This document on Rule 22c-2 provides an overview of the regulation, what it means for your firm, and its costs and risks. But it also delves further, revealing ways mutual fund companies can leverage client relationship management (CRM) systems to facilitate compliance and uncovering an overlooked upside to 22c-2 compliance: unprecedented insight into sources of profitability.
The Impact Of The Financial Reform Act On BanksMVeith07
The document summarizes key aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its expected impact on banks and other financial institutions. Some of the main points include:
- The Act introduces higher oversight and regulation to promote stability among financial institutions. It gives regulators expanded authority to seize and break up large failing institutions.
- Key changes include the Volcker Rule limiting proprietary trading, new derivatives trading rules, higher capital requirements, and new mortgage lending standards.
- The expected impact is a decline in profit margins as risky proprietary trading ends. Large banks must rely more on traditional banking. Smaller banks may be forced to expand to meet higher capital rules.
The CFPB released an updated version of its Supervision and Examination Manual to reflect changes made to consumer financial regulations and examination procedures. The manual provides guidance for examiners in overseeing companies' compliance with consumer protection laws. Key changes included renumbering regulations to incorporate the CFPB's rulemaking responsibilities as well as updates to procedures for laws on mortgages, credit cards, credit reports, and other topics. The CFPB will use the manual to focus on risks to consumers, apply consistent standards across different types of financial institutions, and coordinate oversight with other regulators.
The Financial Services Industry Monthly Bulletin is a banking and finance law publication by Reff & Associates (correspondent law firm of Deloitte Romania) and Deloitte Tax.
Each month, our specialist team of finance lawyers and tax advisors will keep you updated with the latest legal, regulatory and tax developments in the financial services industry in Romania as well as with the recent changes and trends in the international financial regulations.
The areas covered by our bulletin include:
Banking and non-banking financial institutions
Capital markets
Insurance companies
Private pension funds
Authorisation under the new Consumer Credit regimeRachel Tandy
As of 1 April 2014. consumer credit businesses must now be authorised under FSMA rather than licensed under the Consumer Credit Act. These slides summarise the key changes.
FASB Update - presented by McGladrey at June 2011 NYSSCPA Private Company Acc...Brian Marshall
The document summarizes recent updates from the FASB, including significant accounting standards updates issued in 2010-2011. It discusses updates related to disclosures about credit quality and troubled debt restructurings, consolidation of repurchase agreements, impairment testing of goodwill, and accounting for costs of acquiring insurance contracts. The document also provides an overview of the FASB's priorities and recent board member changes.
REGULATIONS SURROUNDING THE LISTING OF Varun Vaish
The document discusses regulations surrounding the listing of securitized debt instruments in India. It outlines how amendments to the Securities Contracts Regulation Act in 2007 allowed securitized debt instruments to be publicly traded. SEBI then issued regulations in 2008 governing public offerings and listings of securitized debt instruments. This created a new market for these instruments with various players like originators, special purpose entities, trustees, and investors. SEBI also issued a listing agreement in 2011 to improve transparency and disclosure requirements for listed securitized debt instruments. However, issues around foreclosure laws and tax treatment of special purpose vehicle trusts still affect growth of the securitized debt market in India.
Dodd Frank Overview Eco Risk January 2011tabatangelo
The document summarizes the Dodd-Frank Act's impact on derivatives regulation, focusing on key issues affecting non-financial ("end-user") companies. It identifies three main areas of impact: 1) reduced market liquidity as regulations constrain dealers; 2) increased compliance burdens from new record-keeping and reporting rules; 3) effects of standardized margin and capital rules that may divert funds from long-term investments. The document provides an overview of new regulatory entities and requirements and how companies can prepare for changes taking effect in mid-2011.
The Impact Of The Financial Reform Act On BanksMVeith07
The document summarizes key aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act and its expected impact on banks and other financial institutions. Some of the main points include:
- The Act introduces higher oversight and regulation to promote stability among financial institutions. It gives regulators expanded authority to seize and break up large failing institutions.
- Key changes include the Volcker Rule limiting proprietary trading, new derivatives trading rules, higher capital requirements, and new mortgage lending standards.
- The expected impact is a decline in profit margins as risky proprietary trading ends. Large banks must rely more on traditional banking. Smaller banks may be forced to expand to meet higher capital rules.
The CFPB released an updated version of its Supervision and Examination Manual to reflect changes made to consumer financial regulations and examination procedures. The manual provides guidance for examiners in overseeing companies' compliance with consumer protection laws. Key changes included renumbering regulations to incorporate the CFPB's rulemaking responsibilities as well as updates to procedures for laws on mortgages, credit cards, credit reports, and other topics. The CFPB will use the manual to focus on risks to consumers, apply consistent standards across different types of financial institutions, and coordinate oversight with other regulators.
The Financial Services Industry Monthly Bulletin is a banking and finance law publication by Reff & Associates (correspondent law firm of Deloitte Romania) and Deloitte Tax.
Each month, our specialist team of finance lawyers and tax advisors will keep you updated with the latest legal, regulatory and tax developments in the financial services industry in Romania as well as with the recent changes and trends in the international financial regulations.
The areas covered by our bulletin include:
Banking and non-banking financial institutions
Capital markets
Insurance companies
Private pension funds
Authorisation under the new Consumer Credit regimeRachel Tandy
As of 1 April 2014. consumer credit businesses must now be authorised under FSMA rather than licensed under the Consumer Credit Act. These slides summarise the key changes.
FASB Update - presented by McGladrey at June 2011 NYSSCPA Private Company Acc...Brian Marshall
The document summarizes recent updates from the FASB, including significant accounting standards updates issued in 2010-2011. It discusses updates related to disclosures about credit quality and troubled debt restructurings, consolidation of repurchase agreements, impairment testing of goodwill, and accounting for costs of acquiring insurance contracts. The document also provides an overview of the FASB's priorities and recent board member changes.
REGULATIONS SURROUNDING THE LISTING OF Varun Vaish
The document discusses regulations surrounding the listing of securitized debt instruments in India. It outlines how amendments to the Securities Contracts Regulation Act in 2007 allowed securitized debt instruments to be publicly traded. SEBI then issued regulations in 2008 governing public offerings and listings of securitized debt instruments. This created a new market for these instruments with various players like originators, special purpose entities, trustees, and investors. SEBI also issued a listing agreement in 2011 to improve transparency and disclosure requirements for listed securitized debt instruments. However, issues around foreclosure laws and tax treatment of special purpose vehicle trusts still affect growth of the securitized debt market in India.
Dodd Frank Overview Eco Risk January 2011tabatangelo
The document summarizes the Dodd-Frank Act's impact on derivatives regulation, focusing on key issues affecting non-financial ("end-user") companies. It identifies three main areas of impact: 1) reduced market liquidity as regulations constrain dealers; 2) increased compliance burdens from new record-keeping and reporting rules; 3) effects of standardized margin and capital rules that may divert funds from long-term investments. The document provides an overview of new regulatory entities and requirements and how companies can prepare for changes taking effect in mid-2011.
NAMA will purchase the riskiest loans from Irish banks in order to free up their capital and ensure their ability to lend. The loans will be purchased at a discount of 30% on average from their book value. NAMA will have powers to manage the loans to achieve the best return for the taxpayer. The legislation establishing NAMA has been passed and loans are expected to start being transferred in early 2010, however the exact timing remains unclear.
Sameera Kapasi Mahendru graduated from Tufts University with a B.A. in International Relations, and Boston University with a dual J.D/M.A. (International Relations). She was admitted to the Massachusetts Bar in 1997 and the Texas Bar in 2002. She began her legal career as a civil litigator at Boston law firms in practice areas ranging from medical malpractice to commercial litigation. Prior to joining the City of Houston Legal Department, Ms. Mahendru practiced tax litigation with the Massachusetts Department of Revenue. Ms. Mahendru joined the City of Houston Legal Department in 2003, and is currently practicing as an Assistant City Attorney in the General Counsel Section where she works on issues related to tax, annexation, and public finance.
Gary L. Wood graduated from the University of Texas, B.A. magna cum laude in 1963, and from New York University, J.D. cum laude in 1966 where he was an editor of the Law Review. Mr. Wood was with the law firm of Baker & Botts (1969-1977), was Senior Vice President and General Counsel of the investment banking firm Rotan Mosle, Inc. (1978-1986) and has served as a Senior Attorney with FDIC. Mr. Wood joined the City of Houston Legal Department in 1994 and is currently practicing as a Senior Assistant City Attorney in the General Counsel Section.
Mr. Wood has specialized in municipal finance law since joining the City and has over 40 years experience in the area of municipal and corporate finance law, including extensive work on securities disclosure issues.
Fletcher International, Ltd. filed for Chapter 11 bankruptcy in the Southern District of New York. The document includes Fletcher International's schedules of assets and liabilities as required by the bankruptcy code. It notes that the schedules are unaudited and subject to ongoing review and potential adjustment. It also includes global notes describing Fletcher International's significant accounting policies and limitations on the information provided in the schedules.
This document summarizes a statement of financial affairs filed by Fletcher International, Ltd. in its Chapter 11 bankruptcy case. The statement provides global notes regarding limitations and disclosures for Fletcher's schedules of assets and liabilities. It notes that the schedules are unaudited and subject to ongoing review. It also describes Fletcher's accounting policies and treatments.
Rural-Metro - Aiding and Abetting (DealLawers) 3-9-16Kevin Miller
The document summarizes a Delaware Supreme Court case regarding aiding and abetting breach of fiduciary duty claims against a financial advisor, RBC Capital Markets. The key holdings were:
1) The board breached its fiduciary duties by approving a merger based on an unreasonable process influenced by RBC's actions to favor its own interests.
2) RBC knowingly participated in the breach by creating an informational vacuum and intentionally misleading the board, establishing scienter.
3) RBC was liable for aiding and abetting the breach of fiduciary duty, but financial advisors generally are not gatekeepers and liability requires egregious behavior like fraud on the board.
Smart Contracts in Financial Services: Getting from Hype to Reality. Reporteraser Juan José Calderón
Smart Contracts in Financial Services: Getting from Hype to Reality.
Executive Summary
The potential of smart contracts – programmable contracts that automatically execute when pre-defi ned conditions are met – is the subject of much debate and discussion in the fi nancial services industry.
Smart contracts, enabled by blockchain or distributed ledgers, have been held up as a cure for many of the problems associated with traditional fi nancial contracts, which are simply not geared up for the digital age. Reliance on physical documents leads to delays, ineffi ciencies and increases exposure to errors and fraud. Financial intermediaries, while providing interoperability for the fi nance system and reducing risk, create overhead costs for and increase compliance requirements.
In this report, we aim to cut through the speculation and hype around the potential of smart contracts. We have conducted detailed discussions with fi nancial services industry professionals, prominent smart contract startups, and academics (see Research Methodology at the end of this paper). Our study confi rms that smart contract adoption will lead to reduced risks, lower administration and service costs, and more effi cient business processes across all major segments of the fi nancial services industry. These benefi ts will accrue from technology, process redesign as well as from fundamental changes in operating models, as they require a group of fi rms to share a common view of the contract between trading parties. Consumers will benefi t from more competitive products, such as mortgage loans and insurance policies, along with simpler processes that are free of many of the hassles of today’s customer experience.
CFPB Finalizes Ability-to-Repay Rule for Mortgage LendersPatton Boggs LLP
The CFPB finalized rules on ability-to-repay requirements for mortgage lenders, including defining a "Qualified Mortgage." Lenders must verify borrowers' income, assets, debts and be able to repay both principal and interest long-term. Loans meeting certain standards including debt-to-income ratios below 43% qualify as Qualified Mortgages, for which lenders are presumed compliant. The CFPB also proposed exemptions for smaller lenders and nonprofit programs. The rules seek to prevent risky lending and take effect January 2014.
This document provides guidance on preparing the balance sheet format according to the Companies Act, 1956 and Schedule VI. It discusses the key components of the balance sheet including share capital, reserves and surpluses, non-current liabilities, current liabilities, non-current assets, current assets, and notes on the classification and presentation of items. The document also provides accounting treatments and disclosure requirements for items like share capital, borrowings, investments, provisions, taxation etc. according to Indian accounting standards.
The Determinations Committee ruled that Greece's use of collective action clauses to force holders to accept a debt exchange constituted a restructuring credit event under the ISDA definitions. It took time for a ruling because Greece had not invoked collective action clauses when the plan was first announced. The committee will hold an auction on March 19th to determine recovery value and calculate net payouts for CDS contracts.
The document provides a summary of recent regulatory changes and updates from the Ministry of Corporate Affairs, Reserve Bank of India, and Securities and Exchange Board of India. Key points include:
1) MCA will receive names of over 500 companies that violated CIS rules from SEBI and take necessary actions to prevent involvement in new companies.
2) Developers of National Manufacturing Investment Zones can now avail of external commercial borrowings under the "approval route" for infrastructure development.
3) RBI has delegated powers to banks to approve reductions in ECB amounts, costs, and drawdown schedules subject to conditions.
This presentation is designed for those with responsibilities in the areas of compliance, human resources, lending, audit and management of Credit Unions and their mortgage lending subsidiaries. It will explain the necessary steps to take to be compliant with the new SAFE Act requirements.
This document provides an overview of the structure and key points that will be discussed in a paper on central clearing of derivatives and the benefits of loss mutualization. It discusses the history and operation of clearinghouses, comparing clearing of securities and derivatives. Central clearing of derivatives provides benefits like loss mutualization, where losses from a member default are shared across other members. The document analyzes how loss mutualization functioned in the Panic of 1907 and how its absence contributed to the 2008 crisis. It also discusses Dodd-Frank reforms and debates around segregation of customer collateral.
The document discusses regulatory technology (RegTech) solutions for anti-money laundering (AML) and counter-terrorist financing (CTF). It covers HKMA's RegTech initiatives, remote account opening using digital identity verification, automated name screening, transaction monitoring, and network analysis. Remote account opening involves verifying the authenticity of identity documents and matching facial images. Name screening includes priority screening, web/API searches, and batch screening. Transaction monitoring identifies irregular transactions that deviate from normal patterns using machine learning.
The document discusses the redesigned Uniform Residential Loan Application (URLA) form and the Uniform Mortgage Data Program (UMDP) implemented by Fannie Mae and Freddie Mac. It describes how the UMDP standardizes loan data to improve efficiency and transparency. It also summarizes the components of the redesigned URLA, including additional forms and sections for borrower information, property details, loan terms, and demographic data collection. The redesign aims to remove ambiguities, provide consistent definitions, and ensure loan eligibility for purchase by the GSEs.
Creditor\'s Rights and Bankruptcy Issues in Real Estate Lawterigrasmussen
Discusses how creditors should deal with a recently filed case, the automatic stay, leasing, use and sale of assets, and nonbankruptcy remedies available to creditors, including receiverships, foreclosures, creditors\' bill, charging order, and assignments for the benefit of creditors
This document summarizes a presentation by Terry W. Clemans on rapid rescoring and compliance infractions. The presentation discusses (1) new conflicts between various financial regulations regarding loan originator compensation and the rescoring of mortgages, (2) definitions of compensation under the relevant rules, and (3) issues with the Credit Repair Organization Act's prohibition of upfront fees for credit services that could restrict how rescoring fees are charged. The presentation seeks answers to compliance challenges but notes more legislative or regulatory action may be needed to resolve conflicts between the rules.
This document summarizes and analyzes proposed SEC Rule 22c-2, which would require mutual funds to impose mandatory 2% redemption fees on certain short-term redemptions. It discusses the SEC's goal of deterring abusive trading practices that harm long-term investors. It also notes that while the proposed rule aims to address abusive trading, it could unduly burden financial intermediaries due to complex reporting requirements and potentially apply fees to ordinary investors not engaged in abusive practices. The document provides an overview of the proposed rule and debates its potential effectiveness and drawbacks.
By 1st December 2015, BCBS-IOSCO rules mean that all eligible financial and non-financial counterparties must be able to exchange bilateral Variation Margin (VM) and Initial Margin (IM) with their OTC derivatives counterparties. The consequences of this extend far beyond methodology, requiring a re-evaluation of the whole end to end workflow.
Grant Thornton - Broker-dealer industry Hot Topics - symposiumGrant Thornton
The panel discussed several regulatory issues facing the broker-dealer industry, including enhanced capital and liquidity requirements under Basel III, fiduciary standards for broker-dealers and investment advisors, implementation of the Volcker Rule, and increased focus on custody practices. Concerns were raised about requirements for swaps data reporting and ensuring the protection of customer funds.
NAMA will purchase the riskiest loans from Irish banks in order to free up their capital and ensure their ability to lend. The loans will be purchased at a discount of 30% on average from their book value. NAMA will have powers to manage the loans to achieve the best return for the taxpayer. The legislation establishing NAMA has been passed and loans are expected to start being transferred in early 2010, however the exact timing remains unclear.
Sameera Kapasi Mahendru graduated from Tufts University with a B.A. in International Relations, and Boston University with a dual J.D/M.A. (International Relations). She was admitted to the Massachusetts Bar in 1997 and the Texas Bar in 2002. She began her legal career as a civil litigator at Boston law firms in practice areas ranging from medical malpractice to commercial litigation. Prior to joining the City of Houston Legal Department, Ms. Mahendru practiced tax litigation with the Massachusetts Department of Revenue. Ms. Mahendru joined the City of Houston Legal Department in 2003, and is currently practicing as an Assistant City Attorney in the General Counsel Section where she works on issues related to tax, annexation, and public finance.
Gary L. Wood graduated from the University of Texas, B.A. magna cum laude in 1963, and from New York University, J.D. cum laude in 1966 where he was an editor of the Law Review. Mr. Wood was with the law firm of Baker & Botts (1969-1977), was Senior Vice President and General Counsel of the investment banking firm Rotan Mosle, Inc. (1978-1986) and has served as a Senior Attorney with FDIC. Mr. Wood joined the City of Houston Legal Department in 1994 and is currently practicing as a Senior Assistant City Attorney in the General Counsel Section.
Mr. Wood has specialized in municipal finance law since joining the City and has over 40 years experience in the area of municipal and corporate finance law, including extensive work on securities disclosure issues.
Fletcher International, Ltd. filed for Chapter 11 bankruptcy in the Southern District of New York. The document includes Fletcher International's schedules of assets and liabilities as required by the bankruptcy code. It notes that the schedules are unaudited and subject to ongoing review and potential adjustment. It also includes global notes describing Fletcher International's significant accounting policies and limitations on the information provided in the schedules.
This document summarizes a statement of financial affairs filed by Fletcher International, Ltd. in its Chapter 11 bankruptcy case. The statement provides global notes regarding limitations and disclosures for Fletcher's schedules of assets and liabilities. It notes that the schedules are unaudited and subject to ongoing review. It also describes Fletcher's accounting policies and treatments.
Rural-Metro - Aiding and Abetting (DealLawers) 3-9-16Kevin Miller
The document summarizes a Delaware Supreme Court case regarding aiding and abetting breach of fiduciary duty claims against a financial advisor, RBC Capital Markets. The key holdings were:
1) The board breached its fiduciary duties by approving a merger based on an unreasonable process influenced by RBC's actions to favor its own interests.
2) RBC knowingly participated in the breach by creating an informational vacuum and intentionally misleading the board, establishing scienter.
3) RBC was liable for aiding and abetting the breach of fiduciary duty, but financial advisors generally are not gatekeepers and liability requires egregious behavior like fraud on the board.
Smart Contracts in Financial Services: Getting from Hype to Reality. Reporteraser Juan José Calderón
Smart Contracts in Financial Services: Getting from Hype to Reality.
Executive Summary
The potential of smart contracts – programmable contracts that automatically execute when pre-defi ned conditions are met – is the subject of much debate and discussion in the fi nancial services industry.
Smart contracts, enabled by blockchain or distributed ledgers, have been held up as a cure for many of the problems associated with traditional fi nancial contracts, which are simply not geared up for the digital age. Reliance on physical documents leads to delays, ineffi ciencies and increases exposure to errors and fraud. Financial intermediaries, while providing interoperability for the fi nance system and reducing risk, create overhead costs for and increase compliance requirements.
In this report, we aim to cut through the speculation and hype around the potential of smart contracts. We have conducted detailed discussions with fi nancial services industry professionals, prominent smart contract startups, and academics (see Research Methodology at the end of this paper). Our study confi rms that smart contract adoption will lead to reduced risks, lower administration and service costs, and more effi cient business processes across all major segments of the fi nancial services industry. These benefi ts will accrue from technology, process redesign as well as from fundamental changes in operating models, as they require a group of fi rms to share a common view of the contract between trading parties. Consumers will benefi t from more competitive products, such as mortgage loans and insurance policies, along with simpler processes that are free of many of the hassles of today’s customer experience.
CFPB Finalizes Ability-to-Repay Rule for Mortgage LendersPatton Boggs LLP
The CFPB finalized rules on ability-to-repay requirements for mortgage lenders, including defining a "Qualified Mortgage." Lenders must verify borrowers' income, assets, debts and be able to repay both principal and interest long-term. Loans meeting certain standards including debt-to-income ratios below 43% qualify as Qualified Mortgages, for which lenders are presumed compliant. The CFPB also proposed exemptions for smaller lenders and nonprofit programs. The rules seek to prevent risky lending and take effect January 2014.
This document provides guidance on preparing the balance sheet format according to the Companies Act, 1956 and Schedule VI. It discusses the key components of the balance sheet including share capital, reserves and surpluses, non-current liabilities, current liabilities, non-current assets, current assets, and notes on the classification and presentation of items. The document also provides accounting treatments and disclosure requirements for items like share capital, borrowings, investments, provisions, taxation etc. according to Indian accounting standards.
The Determinations Committee ruled that Greece's use of collective action clauses to force holders to accept a debt exchange constituted a restructuring credit event under the ISDA definitions. It took time for a ruling because Greece had not invoked collective action clauses when the plan was first announced. The committee will hold an auction on March 19th to determine recovery value and calculate net payouts for CDS contracts.
The document provides a summary of recent regulatory changes and updates from the Ministry of Corporate Affairs, Reserve Bank of India, and Securities and Exchange Board of India. Key points include:
1) MCA will receive names of over 500 companies that violated CIS rules from SEBI and take necessary actions to prevent involvement in new companies.
2) Developers of National Manufacturing Investment Zones can now avail of external commercial borrowings under the "approval route" for infrastructure development.
3) RBI has delegated powers to banks to approve reductions in ECB amounts, costs, and drawdown schedules subject to conditions.
This presentation is designed for those with responsibilities in the areas of compliance, human resources, lending, audit and management of Credit Unions and their mortgage lending subsidiaries. It will explain the necessary steps to take to be compliant with the new SAFE Act requirements.
This document provides an overview of the structure and key points that will be discussed in a paper on central clearing of derivatives and the benefits of loss mutualization. It discusses the history and operation of clearinghouses, comparing clearing of securities and derivatives. Central clearing of derivatives provides benefits like loss mutualization, where losses from a member default are shared across other members. The document analyzes how loss mutualization functioned in the Panic of 1907 and how its absence contributed to the 2008 crisis. It also discusses Dodd-Frank reforms and debates around segregation of customer collateral.
The document discusses regulatory technology (RegTech) solutions for anti-money laundering (AML) and counter-terrorist financing (CTF). It covers HKMA's RegTech initiatives, remote account opening using digital identity verification, automated name screening, transaction monitoring, and network analysis. Remote account opening involves verifying the authenticity of identity documents and matching facial images. Name screening includes priority screening, web/API searches, and batch screening. Transaction monitoring identifies irregular transactions that deviate from normal patterns using machine learning.
The document discusses the redesigned Uniform Residential Loan Application (URLA) form and the Uniform Mortgage Data Program (UMDP) implemented by Fannie Mae and Freddie Mac. It describes how the UMDP standardizes loan data to improve efficiency and transparency. It also summarizes the components of the redesigned URLA, including additional forms and sections for borrower information, property details, loan terms, and demographic data collection. The redesign aims to remove ambiguities, provide consistent definitions, and ensure loan eligibility for purchase by the GSEs.
Creditor\'s Rights and Bankruptcy Issues in Real Estate Lawterigrasmussen
Discusses how creditors should deal with a recently filed case, the automatic stay, leasing, use and sale of assets, and nonbankruptcy remedies available to creditors, including receiverships, foreclosures, creditors\' bill, charging order, and assignments for the benefit of creditors
This document summarizes a presentation by Terry W. Clemans on rapid rescoring and compliance infractions. The presentation discusses (1) new conflicts between various financial regulations regarding loan originator compensation and the rescoring of mortgages, (2) definitions of compensation under the relevant rules, and (3) issues with the Credit Repair Organization Act's prohibition of upfront fees for credit services that could restrict how rescoring fees are charged. The presentation seeks answers to compliance challenges but notes more legislative or regulatory action may be needed to resolve conflicts between the rules.
This document summarizes and analyzes proposed SEC Rule 22c-2, which would require mutual funds to impose mandatory 2% redemption fees on certain short-term redemptions. It discusses the SEC's goal of deterring abusive trading practices that harm long-term investors. It also notes that while the proposed rule aims to address abusive trading, it could unduly burden financial intermediaries due to complex reporting requirements and potentially apply fees to ordinary investors not engaged in abusive practices. The document provides an overview of the proposed rule and debates its potential effectiveness and drawbacks.
By 1st December 2015, BCBS-IOSCO rules mean that all eligible financial and non-financial counterparties must be able to exchange bilateral Variation Margin (VM) and Initial Margin (IM) with their OTC derivatives counterparties. The consequences of this extend far beyond methodology, requiring a re-evaluation of the whole end to end workflow.
Grant Thornton - Broker-dealer industry Hot Topics - symposiumGrant Thornton
The panel discussed several regulatory issues facing the broker-dealer industry, including enhanced capital and liquidity requirements under Basel III, fiduciary standards for broker-dealers and investment advisors, implementation of the Volcker Rule, and increased focus on custody practices. Concerns were raised about requirements for swaps data reporting and ensuring the protection of customer funds.
Blockchain Smart Contracts - getting from hype to reality Capgemini
The potential of smart contracts – programmable contracts that automatically execute when pre-defined conditions are met – is the subject of much debate and discussion in the financial services industry. Smart contracts, enabled by blockchain or distributed ledgers, have been held up as a cure for many of the problems associated with traditional financial contracts, which are simply not geared up for the digital age. Reliance on physical documents leads to delays, inefficiencies and increases exposure to errors and fraud. Financial intermediaries, while providing interoperability for the
finance system and reducing risk, create overhead costs for and increase compliance requirements.
In this report, we aim to cut through the speculation and hype around the potential of smart contracts. We have conducted detailed discussions with financial services industry professionals, prominent smart contract startups and academics (see Research Methodology at the end of this paper). Our study confirms that smart contract adoption will lead to reduced risks, lower administration and service costs, and more efficient business processes across all major segments of the financial services industry. These benefits will accrue from technology, process redesign as well as from fundamental changes in operating models, as they require a group of firms to share a common view of the contract between trading parties. Consumers will benefit from more competitive products, such as mortgage loans and insurance policies, along with simpler processes that are free of many of the hassles of today’s customer experience.
The document discusses the increasing use of the Legal Entity Identifier (LEI) across various financial regulations. It will be required in approximately 50 fields by 2018, up from less than a dozen currently. This expanded use of the LEI will require changes to firms' data landscape and management systems. Firms must analyze how the new requirements apply to their operations and trades. A consolidated approach is recommended to efficiently define all necessary changes at once.
This document provides an introduction and overview of FIDIC Conditions of Contract. It discusses what FIDIC is, the characteristics and application of FIDIC Conditions of Contract, and new developments. Some key points include: FIDIC has compiled construction contract conditions used globally for over 50 years; the 1999 editions include the Red, Yellow, and Silver Books; characteristics include unified terms, wider application, and more specific rights/obligations; new developments include the Gold Book for Design-Build-Operate contracts and improved dispute resolution methods.
PE Expense Allocation Article (00299582x9ED28)John T. Araneo
The SEC has increased scrutiny of private equity firms' expense allocation practices in recent years. It has identified several types of expenses that potentially involve conflicts of interest, including broken deal fees, portfolio monitoring fees, and legal/compliance expenses of the PE firm. The SEC views unclear or absent disclosures around expense allocation as breaches of fiduciary duty. It has brought numerous enforcement actions against large PE firms for improperly allocating expenses without sufficient disclosure, resulting in large fines. Going forward, PE firms must enhance their disclosures around expense allocation policies and implement robust compliance programs to avoid regulatory penalties from the SEC.
The Dodd-Frank Wall Street Reform and Consumer
Protection Act was signed into law in 2010 and ushered
in an overhaul of the US financial regulatory system so
sweeping that many of the regulations needed to fully
implement the law are still evolving in 2012. Enacted in
response to a financial crisis described as the “worst since
the Great Depression,” this massive piece of legislation
contains 16 titles, comprises 2,319 pages in its original
form, and calls for regulators from 22 separate federal
agencies to conduct dozens of new studies and create
hundreds of new rules.
This Substance of the Standard was prepared by MHM’s
Professional Standards Group to provide a timely update
of the regulations issued through March 31, 2012 — and
those that are expected in the months to come — so you
can prepare for the challenges that lie ahead.
Legal and regulatory aspect of project financeGagan Varshney
This document discusses the legal and regulatory aspects of project finance. It begins by explaining that every project finance is subject to some laws and regulations to allow for unanimous decisions, proper planning, timely actions, and clear allocation of duties. Section 2 notes that current trends involve strengthening project finance rules to bring certainty, clarity, and allow for quick decisions. Section 3 outlines the typical project configuration including a special purpose vehicle and key project parties such as sponsors, contractors, lenders, and government. It also describes some fundamental provisions of key contracts like shareholder agreements, EPC contracts, and O&M contracts. Section 4 predicts that future trends will involve new technologies affecting laws and regulations, requiring rules for financing new project completion techniques involving both human
The document discusses claims that may arise under the new FIDIC Conditions of Contract, including procedures for extension of time claims, payment claims, and dispute resolution. It notes that the contractor must provide a notice of claim within 28 days of becoming aware of the issue, and must follow up within 42 days with full supporting particulars. It describes the requirements for particulars, including linking causes of delay to periods of delay and providing factual evidence like correspondence and photographs.
A PRACTICAL GUIDE TO THE FAR MANDATORY DISCLOSURE RULE FAR 52.203-13dbolton007
This document provides an agenda and summary for a presentation on the FAR Mandatory Disclosure Rule FAR 52.203-13. Key points include:
1) The rule was created in response to low voluntary disclosure rates and high procurement fraud for the Department of Justice. It aims to increase mandatory reporting of violations.
2) The rule has three parts: requirements for disclosure, grounds for suspension/debarment, and a contractor code of business ethics. It requires disclosure of violations dating back to final payment on contracts.
3) Contractors must disclose credible evidence of criminal or civil violations to the agency Inspector General and contracting officer within a certain timeframe. The rule defines principals and mandatory disclosure requirements.
Mortgage_Compliance_Magazine_1.2015_-_xTRID_Are_you_AwarexJohn I. Vong
The document discusses the challenges of implementing the Consumer Financial Protection Bureau's (CFPB) new TILA-RESPA Integrated Disclosure (TRID) rules which integrate mortgage loan disclosures required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Some of the key challenges include: upgrading technology systems to accommodate the new rules, facilitating two-way communication between lenders and other systems, and increased operational risks and liability for lenders under the new rules. Lenders will need to closely collaborate with settlement agents and vendors to ensure a smooth transition.
The document summarizes key topics discussed at the 23rd annual FIA Law & Compliance Division Workshop, including security futures, access to foreign exchanges, and block trading. Regarding security futures, it outlines the new regulatory framework established by the Commodity Futures Modernization Act which designates them as both commodities and securities. It also discusses ongoing rulemaking efforts between the SEC and CFTC. For access to foreign exchanges, it compares the CFTC and SEC approaches. The CFTC allows direct customer access through automated order routing systems while the SEC focuses on best execution. It also notes the CFTC grants no-action letters to foreign exchanges while the SEC requires registration. Finally, it discusses the emergence
This document summarizes key aspects of managing non-performing assets (NPAs) for banks. It defines NPAs as loans that are overdue for more than 90 days. It discusses categories of NPAs, provisioning norms, and factors contributing to NPAs. It then outlines various NPA management strategies banks can take, including preventative measures, resolution through negotiation, Lok Adalats, corporate debt restructuring, and legal proceedings. The document also discusses selling NPAs to asset reconstruction companies or other banks.
The ability of an empowered CMA to carry out its supervisory and enforcement
mandate effectively fosters public confidence in the securities industry. An
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Pivotal CRM - Opportunity in 22c-2 Compliance
1. ExEcutivE BriEf
uncovering the Opportunity
in 22c-2 compliance
Executive Summary
Many mutual fund wholesalers are currently struggling with the expensive and time-
consuming challenge of complying with SEC Rule 22c-2—a task that may appear to
be all cost with no resulting benefit. This executive brief provides an overview of the
regulation, what it means for your firm, and its costs and risks. But it also delves further,
revealing ways mutual fund companies can leverage client relationship management
(CRM) systems to facilitate compliance and uncovering an overlooked upside to 22c-2
compliance: unprecedented insight into sources of profitability.
2. Introduction Omnibus Accounts
The basis for Rule 22c-2 is simple and decent: It’s As part of the investigations into market timing, a further
founded on the notion that all mutual fund shareholders issue was revealed: a fund’s inability to monitor individual
deserve fair and equal treatment. Smaller long-term investor activities in omnibus accounts. Omnibus transac-
mutual fund shareholders using the instruments as they tions register with a fund distributor as a single purchase
were intended should not be placed at a disadvantage by a financial intermediary, though they in fact represent
due to manipulation of the system by larger players an aggregate of multiple underlying shareholder accounts.
looking for short-term gains. The fund lacks knowledge of the underlying shareholders’
identities and transactions. Because only the financial
Responding to this regulation, however, is proving intermediary (broker-dealer, bank, retirement plan
anything but simple for many mutual fund wholesalers. administrator, or similar body) knows the sub-account
The costs, complexities, phases, and deadlines for com- information, the fund is unable to effectively monitor for
pliance have many mutual fund wholesalers throwing up market-timing activities and other violations. Since 35% of
their hands in exasperation. As with a lot of compliance mutual fund accounts are held in omnibus positions, this
initiatives, compliance with Rule 22c-2 feels to many like represents a significant “blind spot” for fund companies
a grudging necessity: a drain on resources that raises that could be taken advantage of by those involved in
the cost and difficulty of doing business with little visible illicit trades.
upside for the complying firm.
In response, Rule 22c-2 requires funds to enter into agree-
But is it? This executive brief looks at the nature and ments (known as “shareholder information agreements”)
impact of 22c-2 and examines how a flexible client with their intermediaries that enable fund management
relationship management system can assist in managing to identify investors whose trades contravene the fund’s
some aspects of 22c-2 compliance. Furthermore, it short-term trading policies. Under these agreements,
uncovers a silver lining that a firm can find in 22c-2 which must be made with each first-tier intermediary, the
compliance using the right CRM solution: for the first time intermediary must agree to provide shareholder identity
ever, total insight into sources of profitability. (the taxpayer identification number or “TIN”) and transac-
tion information at the fund’s request and to comply
with the fund’s instructions regarding the restriction or
22c-2: The Basics prohibition of future purchases or exchanges related to
shareholders found to have violated the fund’s policies.
Rule 22c-2 is the Securities and Exchange Commission’s
These agreements must be kept on file for six years.
response to the market-timing scandals that rocked the
industry in late 2003 and 2004, as then New York State
Attorney General Eliott Spitzer began to act on fraudulent
and illegal activities turned up by his office’s investigation
What Does It Mean for You?
of the mutual fund industry. The industry’s traditionally In a nutshell, Rule 22c-2 means a lot of work for mutual
spotless image was tarnished by a series of scandals, fund companies. In addition to board decisions regarding
which centered on market-timing activities such as late redemption fees (which should by now be complete,
trading and time-zone arbitrage. given the October 6, 2006, deadline), fund companies
must identify all of the bodies they interact with that fit
In response, the SEC first proposed prospectus disclo- the SEC’s definition of intermediaries for the purposes of
sure of funds’ market-timing policies and procedures and this rule—a formerly broad category that was mercifully
later proposed mandatory redemption fees. In March narrowed in amendments to the rule that took effect late
2005, this culminated in the creation of Rule 22c-2 under in 2006.2 Fund companies must then ensure that they
the Investment Company Act of 1940. have negotiated and signed shareholder information
agreements with each intermediary and keep them
Redemption Fees readily accessible for six years. And that’s just the
beginning—after that they must figure out how to receive
One of the industry’s primary tools for deterring market- omnibus account information from these intermediaries
timing activities is the use of redemption fees, which raise and how to effectively monitor this data for compliance
the cost of holding short-term positions in funds, render- with their market-timing rules.
ing them less attractive and profitable for prospective
market-timers. While Rule 22c-2 ultimately did not make
redemption fees mandatory, it does require that if a fund
redeems shares within seven days (which most do), its Delano, Peter. “Rule 22c-2, the SEC's Response to Market Timing:
board must consider whether to impose redemption fees Implications for the Mutual Fund Industry.” TowerGroup, August 2005.
of up to 2% of the value of the shares redeemed. 2 See Securities and Exchange Commission, 7 CFR Part 270, [Release
No. IC-27504; File No. S7-06-06; File No. 4-52] for full details of the
amendments: http://www.sec.gov/rules/final/2006/ic-27504.pdf.
Pivotal CRM | Executive Brief
3. The original date for fund companies to have negotiated be $67.8 million—far higher than the SEC estimate of
these agreements for compliance with 22c-2 was October $86.7 million.6 And evidence from individual fund compa-
6, 2006, but the SEC extended it to April 6, 2007, in nies and intermediaries appears to confirm that the SEC
response to widespread requests. They also extended grossly underestimated compliance costs—Oppenheimer
by a full year (until October 6, 2007) the date by which Funds put the figure of $672,000 on its initial build and
funds “must be able to request and promptly receive $3.7 million on its annual maintenance costs, and interme-
shareholder identity and diary First Trust Corp. estimates its annual administration
transaction information pursu- costs at four times the SEC’s figure.7
Mutual fund companies can ant to shareholder information
expect that the SEC will be agreements.”3 These exten-
The Risk: Multi-Million-Dollar Fines
taking non-compliance with sions were a brief reprieve,
but mutual fund companies Since the deadlines for many components of Rule
Rule 22c-2 very seriously— 22c-2 compliance have been extended and it has not
are still scrambling to meet
and imposing fines 22c-2’s requirements. yet come into full effect, no fines have yet been laid
accordingly. for non-compliance. But if evidence from before the
The technical demands are introduction of the new rule is any indication, fines will be
daunting. To monitor activities substantial. Fines levied by the SEC for market timing and
and identities in omnibus accounts, mutual fund compa- late trading before the implementation of 22c-2 included
nies need to be able to receive a massive influx of data $675 million for Bank of America/FleetBoston Financial,
from in many cases a large number of intermediaries, all $600 million for Alliance Capital Management, $350
of which can have different data standards and systems. million for Massachusetts Financial Services, and $40
million for Capital Canary Partners.8 Now that a stricter
A variety of technical solutions to this problem rule is in place, clarifying some of the previously existing
have arisen. For example, some of the larger plan gray areas, mutual fund companies can expect that the
administrators, including Fidelity, Charles Schwab, and SEC will be taking non-compliance with Rule 22c-2 very
TD Ameritrade are offering portals into their omnibus seriously—and imposing fines accordingly.
accounts that allow fund companies to view trade
activities in real time.4 In addition, the Depository Trust
Clearing Corp. (DTCC) added functionality to its What Role Can CRM Play in Helping You
“Networking” service in 2006. The new features, devel- Meet the Challenges of 22c-2?
oped in conjunction with the Investment Company Institute
With the staggering costs and complexities of Rule 22c-2
(ICI), provide a standardized data format for the exchange
compliance, mutual fund companies need to look at what
of individual account trade activity from omnibus transac-
systems they may already have in place that can assist in
tions between intermediaries and fund companies. Other
managing the compliance process—or at ways they can
software vendors have also developed rule-engine tools
justify the purchase of systems that will assist in compli-
for monitoring trade data and outsourcing options for
ance initiatives while also delivering additional benefits.
firms that want to fully offload 22c-2 compliance.
The problem with 22c-2 compliance initiatives, like many
The Costs compliance projects, is that they focus a firm’s efforts,
resources, and technology expenditures on meeting
Whatever solution mutual fund wholesalers choose for certain very specific regulatory requirements. Of course,
22c-2 compliance, the bottom line is a sizeable cost. The this is not optional: the requirements are mandated
SEC estimated the bill for 22c-2 compliance as a one-time and firms must move quickly to comply or face severe
cost of $00,000 and annual ongoing maintenance penalties. But what this does tend to do is focus the firm’s
of slightly more than $6500 per fund company, with efforts narrowly on technology solutions and processes
intermediaries incurring an initial cost of $50,000 and that will meet the regulatory requirements alone, rather
ongoing annual costs of $60,000 each. Many other than on larger solutions that address business issues
groups disagree with the SEC’s estimates. The ICI feels beyond just compliance. This sort of mindset can prevent
the SEC’s figures underestimate the costs of ongoing firms from seeing larger opportunities in their compliance
systems maintenance.5 TowerGroup estimates the full activities—or how other kinds of technology initiatives can
three-year cost of compliance with 22c-2 (2005-2008) to play a role in meeting these demands.
3 Ibid. 6 TowerGroup, “Rule 22c-2 Costs to Mutual Funds: SEC Estimates
vs. TowerGroup Estimates (2005-2008),” Exhibit #44: 5M-E7
4 Levine, Cory. “Get On the Omnibus: The Mutual Fund Industry Gears up
August 0, 2005.
for 22c-2.” Wall Street Technology, August 22, 2006.
URL: http://www.wallstreetandtech.com/story/showArticle.jhtml?articleID 7 Levine, Cory. “Get On the Omnibus: The Mutual Fund Industry Gears up
=9220285pgno=. for 22c-2.” Wall Street Technology, August 22, 2006.
5 Ibid. 8 Atkinson, James. “The Mutual Fund Industry Scandal and What Is Being
Done to Correct It,” April 22, 2004.
Pivotal CRM | Executive Brief 2
4. Client relationship management (CRM) systems are a information hubs, CRM systems can be integrated with
case in point. CRM systems, however robust, are not the fund company’s portfolio valuation systems, market-
compliance solutions and never will be, and it often timing rule engines, back-office systems, and more to
makes sense, given the complexities of meeting the provide a single point of information access for users,
requirements of regulations such as 22c-2, to implement offering a holistic view that provides insight beyond just
a purpose-built system for compliance. But a good CRM compliance data.
system can nonetheless
be instrumental in meeting
With aCRM system designed aspects of 22c-2 compliance.
The Opportunity: Better Insight into
to aggregate the kinds of Broker-Dealer Profitability
As centralized repositories of
information that are most all a mutual fund firm’s rela-
With all the costs and complexities of complying with Rule
valuable to fund wholesalers, 22c-2, it’s no wonder most mutual funds see no upside
tionship data, CRM systems
to their 22c-2 compliance initiatives. But if they look a little
fund companies have an are the perfect resource for
harder—and have the right CRM system in place—there’s
unprecedented opportunity identifying which intermediar-
a compelling opportunity underlying compliance with
ies a mutual fund company
to achieve 360-degree insight Rule 22c-2.
must enter into shareholder
into sources of profitability, information agreements with. Because mutual fund companies sell to investors through
unfettered by the lack of Now that the SEC has intermediaries, their intermediaries are effectively their
transparency of omnibus narrowed and redefined this sales force. As with any sales force, the fund company
accounts. group to include only first-tier needs insight into which broker-dealers are perform-
intermediaries and to exclude ing—who’s making them money, who’s costing them—so
small intermediaries that the they can focus their efforts on maximizing their advantage
fund treats as individual investors, the number of interme- with their most profitable broker-dealers and attempting
diaries with which funds have to enter into agreements new strategies with those that aren’t performing. But the
has dropped, but the importance of determining the lack of transparency due to omnibus and super-omnibus
relationship type has increased. Not only does the CRM positions has traditionally stood in the way of true insight
system house this kind of information, but a flexible CRM into broker-dealer profitability. Once in compliance with
system should allow fund companies to easily classify 22c-2, however, mutual fund companies have all the raw
an account as an intermediary and to clearly identify the information they need to fully assess their sources of
account’s status with regard to shareholder information profitability—if they have the right tools.
agreements. Similarly, with a wealth of contact information
for each account, the CRM system should enable the fund This is where the right CRM system can be indispens-
to easily identify the right contacts within each account to able. With a CRM system designed to aggregate the
engage in the process of negotiating a shareholder infor- kinds of information that are most valuable to fund
mation agreement, which can otherwise be difficult given wholesalers, fund companies have an unprecedented
the many layers of relationships that exist between a fund opportunity to achieve 360-degree insight into sources
company and the many arms of larger intermediaries. of profitability, unfettered by the lack of transparency of
omnibus accounts. The right CRM system will show fund
Mutual fund companies can use flexible CRM systems to wholesalers exactly how much they’re spending on each
flag accounts that do not have shareholder information broker-dealer, and how much each one is bringing in.
agreements in place, referencing this flag in decisions Sophisticated CRM systems will allow fund companies
about whether to process omnibus trades from particular to analyze this information at multiple levels, rolling it
intermediaries. They can also put in place a detailed up to the firm level or drilling down to assess individual
milestone-based action plan for engaging the intermediary branches and specific brokers. This gives fund company
in a shareholder information agreement, ensuring the executives exactly the kind of information they need to
process is quickly and effectively carried out. A copy analyze trends, top sources of profitability, and the effec-
of the agreement can then be housed within the CRM tiveness of different sales and marketing expenditures, as
system for easy reference and retrieval in response to well as to forecast sales pipelines and growth.
SEC inquiries.
Furthermore, fund companies for the first time have the
Another important role CRM systems can play in comply- transparency and information they need to gain insight
ing with Rule 22c-2 is as information aggregators. As firms into their end investors. Even if all they have is a taxpayer
move to put multiple point-systems in place for different identification number and trade activity records, they have
aspects of their business and disparate compliance initia- a new wealth of data to mine to learn more about how,
tives, information can become fragmented and siloed, when, and in what quantifies different investors are choos-
with users needing to reference multiple systems to get a ing to buy and sell their funds.
clear picture of any given issue or relationship. As natural
Pivotal CRM | Executive Brief 3