Financial Regulatory Forum

Volcker could lead to boom in compliance hiring, says recruiter

By Emmanuel Olaoye, Compliance Complete

WASHINGTON/NEW YORK, Jan. 6 (Thomson Reuters Accelus) - The adoption of the Volcker rule by five U.S. regulatory agencies last week means that thousands of lawyers and compliance professionals will be working overtime to understand how to comply with the rule while keeping within the spirit of the law.

The Volcker rule, part of the 2010 Dodd-Frank Act, aims to stop banks from betting on their own capital or making investments in hedge funds and private equity funds. To comply, banks must report certain trading metrics that prove that they are involved in market making or hedging, and not making proprietary bets.  (more…)

U.S. Treasury cautions Bitcoin businesses on compliance duties, advocate cites ‘chilling effect’

By Brett Wolf, Compliance Complete

NEW YORK, Jan.6 (Thomson Reuters Accelus)  - The U.S. Treasury Department’s anti-money laundering unit has mailed roughly a dozen letters to businesses linked to the digital currency Bitcoin warning they may be money transmitters and be required to comply with federal law and regulation, a Treasury spokesman told Compliance Complete.

These letters, sent in recent weeks by Treasury’s Financial Crimes Enforcement Network (FinCEN), are a form of “industry outreach” aimed at making Bitcoin businesses aware of their potential anti-money laundering compliance obligations, FinCEN spokesman Steve Hudak said.  (more…)

FDIC adds more flesh to “single point of entry” resolution plans, but questions remain

By Henry Engler, Compliance Complete

NEW YORK, Dec. 18 (Thomson Reuters Accelus) – The Federal Deposit Insurance Corporation, under mounting pressure from the industry for greater clarity, announced on Tuesday additional details on its “Single Point of Entry” resolution plans for failed banks.
The basic concept is to close the holding company of a failed firm, and transfer its healthy subsidiaries into a new bridge institution that could be managed while the resolution of the defunct company proceeds. Shareholders would be wiped out under the plan, while unsecured creditors could seek equity claims as a means to recapitalize the new institution. Should the subsidiaries require liquidity to operate, they would borrow from the bridge, which in turn may borrow from an “orderly liquidation fund” funded by the U.S. Treasury. (more…)

U.S. Volcker Rule places major new demands on compliance

By Nick Paraskeva, for Compliance Complete

NEW YORK, Dec. 17 (Thomson Reuters Accelus) – The Volcker Rule final version adopted on Tuesday by U.S. regulators imposes significant compliance demands on banks, with stricter prohibitions on proprietary trading than the initial proposal two years ago, narrower exemptions for market making and hedging and a requirement that chief executives are now required to annually certify to regulators that such a compliance plan is in place.
“As a foundation, the final Volcker Rule requires banking entities to have a robust compliance program, including defined limits on market making, underwriting and hedging activities as well as continuous monitoring and management of such activities. It also requires reporting to regulators on specific metrics and trading details,” U.S. Commodity Futures Trading Commission Chairman Gary Gensler said as the rule was adopted. (more…)

Groups urge Congress to let SEC charge fees for adviser exams

By Emmanuel Olaoye, Compliance Complete

WASHINGTON, Dec. 13 (Thomson Reuters Accelus) - A coalition of groups representing investment advisers and state regulators has asked Congress to support a bill that would let the U.S. Securities and Exchange Commission to charge investment advisers an annual “user fee” for its exams.

In a letter sent to Congress last week, the coalition said the user fees collected by the SEC would fund the agency’s examinations of registered investment advisers.  (more…)

Federal Reserve issues technical fix to market-risk capital rule to conform with Basel III

By Bora Yagiz, Compliance Complete

NEW YORK, Dec. 12 (Thomson Reuters Accelus) - The Federal Reserve Board issued a final rule that makes technical changes to the Board’s market-risk capital rule to align it with the Basel III revised capital framework adopted by the Board earlier this year. (more…)

Regulators’ emphasis on resolution plans, “too-big-to-fail,” may be misplaced

By Bora Yagiz, Compliance Complete

NEW YORK, Dec. 5 (Thomson Reuters Accelus) – Focusing on too-big-to-fail policies and hard-to-implement resolution plans may lead regulators to miss the next big financial failure, which could come in the areas of shadow banking and short-term financing, industry experts said.
This was the main message given by a panel of experts at a conference organized by the Clearing House, a banking association and payments company on Thursday.  (more…)

Largest U.S. banks see themselves in “regulatory spiral” with no clear end

By Henry Engler, Compliance Complete

NEW YORK, Dec. 4 (Thomson Reuters Accelus) – Although five years have passed since the height of the financial crisis, top lawyers at some of the largest U.S. banks see themselves pitted in an escalating, and at times adversarial, battle with regulators, the end of which remains unknown.

At a conference sponsored by the Clearing House on Friday, senior legal representatives from JPMorgan and Bank of America painted a picture of unprecedented enforcement actions and fines across a wide range of issues, adding that the zeal of recent actions could potentially disrupt the supervisory and cooperative relationship that has long existed between banks and regulators. (more…)

SEC aims to loosen rules on foreign broker-dealers in U.S., official says

By Nick Paraskeva, for Compliance Complete

NEW YORK, Nov. 26 (Thomson Reuters Accelus) - U.S. securities regulators are looking to loosen rules for foreign-broker dealers acting in the U.S. on a cross-border basis. The change would come in the wake of new policy being adopted to implement derivatives cross-border rules under Dodd-Frank. The reform was outlined by John Ramsay, Acting Director, Division of Trading and Markets of the Securities and Exchange Commission (SEC).

Rulemaking priorities at the SEC division include the Volcker rule on proprietary trading, derivatives and a proposal for firms and exchanges to test major systems. New data sources and analytics will impact new rules on equity market structure and infrastructure improvements, Ramsay said on Tuesday at the Securities Industry and Financial Market Authority’s (SIFMA) Legal and Compliance Society. (more…)

The future of the U.S. resolution regime: toward “a tale of two models”?

By Bora Yagiz, Compliance Complete

NEW YORK, Nov. 25 (Thomson Reuters Accelus) - The U.S. Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) may be far from putting the final touches on titles I and II of the Dodd-Frank Act — the preparation of resolution plans within the framework of enhanced prudential standards, and the authority of FDIC to become the receiver of a failed non-bank financial or holding company and unwind it respectively. But comments by regulators and a conference in Washington last month held by the Federal Reserve Board and Federal Reserve Bank of Richmond on the topic reveal that some consensus is emerging on the structure and implementation of the resolution regime as well as its future course. (more…)

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