Insights
On April 24, 2025, the Board of Governors of the Federal Reserve Board (“FRB”) withdrew its previously issued supervisory guidance for banks related to certain crypto-asset activities. This development marks the latest in a series of coordinated regulatory shifts by federal banking agencies toward a more innovation-supportive framework for digital asset activities, building on the recent action of the Office of the Comptroller of the Currency (“OCC”) in Interpretive Letter 1183.
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On March 19, 2025, the staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (“Commission”) updated its Marketing Compliance Frequently Asked Questions (“March 2025 FAQs”) to provide no-action relief with respect to the presentation of extracted performance, as well as clarity on whether certain portfolio or investment characteristics constitute “performance” for purposes of Rule 206(4)-1 (the “Marketing Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”).
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On April 4, 2025, the Division of Corporation Finance (“Corp Fin”) of the Securities and Exchange Commission (the “SEC”) issued a statement (“Statement”) that the offer and sale of “Covered Stablecoins,” as defined by Corp Fin, does not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 (the “Securities Act”) or Section 3(a)(10) of the Securities Exchange Act of 1934 (the “Exchange Act”). Accordingly, Corp Fin stated that “persons involved in the process of ‘minting’ (or creating) and redeeming Covered Stablecoins do not need to register those transactions with the SEC under the Securities Act or fall within one of the Securities Act’s exemption from registration.”
In this article, authors Michael Friedman, Chapman's Israel practice head and practice leader for the firm's Special Situations and Restructuring Group, and associate Helena Honig, provide perspective on distressed investments in real estate in the United States and unique opportunities for investors willing to accept increased levels of risk to generate value and higher returns.
Chapman and Cutler LLP mourns the loss of retired partner, colleague, and friend, Craig Fishman.
Changes are coming for health care organizations that are borrowers with respect to municipal securities. New data standards required under the Financial Data Transparency Act of 2022 (FDTA) could take effect as early as 2027. In the March/April 2025 issue of AHLA’s Health Law Connections, Chapman partners Mary Kimura and Hillary Phelps provide a summary of the FDTA and the joint standards proposed in August 2024, including reactions from municipal securities industry participants and a look ahead at the next stages of the rulemaking process. They also explore potential impacts of the new data standards on health care organizations and systems.
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On March 7, 2025, the Office of the Comptroller of the Currency (“OCC”) issued Interpretive Letter 1183, which confirms that national banks may engage in certain crypto-assets activities and reverses the previous requirement that they first obtain a supervisory non-objection letter before engaging in such activities.
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As reported in our recent series of Client Alerts, the Corporate Transparency Act (“CTA”) and the U.S. Department of the Treasury’s (the “Treasury Department”) Financial Crimes Enforcement Network’s (“FinCEN”) related beneficial ownership information (“BOI”) reporting rules have been the subject of a multitude of lawsuits, injunctions and announcements.
Chapman welcomes Liz Boison to our Compliance, Regulatory and Payments Group. A former federal prosecutor and bank regulatory enforcement attorney, Liz leverages her financial regulatory counseling and litigation experience to help clients prevent and resolve criminal and civil anti-money laundering (AML), sanctions, and consumer protection matters.
The Digital Chamber released a new report: "Beyond Merit: How the SEC's Division of Investment Management Blocked Permissible Investments in Digital Assets." The report seeks to provide a workable framework to turn historical Division of Investment Management actions regarding digital assets into a path forward for the increased availability of digital assets in investment company products. Chapman's Rick Coyle and Morrison Warren assisted in the preparation.
- Topic: Derivatives
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The US derivatives markets are renowned for their depth and innovation, drawing participants from across the globe. These markets have a long‑established history of trading futures contracts on US Treasury securities, US and non‑US stock indexes, and physical commodities, as well as listed options on these instruments. In recent years, new types of contracts based on novel asset classes and indices have emerged. Examples of these new asset classes include cryptocurrencies, volatility, environmental attributes, and macroeconomic indicators. In addition to listed contracts, over‑the‑counter (OTC) derivatives may be executed bilaterally and either submitted for clearing or maintained as bilateral transactions if they are not subject to mandatory clearing requirements.
A well-trodden path for banks to achieve regulatory capital reductions by mitigating credit risk is through a synthetic securitization, either by issuing credit-linked notes (CLNs) or engaging in bespoke bilateral credit derivative transactions. These transactions—while complex to execute—offer the significant advantage of transferring risk on a large, diversified portfolio of obligors, allowing investors to evaluate credit risk on a statistical basis. This lessens the need for investor diligence at the level of individual obligations, which facilitates risk transfer on obligors for whom information might be limited or costly to digest.
At a time when the digital asset market is badly in need of good news, the International Swaps and Derivatives Association (ISDA) has delivered the long-awaited ISDA Digital Asset Derivatives Definitions (the “Definitions”).
