Regulatory Developments
FDIC Deposit Insurance Coverage and Crypto
On July 29, the FDIC issued a Fact Sheet and Advisory (collectively, the Published Documents) concerning FDIC deposit insurance coverage and crypto property. The Published Documents emphasize that FDIC deposit insurance coverage doesn’t apply crypto property, nor does it apply to extra conventional monetary merchandise comparable to shares, bonds or mutual funds. The Advisory warns that crypto firms representing that crypto merchandise are eligible for FDIC deposit insurance coverage protection might confuse non-bank prospects concerning the scope of FDIC deposit insurance coverage safety usually. Further, the Advisory units forth varied danger administration issues for insured banks to concentrate on when coping with crypto firms.
“Inaccurate representations about deposit insurance by non-banks, including crypto companies, may confuse the non-bank’s customers and cause those customers to mistakenly believe they are protected against any type of loss.”
– The FDIC
CFTC Issues Notice of Proposed Rulemaking and Notice of Proposed Order and Request for Comment
On July 29, the CFTC issued a discover of proposed rulemaking to amend Regulation 39.24 to reinforce CFTC derivatives clearing group (DCO) governance requirements, require a DCO to determine a number of danger administration committees (RMCs) and a number of danger advisory working teams (RWGs), and prescribe requirements associated to the composition, actions, and insurance policies and procedures of RMCs and RWGs. In addition, the CFTC issued a discover of proposed order and request for remark on a comparability dedication that might allow substituted compliance of Japan’s capital and monetary reporting necessities for non-bank swap sellers as in comparison with the capital and monetary reporting necessities adopted by the CFTC below Dodd-Frank. Comments on each proposals may be submitted through the CFTC Comments Portal for 60 days publish publishing within the Federal Register.
OCC Updates Policy Statement on Minority Depository Institutions
On July 27, the OCC introduced a coverage assertion (the Statement) revising a earlier 2013 coverage assertion concerning MDIs. The Statement updates and streamlines the descriptions of its insurance policies, procedures, and packages, and describes the vary of packages the OCC at the moment has in place to protect and help MDIs. The OCC was prompted to evaluate its preliminary 2013 coverage after witnessing the elevated curiosity from banks and different stakeholders in working with MDIs and the MDI designation course of.
The 2020 formation of Project REACh (Roundtable for Economic Access and Change) and the institution the Emergency Capital Investment Program by Congress for COVID-19 reduction additionally contributed the OCC’s determination to evaluate and replace packages as associated to MDIs. Project REACh gathers leaders from banking, enterprise, know-how, and nationwide civil rights organizations to scale back particular obstacles that forestall full, equal, and honest participation within the nation’s financial system. The OCC created Project REACh as a way to strengthen MDIs for bigger banks that decide to strengthening MDIs by funding, technical help, enterprise alternatives, govt coaching, and different assets. Signatory banks have dedicated to roughly $500 million in investments to MDIs.
SEC Re-Proposes Amendments to Exemption From National Securities Association Membership
On July 29, the SEC re-proposed rule amendments that would cut the present exemption from Section 15(b)(8) of the Securities Exchange Act. Section 15(b)(8) requires any dealer or supplier registered with the Commission to turn into a member of a nationwide securities affiliation except the dealer or supplier results transactions in securities solely on an alternate of which it’s a member.
Rule 15b9-1 at the moment supplies an exemption to Section 15(b)(8) for these sellers participating in propriety buying and selling of securities. The proposed amendments would substitute this proprietary buying and selling exemption with a slender exemption. Under the proposed modification, a broker-dealer that carries no buyer accounts and results securities transactions apart from on a nationwide securities alternate the place it’s a member can be exempt from Section 15(b)(8) solely if these transactions end result from routing for order safety proposes by a nationwide securities alternate the place the dealer is a member or represent the execution of the inventory leg of a stock-option order. This proposed modification would serve to reinforce FINRA oversight of corporations that commerce securities proprietarily throughout markets.
The public remark interval will stay open for 60 days following publication of the proposing launch on the SEC’s web site.
U.S. Department of Labor Issues Proposed Amendment to QPAM Exemption
On July 26, the U.S. Department of Labor issued a proposal to amend prohibited transaction class exemption 84-14 (the QPAM Exemption) below ERISA. The QPAM Exemption at the moment permits a plan’s funding fund to have interaction in transactions with “parties in interest” to the plan if, amongst different circumstances, the property are managed by a “qualified professional asset manager,” or “QPAM,” that’s unbiased of the events in curiosity and that meets sure different necessities.
Read our consumer alert to be taught extra in regards to the proposed rule.
Are the SEC and FINRA Moving to the Metaverse?
Are the SEC and the Financial Industry Regulatory Authority (FINRA) organising store within the metaverse? Not fairly but, however we stress but! Like non-public sector companies, U.S. monetary companies regulators are more and more exploring what the metaverse, augmented actuality (AR), and digital actuality (VR) imply for his or her registrants’ companies and additionally for the means and strategies of regulating them.
Read our consumer alert for Goodwin’s tackle the way forward for regulatory steerage, guidelines and expectations as monetary trade corporations enhance their metapresence.
Delaware Adopts Control Share Acquisition Statute for Registered Closed-End Funds and Business Development Companies Organized in Delaware
The state of Delaware lately amended the Delaware Statutory Trust Act to undertake a management share acquisition statute as an anti-takeover protection.
Read our consumer alert to be taught extra about this statute and its implications.
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