Corporate & Securities Law

Hong Kong Securities Regulator Examines Impact of Alternative Trading Venues

Posted on March 22, 2011
As the US and the EU allow alternative trading venues to compete with exchanges, noted Martin Wheatley, CEO of the Hong Kong Securities and Futures Commission, the resulting market fragmentation must be weighed against benefits to investors such as more competitive pricing and innovative services...

Big Four See UK Auditing Practices Board Proposals on Professional Skepticism in Broader Corporate Governance Framework

Posted on March 21, 2011
Professional skepticism by auditors of financial statements has taken on more importance as the move to principles-based global accounting standards accelerates. Indeed, Deloitte, in comments to UK Auditing Practices Board proposals to reinforce skepticism in the audit culture, said that auditor skepticism is at the root of a financial statement audit...

Chamber and Business Groups Ask Treasury to Follow Six Points on Setting Up CFPB

Posted on March 20, 2011
A consortium of business groups, including the U.S. Chamber of Commerce, have presented Congress and Congress and Treasury with six recommendations on developing an effective and transparent Consumer Financial Protection Bureau (CFPB) that strike a balance allowing the CFPB to fulfill its consumer protection mandate while ensuring that small businesses continue to have access to credit...

Corporate Secretaries Society Supports House Legislation Repealing Pay Ratio Provision of Dodd-Frank

Posted on March 20, 2011
The Society of Corporate Secretaries and Governance Professionals supports House legislation repealing the pay ratio provision of Dodd-Frank. The Burdensome Data Collection Relief Act would repeal a corporate governance provision of Dodd-Frank requiring publicly traded companies to disclose their median annual total compensation of all employees...

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House Legislation Would Exempt Private Equity Fund Advisers from SEC Registration

Posted on March 20, 2011
The Small Business Capital Access and Job Preservation Act, HR 1082, introduced in the House by Rep. Robert Hurt (R-VA), would exempt advisers to private equity funds from SEC registration under the Investment Advisers Act. The legislation directs the SEC to define the term private equity fund and also directs the SEC to adopt rules requiring private equity fund advisers to maintain records and provide the SEC with reports the Commission deems necessary after considering fund size, governance, risk and investment strategy...

New York Taps Marc Minor to Head Investor Protection Bureau

Posted on March 19, 2011
New York Attorney General Eric Schneiderman announced yesterday that he has appointed Marc Minor as the head of the state's Investor Protection Bureau. Minor, who previously worked in the Bureau as an Assistant Attorney General from 2002 to 2004, currently serves as the Chief of the New Jersey Bureau of Securities, a position he has held since April 2009...

Senate Legislation Would Raise 500-Shareholder SEC Reporting Threshold to 2000 for Bank Holding Companies

Posted on March 19, 2011
Bi-partisan legislation introduced by Senator Kay Bailey Hutchison (R-TX) would raise the 500-shareholder threshold for SEC reporting from the current 500 holders to 2000 for banks and bank holding companies. The bill, S 556, is co-sponsored by Senator Mark Pryor (D-AK)...

House Leaders Introduce GSE Reform Legislation Ending Fannie and Freddie Conservatorship

Posted on March 18, 2011
Legislation reforming the government sponsored enterprises, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), has been introduced by House Financial Services Committee Chairman Spencer Bachus (R-Ala) and Vice Chairman Jeb Hensarling (R-TX)...

Broad Support Building for Legislation Creating US Covered Bond Market

Posted on March 18, 2011
Bi-partisan legislation creating a US covered bond market has been introduced in the House and is supported in principle by the Obama Administration and a key member of the Senate Banking Committee. Covered bonds have been used in Europe for decades to help provide additional funding options for the issuing institutions and are a major source of liquidity for many European nations? mortgage markets...

Senate Committee Recommends Reporting 401(k) Securities Lending Information to the SEC

Posted on March 17, 2011
A Senate Committee has recommended that companies in the business of securities lending should be required to report information on such practices to the SEC and bank regulators. Currently, while securities lending is a common practice in 401(k) plans, there is no comprehensive, public data available about securities lending, including securities lending within the qualified retirement plan market...

House Bill Reinstating SEC Rule 436(g) for Rating Agencies Could Contain Franken Amendment

Posted on March 17, 2011
The sponsor of a House bill repealing Section 939G of Dodd-Frank, which nullified SEC Rule 436(g) and thereby imposed Securities Act Section 11 liability on rating agencies if their ratings were determined to be inaccurate, said that he would consider putting the Franken Amendment in the legislation at hearings on the legislation, After listening to a plea from Rep...

PCAOB Investor Advisory Group Calls for Expanded Disclosure in Audit Report

Posted on March 17, 2011
The audit report on corporate financial statements is essentially a binary boilerplate document that leaves investors with too little information with which to make an informed investment decision. The status quo on audit reports is no longer either appropriate or sustainable...

Chairman Bachus Introduces Bill to Replace Director of Consumer Financial Protection Bureau with Five-Member Commission

Posted on March 16, 2011
House Financial Services Committee Chair Spencer Bachus (R-Ala) has introduced legislation that would replace the Director of the Bureau of Consumer Financial Protection with a bipartisan Commission of five members at the Bureau, modeled on the SEC and FTC...

Secretary Geithner Responds to Congressional Concerns on Role of Consumer Financial Protection Bureau in Mortgage Servicing Settlement

Posted on March 16, 2011
In a letter to Treasury Secretary Tim Geithner, House Financial Services Chair Spencer Bachus (R-Ala) questioned what role the Consumer Financial Protection Bureau had in drafting the proposals involved with a settlement of allegations of improper mortgage services procedures and what specific legal authority would permit an official associated with the Bureau, which does not have regulatory or enforcement authority, to participate in settlement negotiations...

California Seeks Comments on a Proposed Private Adviser Exemption Rule

Posted on March 16, 2011
The California Commissioner of Corporations, Preston DuFauchard, invites interested persons to submit written comments by March 28, 2011 on a proposed revamping of an existing California rule exemption at Section 260.204.9 for private advisers. Please note, however, that this is not yet an official proposed amendment to Rule 260...

Michigan Administrative Order on Investment Advisers Aligns with Dodd-Frank

Posted on March 16, 2011
The sixth transition order to come out of the Michigan Office of Financial & Insurance Regulation since the State's adoption of the Uniform Securities Act of 2002 on October 1, 2009 amends the parts of the first and fourth transition orders [pars...

House Oversight Chair Says SEC and CFTC Not Coordinating Dodd-Frank Derivatives Regulations

Posted on March 15, 2011
The SEC and CFTC are not properly coordinating the adoption of regulations to implement the Title VII derivatives provisions of the Dodd-Frank Act, said House Capital Markets Subcommittee Chair Scott Garrett (R-NJ). In a letter to CFTC Chair Gary Gensler, Rep...

AEI Scholar Norman Ornstein to Keynote NASAA's Public Policy Conference

Posted on March 14, 2011
The North American Securities Administrators Association (NASAA) has announced that noted political expert Norman Ornstein, Resident Scholar at the American Enterprise Institute, will deliver the keynote address at NASAA's upcoming Public Policy Conference in Washington, D...

In Letter to SEC, Hedge Fund Industry Interprets Dodd-Frank as Requiring Aggregate Rather than Individual Public Reporting of Short Positions

Posted on March 14, 2011
The hedge fund industry believes that the plain language and legislative history of Section 929X of Dodd-Frank clearly indicates the intent of Congress to require a public report disclosing aggregate information about short sales and not information about individual short sales or short positions...

House Financial Services Committee Unveils Four Pieces of Draft Legislation Amending Dodd-Frank

Posted on March 14, 2011
The House Financial Services Committee has issued drafts of four pieces of legislation amending the Dodd-Frank Act, while another draft would raise the offering threshold under SEC Regulation A to $50 million The legislation is part of the Committee?s broad overview of Dodd-Frank to eliminate provisions that overly burden the capital markets...

House Chairs Ask for Investigation of CFTC?s ``Vague and Minimalist?? Cost-Benefit Analysis for Rules Implementing Dodd-Frank Derivatives Title

Posted on March 14, 2011
Recent public comments indicate that the CFTC is failing to adequately conduct cost-benefit analysis required by the Commodity Exchange Act or the principles of a recent Executive Order in adopting regulations to implement the derivative provisions of Title VII of Dodd-Frank, one of the most significant regulatory overhauls in decades, said House Agriculture Committee Chair Frank Lucas (R-OK) and Commodities Subcommittee Chair Mike Conaway (R-TX)...

Dodd-Frank Ban on Pre-Dispute Arbitration Agreements under SOX Whistleblower Protection Provision Applies Retroactively

Posted on March 14, 2011
The Dodd-Frank Act ban on pre-dispute arbitration agreements under SOX whistleblower protection was applied retroactively in a ruling by a federal district court in Massachusetts.(Pezza v Investors Capital Corp, March 1, 2011, Woodlock, D). In the absence of clear legislative intent by Congress to limit the temporal reach of Sec...

IASB Chair Says US Must Commit to IFRS This Year if There Is Ever to Be Global Accounting Standards

Posted on March 13, 2011
The United States must commit itself this year to a workable timetable for the incorporation and use of IFRS, said IASB Chair David Tweedie, since there cannot truly be global accounting standards without US acceptance of IFRS. In remarks to the Chamber of Commerce, he said that despite the fact that over 100 countries have adopted IFRS, they are not yet a global standard because the United States still does not formally accept IFRS for its domestic companies...

SAG Will Discuss Pending COSO Update of Internal Controls Framework at March Meeting

Posted on March 13, 2011
The upcoming March 2011 meeting of the PCAOB?s Standing Advisory Group will examine the pending revised internal controls framework being developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) with an eye to informing the PCAOB of the SAG's views on any potential implications of COSO's update on the auditor's responsibilities regarding internal control over financial reporting that will impact the Board?s standard on auditing internal controls...

Global Audit Firm Settles SEC Action Charging Violation of Independence Rules and PCAOB Standards

Posted on March 13, 2011
A Big Four audit firm settled SEC proceedings charging it with violating Commission independence rules in the provision of non-audit services to two client companies and , with respect to one financial reporting period relating to one company, PCAOB standards...

In Determining if Hedge Fund Subject to Systemic Risk, Financial Stability Council Urged to Consider Industry Changes Since LTCM

Posted on March 12, 2011
In a letter to the Financial Stability Oversight Council as it considers the criteria to designate if a hedge fund is systemically significant under Dodd-Frank, the hedge fund industry urged the Council to analyze financial institutions based on objective, quantitative data to determine which hedge funds and other nonbank financial companies should be deemed systemically significant and, therefore, subject to supervision by the Fed...

Hedge Fund Industry Urges SEC to Clarify Exemption for Investment Advisers and Commodity Trading Advisors in Dodd-Frank Municipal Advisor Rules

Posted on March 12, 2011
The hedge fund industry has asked the SEC to adopt in the Dodd-Frank mandated municipal advisor rules a clear, consistent definition of municipal advisor that does not apply to an investment adviser managing a pooled investment vehicle that has both municipal entity and non-municipal entity investors...

Texas Adopts New Part 2 of Form ADV

Posted on March 11, 2011
New Part 2 of Form ADV was adopted by the Texas Securities Board for use by investment adviser applicants and registrants, effective March 9, 2011.Initial application. An initial investment adviser registration application consists of items electronically submitted through the IARD including a Form ADV, Uniform Investment Adviser Registration Application, a Form U-4, Uniform Application for Securities Industry Registration or Transfer, for the designated officer and for each investment adviser representative or solicitor to be registered, along with a disclosure document or Part 2 of Form ADV, and the registration fee of $275 for the investment adviser and $235 for the designated officer and each investment adviser representative to be registered...

Chairman Bachus Asks SEC and CFTC to Explain Pace of Dodd-Frank Rulemaking and How Comments are Analyzed

Posted on March 11, 2011
In a letter to the SEC and CFTC, House Financial Services Chair Spencer Bachus (R-AL) said that the Committee is troubled by the volume and pace of rulemakings under the Dodd-Frank Act and asked the Commissions to explain what steps they are taking to ensure that proposed Dodd-Frank rulemakings provide comment periods sufficient to address the number of proposed rules and the breadth of issues addressed by the rules, as well as ensure consistency across agencies, and provide regulatory flexibility for small entities...

Key Senator Urges Appropriations Committee to Fully Fund SEC and CFTC

Posted on March 10, 2011
In a letter to the Appropriations Committee, Senator Robert Menendez (D-NJ) urged that the SEC and CFTC be funded for the balance of FY 2011 at the levels provided in S. 3677, the Senate Committee bill reported to the Senate in July 2010 and at the levels requested in the President's FY 2012 budget for the following year...

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