issues percolating in the background, investors, companies, and investment managers are faced with a challenging 2012 proxy season. Today we alert you to two issues involving proxy advisory services and point you to a resource for navigating the 2012 proxy season.

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IOSCO Issues Consultation Paper on Distribution of Complex Financial Products

by | Tuesday, March 20, 2012 | ,

Last week, the Technical Committee of the International Organization of Securities Commissions (IOSCO) issued a consultation paper on the distribution by intermediaries of complex financial products to retail and non-retail customers. The paper focuses on customer protections, proposing nine principles governing suitability and disclosure obligations, and will carry much weight as jurisdictions and IOSCO member regulators design or strengthen their regulatory regimes governing complex securities.

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Just How Ready Are We for Swaps Reform?

by | Monday, March 19, 2012 | , ,

Just in time for the CFTC and SEC’s final swaps provisions, State Street and TABB Group have published a paper, Charting New Territory: Buy-Side Readiness for Swaps Reforms, based on a survey of buy-side firms examining where the investment community stands on a range of issues arising from global swaps reforms. The paper also looks at the challenges the industry faces as it transforms from an opaque, over-the-counter, bilaterally traded environment to electronic execution and central clearing.

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Harvard’s Coates on Proposed Securities Law Reforms

by | Monday, March 19, 2012 | ,

John C. Coates IV, professor of law and economics at Harvard Law School, testified before the U.S. Senate Subcommittee on Securities, Insurance and Investment on December 14. In his testimony, Professor Coates took up three themes related to pending proposals to revise securities laws to (among other things) deregulate widely held but unlisted companies and banks, to permit unregistered “crowdfinancing,” and to loosen constraints on small public offerings:

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The Transparent Future of Swaps Markets

by | Monday, March 19, 2012 | ,

CFTC Chairman, Gary Gensler, says he believes that the days of the opaque swaps market are ending and a new era of transparency and commonsense rules of the road is on the horizon. Gensler’s October 10, 2012 address before the George Washington University Center for Law, Economics and Finance Conference provides some insights into how Mr. Gensler and his agency are paving the way for this new era. For starters, regulation of the swaps markets is now catching up to the great financial market reforms of the 1930s, such as public reporting of transactions, central exchange trading, and regulation of dealers. According to Gensler, these new Dodd-Frank regulations are implementing the same kinds of protections that have worked for decades in the securities and futures markets, bringing transparency to and lowering the risk of the swaps market. Mr. Gensler believes applying these time-tested tenants of risk management to swaps markets, and shining a bright light on its activities and players, is the best way to protect investors.

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ESMA Issues Consultation Draft on Regulation of OTC Derivatives, CCPs and Trade Repositories

by | Monday, March 19, 2012 | , ,

The European Securities and Markets Authority has issued a discussion draft on proposed regulation of OTC Derivatives, CCPs and trade repositories. The draft introduces provisions to improve transparency and reduce the risks associated with the OTC derivatives market and establishes common rules for central counterparties and for trade repositories.

The discussion paper follows the structure of the European Market Infrastructure Regulation proposal (EMIR) published in 2010, with the first section focusing on OTC derivatives and in particular the clearing obligation, risk mitigation techniques for contracts not cleared by a CCP and exemptions to certain requirements.

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EU Financial Transaction Tax Casts an Extremely Wide Net

by | Monday, March 19, 2012 | ,

On May 23, the European Parliament adopted a controversial financial transaction tax that would impose a 0.1% tax for shares and bonds and a 0.01% tax on derivatives. The language casts a very wide net and would require financial institutions located outside the EU to pay the tax if they traded securities originally issued within the EU, as well as taxing shares issued outside of the EU but subsequently traded by at least one institution established within the EU.

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