Category Archives: Financial Regulation

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Early Signs on Fintech from the Consumer Financial Protection Bureau

There is no doubt that the regulation of financial technology (fintech) companies is on the rise. Fintech companies broadly mean companies that provide products, services and technology where traditional banking and financial services leave off and technology takes off. Though all of the federal banking agencies and other agencies will play a vital role in … Continue Reading

SEC Raises Net Worth Threshold for ‘Qualified Client’ Status to $2.1 Million Effective Aug. 15, 2016

As it previously signaled it would do, on June 14, 2016, the SEC issued an Order (available here) increasing the net worth threshold for qualification as a “qualified client” under Rule 205-3 under the Advisers Act from $2 million to $2.1 million (the SEC did not adjust the assets under management of the adviser threshold, … Continue Reading

Fiduciary Standard Rule for Retirement Accounts Approved

The Department of Labor has given final approval to its long-anticipated “fiduciary standard” regulation.  The new rule – which has been in the works for nearly six years – requires financial advisors who provide investment recommendations for retirement accounts to meet a fiduciary standard by putting clients’ interests before their own.  Previously, a registered representative advising … Continue Reading

OCC Issues New Guidance and Policies on Enforcement Actions and Civil Monetary Penalties Against Institutions and Individuals

The Office of the Comptroller of the Currency (“OCC”) recently released new guidance on the process it uses when considering enforcement actions against banking institutions and individuals for potential non-compliance with Bank Secrecy Act (“BSA”) compliance program requirements and anti-money laundering (“AML”) rules.  At the same time, the OCC also issued a revised policy for … Continue Reading

Proposed Fiduciary Rule for Retirement Accounts One Step Closer to Reality

Last spring, the U.S. Department of Labor proposed a controversial new rule which would govern retirement accounts, including IRAs and qualified employer-sponsored plans.  The rule – which would impose a fiduciary standard of care on advisors who offer advice regarding retirement accounts – is now one step from being finalized.  The Labor Department recently delivered … Continue Reading

Manhattan and Miami Residential Real Estate Sales – What Are the New Treasury Department Anti-Money Laundering Requirements All About?

In January 2016, the Treasury Department announced “geographic targeting orders” (GTOs) that will require title insurance companies and their agents to obtain representative and ultimate beneficial ownership information when a legal entity purchases residential real estate in Manhattan or Miami-Dade County with purchases prices that exceed $3 million and $1 million, respectively. It is expected that this … Continue Reading

Opportunity to File a Refund Claim for Foreign Reinsures for Retrocession Policies

The IRS has decided to back off its position that the 1 percent excise tax is due on a policy of reinsurance where a foreign reinsurer reinsures a policy of reinsurance issued by another foreign reinsurer (referred to in the industry as a retrocession policy). Foreign reinsurers who have previously paid the excise tax on … Continue Reading

FINRA Set to Emphasize ‘Firm Culture’ and Ethics as Exam Priorities in 2016

FINRA recently released its 2016 Regulatory and Examination Priorities Letter, an annual event which serves to highlight both emerging and existing risks in the financial services industry. The letter serves as a guide to FINRA’s priorities for the upcoming year, and highlights the issues which FINRA deems most important to its regulatory mission at the moment. … Continue Reading

FINRA and MSRB Propose New Pay-to-Play Restrictions on Broker-Dealer Solicitors and Municipal Advisors; Rules Will Trigger SEC Investment Advisor Third-Party Solicitation Ban

On Dec. 16, 2015, the Financial Industry Regulatory Authority (FINRA) and Municipal Securities Rulemaking Board (MSRB) simultaneously filed with the Securities and Exchange Commission (SEC) rule proposals that will have broad and substantial impacts on the political giving of broker-dealers, investment advisers and municipal advisors and their ability to engage in business with governmental entities … Continue Reading

New New Guidance Regarding Barrier Options

In a recently released Chief Counsel Advice Memorandum (the CCA), the Internal Revenue Service broadened its scrutiny of so-called “barrier option” transactions, which taxpayers have used to defer recognition of income and to convert ordinary income and short-term capital gain to long-term capital gain.1  The government had previously announced that it would scrutinize these transactions … Continue Reading

New Withholding Tax Rules Will Impact Funds, Banks, and Insurance Companies

Regulations released under Section 871(m) of the Internal Revenue code in September of this year go into effect on Jan. 1, 2017.  These rules will have a significant effect on offshore funds and other investors which take positions in U.S. equity derivatives, as well as on broker dealers. Under these rules, all payments on derivatives … Continue Reading

FINRA Accelerates Public Reporting of Certain Disclosure Information

On Nov. 30, 2015, the SEC approved a change to FINRA’s rule regarding release of certain disclosure information on the BrokerCheck Website. The change will release certain adverse information reported to BrokerCheck on Form U4, U5, or U6, three days after such information is received by FINRA, rather than the current fifteen days. FINRA has announced that … Continue Reading

Recent Supreme Court Decisions Impacting Federal Regulatory and Administrative Law Issues

Financial firms and their regulators can be significantly affected by U.S. Supreme Court decisions, particularly those that address matters relating to federal administrative law. As the Supreme Court begins a new term, its docket includes several cases that could have significantly impact litigation involving the Administrative Procedure Act and other federal regulations.  Last term, the … Continue Reading

A Shift of Emphasis at the DOJ – the Yates Memo

On September 15, 2015, Deputy Attorney General Yates issued a memo shifting the focus of federal prosecutorial efforts with respect to corporate wrong-doing. The memorandum encouraged DOJ prosecutors who identify corporate wrong-doing to shift the emphasis, at least in part, to the individuals who commit corporate wrong-doing, rather than focusing only on the entity. (This … Continue Reading

FINRA Announces Proposed New Rules to Protect Senior Investors

FINRA has proposed new rules to protect senior investors and other vulnerable adults from financial exploitation. The proposed rules would require member firms to make reasonable efforts, at the time of account opening for a senior investor, to obtain the name and contact information of a trusted contact person. The proposed rules would also allow firms to … Continue Reading

Voluntary Disclosure to Regulators May Result in Waiver of Privileges

When producing documents to regulators, financial services firms should remain mindful that such disclosures may inadvertently waive attorney-client privilege and work product protection as to third parties.  In In re Steinhardt Partners, L.P., the Second Circuit held that the voluntary disclosure of documents to the SEC waived any work product protection of the same documents … Continue Reading

Senate Banking Committee Approves Changes to Dodd-Frank on Party-Line Vote

On May 21, 2015, the Senate Banking Committee approved by a 12-10 vote a financial regulatory reform package developed by the Committee’s Chairman, Richard Shelby (R-AL) that includes the most significant changes to Dodd-Frank since the law was enacted nearly five years ago. In this Alert, the author discusses the package’s components and what is … Continue Reading
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