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.
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- September 16-27, 2025
Chapman is proud to sponsor the 2025 Private Placements Industry Forum Europe, where partner Vince Pelleriti is serving as conference co-chair.
- May 29-30, 2025
Chapman is a proud sponsor of the 2025 Spring Consumer Financial Services Conference, where attorneys Judy Chen and Tobias Moon are speaking.
- May 15-16, 2025
Chapman attorneys Gerardo Alvarez, Sarah Breitmeyer, Lizzy Forzley, Natalia Plichta, and Genni Zimmer will be attending this year’s NABL Essentials conference. Chapman is a proud sponsor of the National Association of Bond Lawyers (NABL).
Chapman is proud to sponsor The Municipal Forum of New York’s 2025 Annual Awards and ULF Fundraising Dinner, where partner Latrice Baptiste serves on the Board of Governors and the Dinner Committee.
- May 14-17, 2025
Chapman's Tobias Moon is speaking at the Mortgage Bankers Association's Legal Issues and Regulatory Compliance Conference.
- May 14 - 16, 2025
Chapman is a proud sponsor of the Association for Government Leasing & Finance (AGLF) 45th Annual Conference. Chapman partner and AGLF President Juliet Huang is attending.
- May 12 - 14, 2025
Chapman is proud to sponsor the National Association of Local Housing Finance Agencies (NALHFA) 2025 Annual Conference. Chapman associate Rachael Jensen is speaking on a panel and attorneys Ryan Bowen and Luke Ervin are attending.
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.
- May 7 - 9, 2025
Chapman attorney Ryan Bjerke is attending and Chapman is sponsoring the Utah Municipal Attorney’s Association (UMAA) 2025 Annual Conference.
- May 7 - 8, 2025
Chapman associate Helena Honig and Yuliya Zahoroda are attending the 2025 TMA Network of Women (NOW) Summit.
- April 30 - May 2, 2025
Chapman is exhibiting and several attorneys will be attending and speaking at the 2025 Illinois ASBO Annual Conference.
- April 30 - May 2, 2025
Chapman is a proud sponsor of the 2025 Utah Association of Counties (UAC) Management Conference. Chapman partner Ryan Bjerke will be attending the conference.
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”).
- April 16-18, 2025
Chapman is a proud sponsor of the Utah League of Cities and Towns (ULCT) 2025 Midyear Conference. Chapman partner Ryan Bjerke will be attending the conference.
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.”
- US-Israel Legal Review 2024/25
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.
- April 14-15, 2025
Chapman is a proud sponsor of the Utah Association of School Business Officials Spring Conference. Chapman partner Ryan Bjerke will be attending the conference.
Chapman and Cutler LLP mourns the loss of retired partner, colleague, and friend, Craig Fishman.
- April 6 - 9, 2025
Chapman is a proud sponsor of the NAHEFFA Spring 2025 Conference, where partner Nancy Burke will be in attendance.
Chapman Partner Morrison Warren is speaking at the DC Blockchain Summit 2025.
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.
- March 20 - 21, 2025
Chapman is a proud sponsor of the National Association of Bond Lawyers (NABL). Partners Sarah Breitmeyer, Brent Feller, Juliet Huang, Nora O'Brien, and Hillary Phelps are attending this year’s NABL The Institute.
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.
Ashrakat Hassan, a 2L at Washington University School of Law, is the recipient of the seventh annual Chapman and Cutler LLP Maynard H. Jackson Jr. Scholarship.
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.
- February 24-27, 2025
Chapman is a proud sponsor of the Fund Finance Association (FFA) 14th Annual Global Fund Finance Symposium.
- February 23-26, 2025
Chapman is a proud sponsor of SFVegas 2025, where Chapman partners Anna Anderson and Tobias Moon are participating on panels.
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.
The National Credit Union Administration (NCUA) has released its 2025 Annual Performance Plan, outlining its strategic priorities, resource allocations, and regulatory focus for the fiscal year. This plan is built around three primary goals: ensuring a safe, sound, and resilient system of cooperative credit that safeguards consumers; enhancing financial well-being through access to equitable and affordable financial products and services; and optimizing organizational performance to effectively fulfill the NCUA’s mission. While the NCUA will remain centered on these primary goals, the shifts in federal administration in Washington, in particular among financial regulatory agencies, may signal potential changes to the NCUA priorities and this Plan.
On February 17, 2025, in light of the Supreme Court’s grant of a stay in the Texas Top Cop Shop case, the District Court stayed the nationwide preliminary injunction of the CTA issued in Smith v. U.S. Department of Treasury. As a result, the BOI reporting rules are now once again enforceable and in effect.
- February 10 - 13, 2025
Chapman is a proud sponsor of the 2025 Private Placements Industry Forum (PPIF) where partner Nicole Windsor is serving as the conference chair.
Chapman's quarterly Regulatory Update contains an overview of the latest regulatory actions, market happenings, and litigation and enforcement activity in the investment management space.
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.
On January 23, 2025, the Supreme Court granted a stay of the District Court’s nationwide injunction pending any further appeals. However, a different judge in the same District Court recently issued an order in a separate case (Smith v. U.S. Department of Treasury) which enjoined FinCEN from enforcing the CTA against the plaintiffs in the case and, notably, stayed the effective date of the BOI reporting rules.
- January 23 - 25, 2025
Chapman attorneys Kent Floros, Kyle Harding, and Anjali Vij are speaking at the 2025 Illinois Association of Park Districts / Illinois Park and Recreation Association Soaring to New Heights Conference.
- January 20-21, 2025
Chapman is a proud sponsor of the 14th Annual London Finance and Capital Markets Conference where partner Paul Carman is speaking on a panel and Heath Martin is attending.
On December 31, 2024, the U.S. Court of Appeals for the Fifth Circuit ruled that mattress company Serta Simmons Bedding, LLC (“Serta”) violated the “sacred right” of its lenders to ratable repayment by placing more than $1 billion of new super-priority debt that would have priority over its existing loans and offering to “purchase” or “exchange” only a portion of its existing indebtedness for such new indebtedness, The Fifth Circuit held that such an exchange was not a permitted “open market purchase” under the terms of the existing indebtedness. While still significant, this ruling underscores the importance of the language in existing and future debt instruments which could either facilitate or inhibit similar transactions involving “liability management” or “lender-on-lender violence”.
As reported in our recent series of Client Alerts, on December 3, 2024, the U.S. District Court for the Eastern District of Texas (the “District Court”) issued a nationwide preliminary injunction that temporarily blocked enforcement of the Corporate Transparency Act (“CTA”) and the U.S. Department of the Treasury's Financial Crimes Enforcement Network’s (“FinCEN”) related beneficial ownership information (“BOI”) reporting rules. On December 23, 2024, the Fifth Circuit Court of Appeals (the “Court of Appeals”) granted the government’s motion to stay the District Court’s preliminary injunction pending its appeal of that injunction order. As a result of the Court of Appeal’s ruling, FinCEN extended the reporting deadline to January 13, 2025.
As previously noted in our Client Alert, on December 3, 2024, the U.S. District Court for the Eastern District of Texas (the “District Court”) issued a nationwide preliminary injunction that temporarily blocked enforcement of the Corporate Transparency Act (“CTA”) and the U.S. Department of the Treasury's Financial Crimes Enforcement Network (“FinCEN”) related beneficial ownership information (“BOI”) reporting rules, and as noted in our most recent Client Alert, the government filed an emergency motion with the Fifth Circuit Court of Appeals (the “Court of Appeals”) to stay the District Court’s preliminary injunction pending its appeal of that injunction order.
As discussed in our previous Client Alerts on December 9 and December 13, on December 3, 2024, the U.S. District Court for the Eastern District of Texas (the “District Court”) issued a nationwide preliminary injunction that temporarily blocks enforcement of the Corporate Transparency Act (“CTA”) and the U.S. Department of the Treasury's Financial Crimes Enforcement Network (“FinCEN”) related beneficial ownership information (“BOI”) reporting rules.
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction that temporarily blocks enforcement of the Corporate Transparency Act (“CTA”) and the U.S. Department of the Treasury's Financial Crimes Enforcement Network (“FinCEN”) related beneficial ownership information (“BOI”) reporting rules. On December 12, 2024, the government filed a motion to stay the preliminary injunction pending its appeal.
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction that temporarily blocks enforcement of the Corporate Transparency Act (“CTA”) and the U.S. Department of the Treasury's Financial Crimes Enforcement Network (“FinCEN”) related beneficial ownership information (“BOI”) reporting rules.
Chapman partner Marc Franson is presenting at the 2024 Illinois Bankers Association (IBA) Bank Counsel Conference. Attorneys Kathryn Puls and Stacey Kim are attending.
- December 4-6, 2024
Chapman is a proud sponsor of Opal Group's CLO Summit 2024. Chapman partner Pat Quill is speaking on a panel and a group of attorneys are attending.
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.
Chapman is a proud sponsor of the American Fintech Council Policy Summit 2024. Chapman's Marc Franson, Tobias Moon, Kathryn Puls, and Matt Stone are attending the conference.
- November 14 - 15, 2024
Chapman is a proud sponsor of the 2024 Fall Conference on Consumer Finance Law, where Chapman attorneys Tobias Moon and Judy Chen are speaking.
- November 13-15, 2024
Chapman is a proud sponsor of SFNet's 80th Annual Convention, where Chapman partners Dan Baker, Nicole Krol, and Marilynn Tham are attending.
Chapman is a proud sponsor of the Fall 2024 ETP Forum where Chapman partner Morrison Warren is speaking on a panel.
Chapman wrote the book on the marketplace lending regulatory landscape that the entire industry has come to rely upon. First published in 2013, the 2024 update covers a vast array of topics affecting the marketplace lending industry.
- November 8-9, 2024
Chapman partner Marc Franson is speaking at the 47th Annual Attorneys' Conference & Compliance Symposium.
Chapman partner Kelly Kost is speaking at the 2024 IAPD Legal Symposium.
The Division of Examinations of the Securities and Exchange Commission published its examination priorities for fiscal year 2025. The 2025 Exam Priorities reflect practices, products, and services the Division believes present heightened risks to investors and the U.S. capital markets.
Chapman partner Morrison Warren is speaking at the 2024 NYSE ETF Industry Summit.
Chapman is a proud sponsor of the 5th Annual ETFGI Global ETFs Insights Summit. Chapman partners Barry Pershkow and Morrison Warren are participating in panel discussions at the conference.
- October 27-30, 2024
Chapman is a proud sponsor of Money 20/20.
- Of Counsel
- October 23-25, 2024
Chapman is a proud sponsor of The Bond Buyer’s California Public Finance Conference. Chapman partners Mary Kimura and Nora O’Brien and senior counsel Michele Dulik are attending.
- October 21-24, 2024
Chapman is a proud sponsor of the 2024 TALHFA Annual Conference, where a group of Chapman attorneys are attending and speaking at the conference.
- October 21-23, 2024
As a go-to firm for asset securitization and structured finance, Chapman is a proud sponsor of the 30th Annual ABS East Conference hosted by Invisso.
- October 21-23, 2024
Chapman is a proud sponsor of AFSA's 2024 Annual Meeting! Chapman partners Tobias Moon, Kathryn Puls, and Matt Stone are attending.
There have been several recent notable enforcement actions, including continued enforcement by the SEC and CFTC against off-channel communications, as well as an SEC fraud settlement with Macquarie Investment Management Business Trust.
- October 8-9, 2024
Chapman is a proud sponsor of the Jefferies 2024 Not-For-Profit Healthcare Strategic Capital Investor Conference. Chapman's David Kates and Mary Kimura will be attending the conference.
- October 6-9, 2024
Chapman is a proud sponsor of the 2024 NAHEFFA Fall Conference and partner Nancy Burke is attending.
- October 6-8, 2024
Chapman is a proud sponsor of the STEP Canada-USA Cross-Border Conference 2024. Chapman partner Rebecca Wallenfelsz is attending.
Chapman's Marc Franson is speaking at the Chicagoland Compliance Association's 2024 Annual Conference.
Chapman's quarterly Regulatory Update contains an overview of the latest regulatory actions, market happenings, and litigation and enforcement activity in the investment management space.
- October 2-4, 2024
Chapman is a proud sponsor of the Illinois Community College Chief Financial Officers (ICCCFO) Fall 2024 Conference. Chapman partner Erin Bartholomy is presenting at the conference.
- October 1-2, 2024
Chapman is a proud sponsor of the 2024 Institutional Limited Partners Association's Private Equity Legal Conference.
- October 1-2, 2024
Chapman is a proud sponsor of the Private Placements Global Forum: Europe 2024, where partner Vince Pelleriti will be serving as the conference co-chair. Also attending are Chapman partners Michael Harrison, Amy Olshansky, and Tony Yager.
- October 1-2, 2024
Chapman is a proud sponsor of the Toll P3 Conference 2024. Chapman partner Rick Cosgrove is speaking at the conference.
On September 12, 2024, the Commodity Futures Trading Commission (CFTC) adopted amendments to CFTC Regulation 4.7 (Reg. 4.7), a rule that provides exemptions from the broader compliance requirements under Part 4 of the CFTC regulations (Part 4) for registered commodity pool operators (CPOs) with respect to pools (4.7 pools) offered solely to “Qualified Eligible Persons” (QEPs) and registered commodity trading advisors (CTAs) that advise or manage commodity trading accounts of QEPs. The amendments (i) increase the financial thresholds in the “Portfolio Requirement” of the QEP definition and (ii) permit CPOs of fund of fund pools offered solely to QEPs to provide monthly account statements within 45 days of the month-end, rather than providing quarterly account statements within 30 days of the quarter-end. The CFTC chose not to adopt, at this time, the proposed minimum QEP disclosures.
- September 19-21, 2024
Chapman partner David Sykes is speaking at the 50th Anniversary of the ACMA 2024 Annual Conference.
Chapman welcomes Peter Hong to our Corporate and Securities Department and Investment Management Group. A recognized securities and commodities regulatory authority, Peter’s practice focuses on the registration and regulation of investment advisers, broker-dealers, commodity trading advisors, commodity pool operators, and introducing brokers, as well as the formation and ongoing compliance obligations of registered and private investment companies.
- September 18-20, 2024
Chapman is a proud sponsor of the National Association of Bond Lawyers (NABL) The Workshop 2024, where Chapman attorneys will be speaking and attending.
- September 9-11, 2024
Chapman partner Kent Floros is speaking on a panel at the 2024 Illinois GOFA Annual Conference.
On August 22, 2024, a proposed rule (the “Proposed Joint Rule”) mandated by the Financial Data Transparency Act of 2022 (the “FDTA”) and adopted by nine federal financial regulators, including the U.S. Securities and Exchange Commission (the “SEC” and, together with the other eight regulators, the “Covered Agencies”), was published in the Federal Register.
Chapman's white paper provides a summary of the interval fund and tender offer fund structures, including their basic legal framework, their investment restrictions, how they are distributed and how they facilitate redemptions. It also provides a comparison of interval funds and tender offer funds, both to each other and to other types of investment companies.
The Investment Advisers Act of 1940 (the “Advisers Act”), rules adopted by the U.S. Securities and Exchange Commission (the “SEC”) pursuant thereto, and state laws governing the activities of investment advisers determine when persons engaged in the business of providing investment advice must or may register as an investment adviser with either the SEC or the relevant state authorities.
Chapman acted as counsel on the registration and listing of two of the first eight spot Ethereum (ether) exchange-traded funds (ETFs) to begin trading in the United States, following the U.S. Securities and Exchange Commission (SEC) declaring the registration statements for the ether ETFs effective on July 22, 2024.
Chapman welcomes Curtis Doty to our Corporate and Securities and Banking and Financial Services Departments. A recognized authority in the commercial law, regulatory, and insolvency aspects of derivatives, Curtis Doty further expands the firm's capacity to advise on complex derivatives issues and transactions across multiple sectors of finance.
On June 27, 2024, the United States Supreme Court ruled in favor of the United States Trustee, who had objected to Purdue’s plan of reorganization that granted releases of third party claims to members of the Sackler family in exchange for their contribution of up to $6 billion to the Purdue bankruptcy estate. Justice Neil Gorsuch, writing for the majority, found that the type of relief being granted to the Sacklers (i.e., a blanket shield from all existing or potential liability relating to the opioid crisis) represented the kind of “discharge” only available to debtors who have “placed all their assets on the table.”
- June 24-27, 2024
Chapman is a proud sponsor of the 2024 HFMA Annual Conference. Chapman partner Joe Saverino is speaking at the conference.
In a decision that should help restore investors’ faith in the protections afforded municipal bondholders under the United States Bankruptcy Code (the “Bankruptcy Code”), on June 12, 2024, the United States Court of Appeals for the First Circuit (the “First Circuit” or the “Court”) held that the bondholders (the “Bondholders”) of certain Puerto Rico Electric Power Authority (“PREPA”) electric revenue bonds (the “Bonds”) have a non-recourse claim against PREPA’s estate in PREPA’s reorganization proceedings under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act, 48 U.S.C. §§ 2161-78 (“PROMESA”), for the full principal amount of their outstanding Bonds, plus matured interest, of approximately $8.5 billion, and that the Bonds are secured by PREPA’s current and future Net Revenues.
Despite recent regulatory efforts from FINRA and the SEC, industry participants continue to have no clear understanding of what qualifies a product as either “complex” or “risky.” In this article, Chapman attorneys provide insight and context for a path forward for definitive guidance regarding complex products, but also for a more rational regulatory scheme that considers a wide variety of factors. This article proposes an objective framework for broker-dealers and investment advisers to consider Defined Outcome ETFs, regardless of whether they are deemed complex under the current regulatory environment, by utilizing a well-established measure of risk to assess whether an investment in those vehicles is in a client’s best interest.
- June 12-13, 2024
Chapman is a proud sponsor of PACENation Summit 2024. Chapman's Seema Ganatra Patel, David Sykes and Larry White are attending.
On June 7, Governor Pritzker signed into law House Bill 4582, Public Act 103-0591 (the “Act”). Among other items, the Act amends the School Code, the Local Government Debt Reform Act (Debt Reform Act), and the Property Tax Extension Limitation Law (PTELL).
- June 10-12, 2024
Chapman's James Cantrell is attending the CRE Financial Counsel's 2024 Annual Conference.
On June 5, 2024, the United States Court of Appeals for the Fifth Circuit (the “Court”) determined to vacate rules recently adopted by the Securities and Exchange Commission (the “Commission”) regulating the conduct of investment advisers to private investment funds (the “Private Fund Advisers Rule”).
- June 4-6, 2024
Chapman partner Marc Franson is speaking at the 2024 U.S. Fintech Symposium and partner Matt Stone is attending.
- May 30-31, 2024
Chapman is a proud sponsor of The Conference on Consumer Finance Law's Spring Consumer Financial Services Conference. Chapman's Amanda Delaney and Tobias Moon are speaking at the conference.
On May 16, 2024, the IRS released Notice 2024-41 (the “Notice”), which provides updated guidance on the domestic content bonus energy credit available for qualifying energy projects under the Inflation Reduction Act of 2022 (the "IRA"). The Notice modifies existing guidance on the domestic content bonus under Notice 2023-38 (“Notice 2023-38”) and establishes a new elective safe harbor (the “New Elective Safe Harbor”) that allows project owners to determine certain projects’ eligibility for the domestic content bonus using predetermined cost percentages provided by the IRS.
Chapman is a proud sponsor of the Spring 2024 ETP Forum. Chapman partner Morrison Warren is speaking at the conference.
On April 23, 2024, the Department of Labor (“DOL”) released its final investment advice fiduciary rule, titled the Retirement Security Rule (the “Final Rule”), which re-defines who is a fiduciary on account of providing investment advice to workplace retirement plans and individual retirement accounts (“IRAs”). In addition, the DOL released several amended DOL prohibited transaction exemptions that, together with the Final Rule, are “intended to protect the interests of retirement investors by requiring persons who are defined in the Final Rule as investment advice fiduciaries to adhere to stringent conduct standards and mitigate their conflicts of interest.” The Final Rule and the amended exemptions finalize the proposed investment advice fiduciary rule and proposed amendments to the prohibited transaction exemptions, which the DOL issued on October 31, 2023. The Final Rule narrows certain provisions in the proposed rule that some commentators and industry groups argued were overly broad. The Final Rule and the amended prohibited transaction exemptions will become effective on September 23, 2024, except that certain provisions in the amended exemptions will not be phased in until one year after such effective date.
- June 4-5, 2024
Chapman partner Amy Cobb Curran is attending Social Innovation Summit 2024.
- May 9-10, 2024
Chapman is a proud sponsor of the DealCatalyst and LSTA's 3rd Annual Middle Market Finance & Direct Lending Conference. Connect with our attorneys Cari Grieb, Michelle Kesner, Sarah Kessler, Kristi Osentoski, Ryan Tooley, Justin Greatorex, and Will Carpenter at the conference!
- May 5-8, 2024
Chapman's Tobias Moon is speaking at the Mortgage Bankers Association's Legal Issues and Regulatory Compliance Conference.
- May 1-4, 2024
Chapman is a proud sponsor of the National Association of Local Housing Finance Agencies (NALHFA) 2024 Annual Conference where attorneys Ryan Bowen, Nora O'Brien, Rachael Jensen, and Luke Ervin are attending.
- May 1-3, 2024
Chapman partners Bill Gray and Juliet Huang are speaking at the 2024 Association for Governmental Leasing & Finance (AGLF) Annual Conference. Juliet Huang also serves as the President of AGLF.
- April 30 - May 1, 2024
Chapman is a proud sponsor of the Utah Association of Counties (UAC) Legislative Management Conference. Chapman partner Ryan Bjerke will be attending the conference.
- April 29-30, 2024
Chapman's Cary Nadelman, Patrick Quill, and Samuel Yoo are attending the The Annual CLO Industry Conference.
- April 24-26, 2024
Chapman is exhibiting at the 2024 Illinois ASBO Annual Conference.
- April 22-23, 2024
Chapman is a proud sponsor of the Utah Association of School Business Officials Spring Conference. Chapman partner Ryan Bjerke will be attending the conference.
- US-Israel Legal Review 2023
Amidst an ever-changing US regulatory landscape, Israeli fintechs need to carefully consider their licensing obligations when offering their products to US consumers. Chapman partner Tobias Moon provides perspective on regulatory considerations associated with the credit products Israeli fintech companies are offering to US-based consumers in the US-Israel Legal Review, published by Israel Desks.
- April 17-19, 2024
Chapman is a proud sponsor of the Illinois Community College Chief Financial Officers (ICCCFO) Spring Conference.
- April 17-19, 2024
Chapman is a proud sponsor of the Utah League of Cities and Towns (ULCT) 2024 Midyear Conference. Chapman partner Ryan Bjerke will be attending the conference.
The 2024 Legally Israel 100, published by Israel Desks, has for the third consecutive year ranked Chapman among the Top 10 Israel Practices in both Capital Markets and Real Estate.
- April 11-12, 2024
Chapman Partner Nicole Windsor is speaking at the 2024 ACIC Spring Investment Forum.
- April 10-12, 2024
Chapman is a proud sponsor of the National Association of Bond Lawyers. Chapman partner Juliet Huang is speaking and associate Zain Al-Khalil is attending this year's The Essentials conference.
- April 7-10, 2024
Chapman is a proud sponsor of the 2024 NAHEFFA Spring Conference. Chapman partner Nancy Burke is attending this year's conference.
- April 4-5, 2024
Chapman is a proud sponsor of the National Association of Bond Lawyers (NABL). Chapman's Sarah Breitmeyer and Hillary Phelps are speaking at this year's NABL The Institute. Chapman partners Brent Feller, Juliet Huang, Nora O'Brien, and Larry White are attending.
- April 4, 2024
Chapman is a proud sponsor of the 2024 Invisso (formerly IMN) and Equipment Leasing and Finance Association (ELFA) Investors' Conference on Equipment Finance.
In February 2023, Perpetual US Services, LLC filed an application for exemptive relief with the Securities and Exchange Commission (SEC) that, if granted, would allow a mutual fund to create and operate an ETF share class alongside its mutual fund share classes. In the February 2024 issue of The Investment Lawyer, Chapman partners Rick Coyle, Barry Pershkow and Morrison Warren break down the history of the sought-after relief, the potential advantages to such a structure for mutual fund sponsors and shareholders, and share their insights into the SEC’s reluctance to grant such relief, while ultimately arguing that the approval of these applications is the proper step for the SEC to take.
Earlier this month, the United States Securities and Exchange Commission (“SEC”) finalized a long-awaited rule that mandates climate-related disclosures by public companies and in public offerings. See here. The rule does not apply to public asset-backed securities (“ABS”) issuers and the SEC has stated that it will continue to review climate disclosures related to these issuers.
Earlier this month, the United States Securities and Exchange Commission (“SEC”) finalized a long-awaited rule that mandates climate-related disclosures by public companies and in public offerings. See here. The SEC’s rule is already facing legal challenges, including a recent ruling that temporarily blocks the rule from taking effect.
In its 2024 Supervisory Priorities, the NCUA set out examination priorities based on activities that pose the highest risk to federally insured credit union members (referred to as “credit unions”) and that are responsive to the continuous stream of challenges facing credit unions in this current market. It should come as no surprise to anyone that liquidity risk is once again an examination priority for 2024, as the economic environment continues to be uncertain. This all follows on the heels of the Addendum to the Interagency Policy Statement on Funding and Liquidity Risk Management: Importance of Contingency Funding Plans issued in July 2023 (the “Addendum”), highlighting the importance of contingency funding plans as a crucial component of managing funding and liquidity risk.
Oluwatosin “Tosin” Agunloye, a 3L at Washington University School of Law, is the recipient of the sixth annual Chapman and Cutler LLP Maynard H. Jackson Jr. Scholarship.
- March 10-13, 2024
Chapman partners Heath Martin and David Sykes are attending Infocast’s Solar + Wind Finance & Investment Summit 2024.
- March 3-6, 2024
Chapman is a proud sponsor of Fintech Meetup 2024. Chapman's Tobias Moon, Matt Stone, and Stacey Kim will be attending the conference.
- February 26-29, 2024
Chapman is a proud sponsor of the Fund Finance Association (FFA) 13th Annual Global Fund Finance Symposium
- February 25-28, 2024
Chapman is a proud sponsor of SFVegas 2024, hosted by the Structured Finance Association, bringing together capital markets participants from around the world.
- February 6-9, 2024
Chapman is a proud sponsor of the 2024 Turnaround Management Association (TMA) Distressed Investing Conference.
- February 4-7, 2024
Chapman is a proud sponsor of the 2024 Private Placements Industry Forum (PPIF) where partner Tony Yager is serving as conference chair for the 11th consecutive year.
On November 27, 2023, the US Securities Exchange Commission (“SEC”) adopted final Securities Act Rule 192 (“Final Rule 192”) prohibiting certain conflicts of interest in securitization transactions. In general, Final Rule 192 prohibits a “securitization participant” with respect to an “asset-backed security” (“ABS”) from directly or indirectly engaging in any “conflicted transaction” during the applicable prohibition period.
- January 25-27, 2024
Chapman attorneys Kent Floros, Kyle Harding, and Anjali Vij are speaking at the 2024 Illinois Association of Park Districts / Illinois Park and Recreation Association Soaring to New Heights Conference.
The Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) recently issued a decision in In re Envision Healthcare holding that a debtor did not forfeit its rights (including voting and managerial rights) in a Delaware limited liability company (an “LLC”) by filing for bankruptcy, notwithstanding the fact that Delaware state law terminates a person’s membership interest in an LLC upon the member’s bankruptcy.
- January 15-16, 2024
Chapman is a proud sponsor of the 13th Annual London Finance and Capital Markets Conference. Chapman partner Paul Carman moderated a panel and partner Heath Martin attended the conference.
Chapman acted as counsel on the registration and listing of three of the first spot bitcoin exchange-traded funds (ETFs) to launch in the United States, which received approval from the U.S. Securities and Exchange Commission (SEC) on January 10, 2024.
The Corporate Transparency Act (CTA) went into effect January 1, 2024. Under the CTA, all newly created entities are now required to file a report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of formation, unless an entity qualifies under one of 23 exemptions. That means, unless an exemption applies, any newly formed LLC, limited partnership, corporation, statutory trust, or other organization that is created by filing with a secretary of state has an additional federal filing requirement. All existing entities formed prior to January 1, 2024, that do not qualify for an exemption have until the end of 2024 to file a Report.
On December 22, 2023, the Internal Revenue Service unveiled its online pre-registration portal for elective pay (or “direct pay”) and transferability of tax credits under the Inflation Reduction Act (the “IRA”). Separately, on December 28, 2023, the IRS released Notice 2024-9, which provides relief for taxpayers facing a phaseout of elective pay tax credits related to a failure to meet certain domestic content requirements.
Our December 6, 2023 Client Alert described very generally important aspects of the “Basel III Endgame” NPR (NPR) that proposed replacing two “subparts” of the existing US Basel III rule. In that Alert, we indicated we would issue a separate Client Alert describing in more detail how the Standardized Approach “risk weights” in Section 32 and “credit conversion factors” (CCFs) in Section 33 of the US Basel III rule differ from the risk weights and CCFs proposed in the NPR (which would be contained in proposed Sections 111 and 112 of the US Basel III rule).
On July 27, 2023, the three federal banking agencies jointly issued a “notice of proposed rulemaking” captioned “Regulatory Capital Rule: Large Banking Organizations and Banking Organizations With Significant Trading Activity” (NPR) that is more commonly described as “the Basel III endgame.”
On November 17, 2023, the IRS released proposed regulations (the “Proposed Regulations”) that provide guidance relating to the investment tax credit (the “ITC”) under Section 48, which provides a tax credit for investment in certain types of green energy technology.
- December 3-5, 2023
As a go-to firm for US CLO transactions, Chapman is a proud sponsor of Opal Group's CLO Summit 2023. Chapman attorney Pat Quill is speaking on a panel and attorneys Aaron Efta, John Hitt, Bradley Vollkommer, Sam Yoo, James Cantrell, and Cary Nadelman are attending.
Chapman partner Marc Franson is presenting at the 2023 Illinois Bankers Association (IBA) Bank Counsel Conference.
- November 15-17, 2023
Chapman is a proud sponsor of SFNet's 79th Annual Convention.
Chapman is a proud sponsor the American Fintech Council Policy Summit 2023. Chapman's Marc Franson, Kathryn Puls, and Tobias Moon are speaking at the conference.
Chapman partner Hillary Phelps is speaking on Issuer Disclosure Matters at the November 2023 Debt Management Best Practice conference, hosted by Government Finance Officers Association (GFOA).
Chapman's Marc Franson is speaking at the 46th Annual Illinois Credit Union League Attorneys' Conference and Compliance Symposium.
- November 2-3, 2023
Chapman's Kathryn Puls and Tobias Moon are speaking at the 2023 Fall Consumer Financial Services Conference, hosted by the Conference on Consumer Finance Law (CCFL). Marc Franson is a member of CCLF.
Chapman receives Diversity & Flexibility Alliance Flex Impact Award honoring impactful and flexible workplace initiatives.
- October 23-25, 2023
As a go-to firm for asset securitization and structured finance, Chapman is a proud sponsor of the 29th Annual ABS East Conference hosted by Information Management Network (IMN).
Chapman's quarterly Regulatory Update contains an overview of the latest regulatory actions, market happenings, and litigation and enforcement activity in the investment management space.
- October 19-20, 2023
Chapman partner Philip Edison is speaking on a panel at the conference.
- October 18-20, 2023
Chapman is a proud sponsor of the 2023 TALHFA Annual Conference. A group of Chapman attorneys are attending and speaking at the conference.
- October 18-20, 2023
Chapman is a proud sponsor of the National Association of Bond Lawyers (NABL) The Workshop 2023, where partner partner Juliet Huang is serving as the Conference Chair.
Chapman is a proud sponsor of the Private Placements Global Forum Europe 2023, where partner Vince Pelleriti will be serving as the conference co-chair and speaking, and partners Charles C. Calloway, Jr., Michael Harrison, Amy Olshansky, and Tony Yager will be attending.
Chapman senior counsel, Caitlin Harrington, will be attending the Fund Finance Association US University 2.0.
- October 4-5, 2023
Chapman is a proud sponsor of the 4th Annual ETFGI Global ETFs Insights Summit. Chapman's Barry Pershkow and Morrison Warren will be participating in panel discussions at the conference.
- October 1-4, 2023
Chapman is a proud sponsor of the 2023 AFSA Annual Meeting.
- September 26-27, 2023
Chapman is a proud sponsor of the Institutional Limited Partners Association's Private Equity Legal Conference.
- September 22-23, 2023
Chapman is a proud sponsor of the 2023 26th Annual WPF Annual Conference. Chapman partners Latrice Baptiste, Katherine Gale, who also serves as the WPF Midwest Chapter Board member, Nora O'Brien, and Carol Thompson are attending the conference.
Chapman is a proud sponsor of DealCatalyst's SLF: US 2023. Chapman partner, Kellie Merkel, is moderating a panel.
The Second Circuit Court of Appeals recently issued an eagerly awaited decision in Kirschner v. JP Morgan Chase Bank, N.A., which reconfirmed the widely accepted view that loans are not securities under federal or state securities laws.
On August 23, 2023, the Securities and Exchange Commission (the “Commission”) voted 3 to 2 to adopt new and amended rules under the Investment Advisers Act of 1940 (the “Advisers Act”) requiring advisers to private funds to provide additional disclosures to investors in such funds, restrict certain types of preferential treatment to investors, and impose new requirements related to fund audits, books and records, and adviser-led secondary transactions.
On July 27, 2023, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued a joint Notice of Proposed Rulemaking (the “NPR”) proposing significant changes to the US bank capital regulations. The NPR proposes several changes to the regulations for determining required capital for bank securitization exposures and additional changes that will impact securitization exposure capital charges. While the proposed changes impact banks originating both traditional and synthetic securitization of their own assets, and securitization exposures in the form of derivatives, and provide a new method for determining the risk weights of exposures to Non-performing Loan (“NPL”) securitizations, this Client Alert focuses on the impact of the proposed rules on banks investing in securitization transactions (other than NPL securitizations), both by buying asset-backed securities with the intent to hold such securities and by providing financing of securitizations by making loans or entering into asset purchase facilities, either directly or through credit and liquidity facilities provided to asset-backed commercial paper (“ABCP”) conduits.
Chapman welcomes Peter Morreale to our Asset Securitization Department. Peter represents issuers, underwriters, servicers, and other entities in connection with asset finance transactions, bank loans, public and private agency and non‐agency MBS and ABS offerings, CLOs, CDOs, private equity transactions, structured finance transactions and purchases, sales and financings of various types of financial assets, and related servicing arrangements.
Law firms can enhance their commitment to pro bono work by finding small ways to increase participation throughout their workforce.
Chapman's quarterly Regulatory Update contains an overview of the latest regulatory actions, market happenings, and litigation and enforcement activity in the investment management space.
Chapman is a proud sponsor of the American India Foundation's (AIF) 2023 New York Gala. Chapman's New York office attorneys will be attending.
One of the most innovative features of the energy tax credit provisions of the Inflation Reduction Act (the “IRA”), which became law on August 16, 2022, is a pair of provisions that allow taxpayers to sell energy tax credits to a third party for cash (Section 6418) or to elect to receive a cash payment of the tax credit directly from the federal government (Section 6417).1 Since the IRA was enacted, taxpayers, tax-exempt organizations, governmental entities, and their advisors have been counting the days for the IRS to provide guidance on how to apply these monetization provisions, which are expected to be a game-changer in the U.S. market for investment into green energy technologies.
The IRS released a major package of temporary and proposed regulations on these provisions on June 14, 2023.
Chapman partners Michael Friedman and Eric Silvestri, and associate Helena Honig discuss a recent decision of the US Bankruptcy Court for the Southern District of New York in an article published in the June 2023 issue of Israel Desks Magazine.
Chapman partner Marc Franson will be speaking on a panel for the American Fintech Council (AFC) Webinar.
On June 5, 2023, the Governor of Colorado signed into law House Bill 23-1229 which contains a purported “opt out” of federal preemption made available to state chartered, FDIC insured institutions. It appears aimed at least in part to online lenders making loans to Colorado residents. Whether this action will trigger additional states to attempt a similar move or whether this legislation is even valid will likely end up in litigation, teeing up another potential battle on federal preemption vs. states rights and likely leaving Colorado borrowers in limbo for some time to come. Of note, this law does not become effective until July 1, 2024.
- June 6-7, 2023
Chapman is a proud sponsor of PACENation Summit 2023. Chapman attorneys Hillary Phelps, David Sykes, Larry White, and Seema Patel will be attending the summit.
The International Comparative Legal Guide - Securitisation 2023, now in its sixteenth edition, is a leading legal text spanning the global securitization market, providing insights into the US and EU CLO market, cross-border trade receivables, taxation, and other topical issues and jurisdictions. Chapman partners David Nirenberg and Steven Kopp, recognized authorities on the tax treatment of US securitization transactions, co-authored the chapter entitled, "U.S. Withholding on Asset-Backed and Structured Securities."
- May 23-24, 2023
Chapman is a proud sponsor Proximo Financing America's Infrastructure 2023 Conference. Chapman partner Joe Saverino is speaking on a panel at the conference.
- May 17-19, 2023
Chapman partner Doug Bird will be speaking on a panel at the CalCCA Annual Conference.
- May 16-17, 2023
Chapman's Patrick Quill, Bradley Vollkommer, Sam Yoo, and Cary Nadelman will be attending DealCatalyst and LSTA's Annual CLO Industry Conference.
Chapman attorneys Nicole Krol, Jennifer Tedjeske, and Caitlin Harrington will be attending the Women in Fund Finance US: Inaugural Chicago Panel and Networking Event.
- May 10-12, 2023
Chapman is a proud sponsor of the 2023 Annual AGLF Conference. Chapman partners Juliet Huang and Heath Martin will be speaking at the conference.
- May 10-11, 2023
Chapman is a proud sponsor of Fintech Nexus USA and we are excited to be back in the exhibit hall this year! Partner Marc Franson will be sharing his insights on a panel and Chapman attorneys Aaron Efta, Tobias Moon, Kathryn Puls, Judy Chen, Amanda Delaney, and Stacey Kim will be attending the conference.
Chapman's Hillary Phelps is speaking on a panel at the Municipal Securities Disclosure Conference, hosted by the SEC.
Legally Israel 100 ranks Chapman among the Top 10 Israel Practices in Capital Markets and Real Estate for Israeli financial institutions and investors in the US.
- May 7-10, 2023
Tobias Moon is speaking on the panel, "FinTech and Innovative Loan Products" on May 10 at the Mortgage Bankers Association Legal and Regulatory Compliance Conference 2023. Marc Franson and Tobias Moon are members of Mortgage Bankers Association.
- May 3-5, 2023
Chapman is a proud sponsor of The Gas Authority’s Annual Membership Meeting. Chapman partner Doug Bird is attending.
- May 1-4, 2023
Chapman is a proud sponsor of Broadband Communities Summit 2023. Chapman's Hillary Phelps, Larry White, and Seema Patel will be participating in panel discussions at the conference.
- May 3-6, 2023
Chapman is sponsoring and attorneys Ryan Bowen, Nora O'Brien, and Rachael Jensen are attending NALFHA's 2023 Annual Conference.
- April 27-28, 2023
Chapman Partners Amy Olshanksy and Michael Harrison are speaking on and Charles C. Calloway, Jr. is moderating a panel at the 2023 ACIC Spring Investment Forum.
- April 27-28, 2023
Chapman is a proud sponsor of the DealCatalyst and LSTA's 2nd Annual Middle Market Finance & Direct Lending Conference. Chapman attorneys Nate Odem, Greg Klamrzynski and Nick Whitney are attending.
- April 27-28, 2023
Chapman is a proud sponsor of the Utah Association of Counties (UAC) Legislative Management Conference. Chapman partner Ryan Bjerke will be attending the conference.
Chapman is a proud sponsor of The Acting Company's Reimagined Renaissance Gala.
- April 24-25, 2023
Chapman is a proud sponsor of the Utah Association of School Business Officials Annual Conference. Chapman partner Ryan Bjerke will be attending the conference.
- April 19-21, 2023
Chapman is a proud sponsor of the Utah League of Cities and Towns (ULCT) 2023 Midyear Conference. Chapman partner Ryan Bjerke will be attending the conference.
This Alert discusses the recent Delaware cases related to the duty of oversight and the recent decision of the Delaware Chancery court in a shareholders derivative lawsuit brought by the shareholders of McDonalds.
- April 16-18, 2023
Chapman attorney Nancy Burke is attending and Chapman is sponsoring the 2023 NAHEFFA Spring Conference.
The Puerto Rico Electric Power Authority (“PREPA”) has been in debt adjustment proceedings since 2017 under the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”), which was signed into law in 2016.
- March 28-29, 2023
Chapman's Seema Ganatra Patel is speaking on a panel at Connected America 2023. Chapman partners Hillary Phelps and Larry White are attending.
- US-Israel Legal Review 2022
Distressed US assets present unique investment opportunities for those willing to accept certain levels of risk and create value. 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 investing in the United States in the US-Israel Legal Review, published by Israel Desks.
On March 15, 2023, the U.S. Securities and Exchange Commission (“SEC”) issued a series of proposals designed to improve firms’ preparedness and responses to cyber incidents. The proposals, which would impact many of the financial services industry participants regulated by the SEC, generally require that firms establish policies and procedures to better prevent and detect cyber incidents and disclose certain cyber incidents to clients and the SEC within specified time periods.
On January 25, 2023, the U.S. Securities and Exchange Commission (“SEC”) issued a proposed rule to prevent and avoid material conflicts of interest in certain securitization transactions. The rule would prohibit securitization participants from engaging in certain transactions that could incentivize structuring an asset-backed securities (“ABS”) transaction in a way that would put the securitization participant’s interests ahead of the interests of the ABS investors.
On March 14, 2023, an announcement from the CEO of the newly-created, full-service FDIC-operated Bridge Bank was posted on the Silicon Valley Bank website indicating that the Bridge Bank has “fully stepped into the shoes of the former Silicon Valley Bank.”
On Monday, March 13, 2023, the Federal Deposit Insurance Corporation transferred all deposits—both insured and uninsured—and substantially all assets of the former Silicon Valley Bank to Silicon Valley Bank, N.A, a newly created, full-service FDIC-operated ‘bridge bank’. The FDIC has not stated whether the bridge bank has assumed funding obligations under the former Silicon Valley Bank’s unfunded loan commitments.
Included in this Frequently Asked Questions are some general observations on the Federal Deposit Insurance Corporation (“FDIC”) receivership process for Silicon Valley Bank (“SVB”). The specifics of the receivership process are uncertain at this early stage and, hopefully, more guidance with respect to the issues discussed below will be provided by the FDIC over the next few days.
Chapman welcomes litigation, bankruptcy, and restructuring team Dan Flores, Tim Wheeler, Alex Kress, and Michael Samuels to our Litigation Group in New York.
- March 9-10, 2023
Chapman's Hillary Phelps is serving as Chair of the National Association of Bond Lawyers (NABL) U Presents The Institute.
Chapman is a proud sponsor of the 22nd Annual IMN/ELFA Investors Conference. Chapman attorneys Aaron Efta, Demetrio Festa, Craig Fishman, Melanie Gnazzo, John Hitt, and Tom Howard are attending.
On February 13, 2023, the IRS released Notices 2023-17 and 2023-18, which provide guidance on energy incentive tax credit provisions that were amended by the Inflation Reduction Act of 2022 (the "IRA"). Taxpayers and their advisors have been eagerly awaiting guidance on many aspects of the IRA's changes. The guidance in Notices 2023-17 and 2023-18, however, does not cover many of the most pressing issues regarding the new tax credit rules, such as the details of how to obtain a refund of tax credits under the new “direct pay” provision and how to comply with the prevailing wage and apprenticeship requirements. The IRS has stated that it will issue additional guidance on the IRA's changes to existing tax credit provisions in the future.
The U.S. Supreme Court recently took up In re Grand Jury, No. 21-1397, from the U.S. Court of Appeals for the Ninth Circuit to address a common, recurring, and sometimes vexing question as to attorney-client privilege: how to apply the privilege to communications with counsel that contain both legal and non-legal advice? This is a particularly important question for corporate in-house counsel who, as the courts often say, “wear two hats,” providing both legal and business or policy advice to their employers.
On February 22, 2023, the New York Stock Exchange (“NYSE”) proposed the adoption of new listing standards contained in the Corporate Governance section of the NYSE Listed Company Manual (the “Manual”). New Section 303A.14 would “require issuers to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers.”
- February 26 - March 1, 2023
Chapman is a proud sponsor of SFVegas 2023, the largest gathering of structured finance professionals in the world, presented by the Structured Finance Association (SFA).
On February 15, 2023, the U.S. Securities and Exchange Commission (the “SEC”) adopted rule changes to Exchange Act Rule 15c6-1, shortening the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade date (T+2) to one day (T+1).
On February 15, 2023, by a vote of 4 to 1 with only Commissioner Peirce voting no, the U.S. Securities and Exchange Commission proposed to amend the content of Rule 206(4)-2 under the Investment Advisers Act of 1940 (the “Advisers Act”), known as the Custody Rule, and redesignate it as Rule 223-1 under the Advisers Act, now known as the Safeguarding Rule. If adopted, the proposal would, among other things, expand the coverage of the Advisers Act’s custody provisions beyond “client funds and securities” to include any client assets of which an adviser has custody, a change that would bring within the rule’s coverage all digital assets, including non-securities such as commodities. Such a change would impose a requirement on many investment advisers that hold client assets to place those assets with a “qualified custodian,” despite a current lack of widespread availability of such service providers for many digital assets.
- February 8-10, 2023
Chapman is a proud sponsor of the Fund Finance Association (FFA) 12th Annual Global Fund Finance Symposium.
Chapman’s Pro Bono Counsel Sara Ghadiri is a passionate advocate for people who cannot use their voice in the American legal system.
The much anticipated updated regulations for disclosure requirements for commercial financing in New York have been adopted by the New York Department of Financial Services ("NYDFS").
- January 31 - February 3, 2023
Chapman is a proud sponsor of the 2023 Turnaround Management Association (TMA) Distressed Investing Conference.
Sara Ghadiri was interviewed by HIAS about the firm’s work to support the Afghan Asylum Pro Se+ Project.
This Chapman Insights article is part of our ongoing series on Real Estate Investment Trust (REIT) financings.
- January 2023 (Originally Published August 23, 2022)Pratt's Journal of Bankruptcy Law
Pratt's Journal of Bankruptcy Law republished a Chapman Client Alert.
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”).
- January 26-27, 2023
Chapman attorneys Kent Floros, Kyle Harding, and Anjali Vij are speaking at the 2023 Illinois Association of Park Districts / Illinois Park and Recreation Association Soaring to New Heights Conference.
- January 23-26, 2023
Chapman is a proud sponsor of the 2023 Private Placements Industry Forum (PPIF) attended by Chapman's Corporate Finance Department attorneys.
Chapman welcomes Juan Arciniegas our Corporate and Securities Department and Investment Management Group. Juan focuses his practice on transactional, regulatory, and compliance matters associated with a broad range of derivatives and structured finance transactions.
- January 16-17, 2023
Chapman attorney Paul Carman chaired a panel discussion at the 12th Annual London Finance and Capital Markets Conference.
This Chapman Insights article is the first in a series on Real Estate Investment Trust (REIT) financings and focuses on collateral structures. A REIT may incur indebtedness for a variety of purposes, including to smooth out cash flow, as a bridge to an additional capital raise, and/or to leverage its assets for the purpose of acquiring additional assets. While there are many different forms this indebtedness can take — from bank debt to bond issuances — this article highlights considerations when the debt incurred is from a bank or bank group.
Chapman is pleased to announce that on January 1, 2023, Kelley Bender succeeded Bill Libit as Chapman’s Chief Operating Partner (COP).
The Inflation Reduction Act (the “IRA”), which became law in August 2022, provides one of the most significant packages of renewable energy incentives in recent history. Most of the renewable energy provisions take the form of extended and expanded tax credits, which apply to investments in solar, wind, geothermal and other nontraditional energy resources. One tax credit provision of the IRA that will be of interest to ordinary consumers are the changes to the tax credit for taxpayers who purchase an electric vehicle (the “EV tax credit”).
The Inflation Reduction Act (the "IRA") is being hailed as one of the most significant legislative actions in recent history intended to incentivize investment in renewable energy technologies. The IRA generally achieves this through the extension and broadening of existing tax credit provisions that apply to investments in clean energy technologies such as solar, wind and geothermal. Since the IRA became law in August 2022, taxpayers have been eagerly awaiting regulations and other guidance on how to apply the new provisions and how to claim the tax credits. On November 30, 2022, the IRS issued the first item of guidance on these provisions in the form of IRS Notice 2022-61 (the "Notice").
The NAIC’s multi-year process of modifying its accounting rules to confirm which debt instruments qualify as bonds for regulatory accounting purposes is of interest to insurance companies that use rated notes issued by feeder funds to facilitate their investments in private credit funds. This Chapman Insights article addresses the scope and current status of those modifications and the impact of those modifications on such rated notes.
The Inflation Reduction Act (the “IRA”), which became law on August 16, 2022, includes only a handful of tax provisions. Though few in number, the new provisions are expected to have a major impact on taxpayers. The corporate minimum income tax and excise tax on stock buybacks are both entirely new tax regimes implemented under the IRA. In addition, the IRA has introduced major changes to the investment tax credit (the “ITC”) and the production tax credit (“PTC”), which are intended to encourage investment in renewable energy projects, such as solar and wind projects.
The success of Ultra Petroleum bondholders’ make-whole claims is grounded in the unusual circumstance of a solvent debtor, with the Fifth Circuit unambiguously holding that make-whole entitlements in non-solvent-debtor cases must be disallowed.
Chapman represented the Chamber of Digital Commerce in connection with its “Spot Bitcoin ETF Initiative” which set out to gain a deep understanding of the industry’s experience in pursuit of a registered Spot Bitcoin ETF and provide insight into the most realistic avenues for ultimately getting the SEC to approve this widely anticipated investment product.
On June 14, 2022, the Securities and Exchange Commission charged the City of Rochester, New York, Rosiland Brooks-Harris, the former finance director of the City, Everton Sewell, the former chief financial officer of the Rochester City School District, and Capital Markets Advisors and its principal Richard Ganci with fraud in connection with the 2019 sale of $119 million in municipal bonds.
The Securities and Exchange Commission is taking significant steps to combat “greenwashing,” which occurs when a company conveys false or misleading information to overstate its environmental or sustainability practices, as well as other activities the SEC perceives to be potentially misleading to investors with respect to a company’s ESG efforts.
In an opinion issued on June 15, 2022, the Delaware Supreme Court reversed a decision by the Chancery Court and found that a transfer by an insolvent corporation of substantially all of its assets to a newly created entity (“SeeCubic”) controlled by its secured creditors, in full satisfaction of its debts, violated the corporation’s charter.
- April 7, 2020 (Updated June 28, 2022)
On February 19, 2020, the Small Business Reorganization Act came into effect and Debtors with aggregate liabilities that do not exceed $2,566,050 were provided an opportunity to resolve their outstanding liabilities. But even before the SBRA could see its first successes (or failures), the Coronavirus Aid, Relieve and Economic Security Act of 2020 increased a small business’s debt threshold to $7.5 million.
On June 2, 2022, the Securities and Exchange Commission charged the Town of Sterlington, Louisiana, its former mayor, Vern A. Breland, the town’s unregistered municipal advisor, Twin Spires Financial LLC and its owner, Aaron B. Fletcher with fraud in connection with the sale of $5.8 million in municipal bonds in two offerings in 2017 and 2018.
The Delaware Supreme Court is currently considering an appeal of a series of decisions by the Court of Chancery which held that a vote of a majority of shareholders is not required for an insolvent company to transfer its assets to its secured creditors.
- May 2022Journal of Corporate Renewal
This article in the Journal of Corporate Renewal, authored by Chapman Partner Scott A. Lewis, outlines the legal developments stemming from Puerto Rico's economic crisis.
As interested parties look for more direction on Environmental, Social and Governance (“ESG”) matters, the Loan Syndication and Trading Association (“LSTA”) recently issued new Guidance for Green, Social, and Sustainability-Linked Loans External Reviews (“External Review Guidance”) and Guidance on Social Loan Principles (“Social Loan Principle Guidance”). A summary of this guidance is below.
At the urging of investors and in accordance with the Biden Administration’s climate agenda, the United States Securities and Exchange Commission (“SEC”) yesterday issued long-awaited new proposed rules to increase climate-related disclosures. The Enhancement and Standardization of Climate-Related Disclosures for Investors (the “Proposed Rule”), if finalized, would amend the SEC’s rules under the Securities Act of 1933 and Securities Act of 1934 to require that registrants provide robust climate related information in their registration statements and annual reports. The rule would apply to all domestic and foreign companies required to be registered with the SEC.
On February 10, 2022, the Securities and Exchange Commission (the “SEC”) proposed amendments to certain rules and regulations under the Exchange Act of 1934, as amended (the “Exchange Act”), that govern beneficial ownership reporting (the “Proposed Amendments”).1 The SEC provided that updating these reporting requirements for modern advances in the securities market will reduce information asymmetries and promote transparency and address the timeliness of key filings. Specifically, the Proposed Amendments are aimed at, among other things: (i) shortening deadlines regarding filing of Schedule 13D and Schedule 13G; (ii) clarify how certain derivatives acquired with control intent are treated with respect to beneficial ownership reporting; and (iii) clarify when a “group” is formed for purposes of beneficial ownership reporting.
The Public Finance Initiative (PFI) and the National League of Cities (NLC) have launched the Bond Markets and Racial Equity Project to identify the factors in a municipal bond issuance that signal progress toward racial equity and income equality to investors and other stakeholders. Additionally, PFI and NLC will use the Project to develop resources that can be used by governmental issuers to center racial equity in municipal bond-funded infrastructure investments and to measure how social determinants of equity change over time on a uniform basis. The unprecedented Project is funded by a $4M grant from the Robert Wood Johnson Foundation. By funding the Project, the Foundation aims to help issuers leverage the municipal bond market in a meaningful way to help correct racial and economic inequities.
- Independent Directors of Distressed Companies: Considerations for Appointment to the Governing Board
The proliferation of investments in small, family-owned and mid-cap companies by private equity funds has led to changes in corporate governance provisions in the acquired companies’ organizational documents. Some private equity funds team up with existing management and take a minority position in the acquired company, while others will make an investment only if they can acquire controlling interest or 100 percent ownership of a company. In cases where a fund acquires a controlling interest in a company, it will often populate the company’s governing body with the fund’s principals or employees and the company’s chief executive. The fund may also seek to add outside directors with industry expertise to help govern the company. Where a private equity fund acquires a non-controlling interest, it will often seek to protect its investment by having consent and/or veto rights for certain significant transactions – for instance, the incurrence of debt, issuance of additional equity, and acquisition or disposition of assets. Thus, the organizational documents of a company may contain provisions restricting certain activities without the requisite consent of certain directors or equity holders.
Environmental, Social and Governance (“ESG”) investing continued to grow throughout 2021 and this growth is expected to continue into 2022 as ESG investments are estimated to surpass $41 trillion in assets under management globally by the end of the year. ESG investing occurs when investors make investment decisions based on a company’s environmental, social and governance policies and performance alongside traditional financial metrics. As investment firms, lending institutions, and individual investors are increasingly looking at ESG factors to identify material risks and growth opportunities, a number of trends are expected to emerge in the upcoming year. These include regulation of ESG disclosures, growth in green technology, renewable energy and infrastructure investments, and heightened standards associated with sustainable finance.
On February 9, 2022, the Securities and Exchange Commission (the “Commission”) voted 3 to 1 to propose new and amended rules under the Investment Advisers Act of 1940 (the “Advisers Act”) to require advisers to private funds to provide additional disclosures to investors in such funds, prohibit certain types of preferential treatment to investors and impose new requirements related to fund audits, books and records and adviser-led secondary transactions.
On January 18, 2022, Judge Laura Taylor Swain of the United States District Court for the District of Puerto Rico entered an order under PROMESA (as defined below) confirming a Plan of Adjustment (the “Plan”) of the Commonwealth of Puerto Rico (the “Commonwealth”), the Employees Retirement System of the Government of Puerto Rico (the “ERS”), and the Puerto Rico Public Buildings Authority (the “PBA”).1 The Plan’s confirmation is a major milestone for the Commonwealth and its creditors. The Commonwealth’s restructuring proceeding under Title III of PROMESA is the largest municipal restructuring in United States history.
On December 22, 2021, in a memorandum opinion on a motion to dismiss, the Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) (i) provided further guidance as to what qualifies as “voluntary” redemption of debt for purposes of make-whole claims, (ii) held that, without more, a make-whole payment is not triggered by a redemption automatically resulting from a voluntary bankruptcy filing, if the governing contract only provides for payment of such premium prior to “maturity” and (iii) determined that neither the Bankruptcy Code nor the “solvent debtor exception” requires a solvent debtor to pay an unimpaired unsecured creditor post-petition interest at the applicable contract rate, finding that payment of interest at the federal judgment rate is sufficient. The Bankruptcy Court left open whether make-whole claims could be disallowed as unmatured interest.
The Internal Revenue Service (“IRS”) has released a revised Form 8038‑CP, Return for Credit Payments to Issuers of Qualified Bonds, including new Schedule A, Specified Tax Credit Bonds Interest Limitation Computation and related instructions. The form and instructions were updated to accommodate electronic filing of Form 8038‑CP in 2022.
As originally discussed in our 2019 Action Item, the continuing, low interest rate environment has caused many insurance companies to turn to private credit funds to diversify their credit portfolios and increase their returns. Private credit funds that offer insurance companies the opportunity to participate in their funds indirectly through a rated-debt feeder fund structure provide insurance companies an opportunity to lower their risk-based capital requirements when compared with investing directly in such credit funds. As discussed in our 2021 Chapman Insights, investing in private credit funds through a rated-debt feeder structure is not without legal complexities, but many insurance companies have found those complexities to be worth the regulatory capital relief that may be available by investing through a rated-debt feeder structure.
The IRS published final LIBOR transition regulations in the Federal Register on January 4, 2022. The regulations allow modifications of debt instruments and other contracts to replace LIBOR without triggering a reissuance or deemed exchange if certain conditions are met.
- Journal of Taxation of Financial Products
This article in the Journal of Taxation of Financial Products outlines tax-exempt municipal debt securitization transactions and associated tax issues. Chapman authors, David Nirenberg, Brent Feller, and Steven Kopp, provide an in-depth look at the primary tax issues for parties to both single-class and multiple-class tax-exempt bond securitization transactions.
The Occupational Safety and Health Administration released its anticipated COVID-19 Vaccination and Testing: Emergency Temporary Standard, which will require that workers at large private sector businesses be vaccinated or undergo weekly COVID-19 testing.
On September 16, 2021, the Securities and Exchange Commission charged Sweetwater Union High School District, a San Diego County, California, school district serving approximately 47,000 students, and its former Chief Financial Officer, Karen Michel, with making material misstatements and omissions in connection with the District’s April 2018 $28 million bond issue.
Lenders and investors are taking different approaches to building ESG portfolios based on the entity’s own preferences and values. However, one widely used tool involves screening of select assets or transactions that align with those values.
- September 2021Journal of Investment Compliance
The US Securities and Exchange Commission Division of Examinations has released its 2021 Examination Priorities. A discussion of the exam priorities is included in this article.
- July/August 2021Futures & Derivatives Law Report
In 2017, the Financial Conduct Authority, the U.K. authority that oversees the London interbank offered rate, announced that LIBOR may be phased out after the end of 2021. The announcement applied to all currency and term variants of LIBOR, including U.S. dollar denominated LIBOR.
The date of the General Primary Election to be held in 2022 has been changed from March 15, 2022, to June 28, 2022. On May 31, 2021, the Illinois General Assembly adopted Senate Bill 825, which became Public Act 102-0015 after being signed into law by the Governor on June 17, 2021.
On June 10, 2021, OSHA issued an Emergency Temporary Standard (ETS) applicable to the healthcare industry regarding COVID-19. The ETS applies to settings where any employee provides healthcare or healthcare support services, with certain specified exceptions.
As Environmental, Social and Governance (ESG) performance becomes more prominent, institutional investors, asset managers, financial institutions, and other stakeholders are increasingly looking at ESG factors in making investment and lending decisions. In doing so, these entities are relying on a number of information sources, including ESG ratings and reports.
- LexisNexis Practical Guidance
On April 13, the Department of Labor released guidance on the prohibited transaction exemption pertaining to fiduciary investment advice for retirement investors, employee benefit plans and investment advice providers.
A recent federal district court decision out of Massachusetts found that a bank was the true lender on a loan subsequently transferred to a trust consisting of student loans. Robinson and Spears v. Nat’l. Collegiate Student Loan Trust 2006-2, 2021 WL 1293707, Case No. 20-cv-10203 ADB (D. Mass. April 7, 2021).
At today’s Earth Day Climate Summit, President Joe Biden announced to world leaders that the United States is committed to cutting its greenhouse gas emissions by 50% to 52% from 2005 levels by 2030.
Last week the Loan Syndications and Trading Association, the Loan Market Association, and the Asia Pacific Loan Market Association jointly published their first ever Social Loan Principles.
On April 14, the U.S. Department of Labor announced guidance for plan sponsors, plan fiduciaries, record keepers, and plan participants on best practices for maintaining cybersecurity, including tips on how to protect the retirement benefits of participants.
In the past few days, two courts have actions that are of significance to marketplace lenders and their funding sources.
On April 9, 2021, the Securities and Exchange Commission Division of Examinations issued a Risk Alert highlighting observations made by the Division from recent examinations of investment advisers, registered investment companies, and private funds offering products and services that incorporate environmental, social, and governance factors.
- The Banking Law Journal
The Bankruptcy Court for the Eastern District of Michigan has expressed reservations about a Second Circuit decision regarding when transfers to financial institutions’ customers that are settlement payments or made in connection with securities contracts are entitled to protection from avoidance actions under the bankruptcy safe harbors.
The Securities and Exchange Commission this month announced that the Divisions of Corporation Finance, Examinations, and Enforcement are all undertaking climate or ESG-related initiatives.
The Department of Labor announced that it will not enforce its previously issued final rule regarding plan fiduciaries’ use of environmental, social and governance factors in selecting investments for tax‑qualified retirement plans.
On March 12, the Occupational Safety and Health Commission announced a National Emphasis Program for COVID-19. The NEP is in response to an Executive Order issued by President Biden directing the Secretary of Labor to launch a national program to focus OSHA enforcement efforts related to COVID-19 on industries with the largest numbers of workers at serious risk.
The Securities and Exchange Commission’s Division of Examinations has released its 2021 Examination Priorities.
Environmental, Social and Governance investing in the United States has reportedly reached an estimated $250 billion in assets under management and is expected to see continued growth in 2021 and beyond.
Investor interest in rated-debt feeder funds has grown since we first issued our Action Item concerning such funds in March 2019. We expect this interest to continue as the private credit market expands through the COVID-19 crisis.
On February 4, the U.S. Department of Justice and Federal Trade Commission announced they would be suspending the practice of allowing early ends to the merger review process under the Hart-Scott-Rodino Act.
The Financial Industry Regulatory Authority, Inc. recently issued its 2021 Report on FINRA’s Risk Monitoring and Examination Activities. The new Report is designed to assist FINRA member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations.
On January 26, Moody’s Investors Service announced it had published a new methodology for rating US public school districts that provide education or educational services.
On December 27, the Consolidated Appropriations Act, 2021 was signed into law, which, among other things, contains an important amendment to Section 547 of the United States Bankruptcy Code.
On December 22, the U.S. Securities and Exchange Commission adopted amended Rule 206(4)‑1 under the Investment Advisers Act of 1940, as amended, which addresses investment advisers marketing their services to clients and investors
Chapman attorney Rebecca Wallenfelsz discusses key estate planning matters, including important information that families should know both before and while they provide care for loved ones.
Chapman served as counsel to the underwriter in connection with a first-of-its-kind $236 million tax-exempt “receivables” financing of the Lincoln South Beltway public-private partnership project, which was named The Bond Buyer’s 2020 P3 Deal of the Year.
Ryan Bowen, a partner in Chapman’s National Public and Health & Education Finance Department, was named the Texas Association of Local Housing Finance Agencies 2020 Member of the Year in recognition of his work on behalf of housing issuers in the State of Texas.
Chapman attorney Rebecca Wallenfelsz discusses investment strategies and the current state of the market with StrategIQ Financial Group's Chief Investment Officer Bradley J. Rathe.
On November 17, the Securities and Exchange Commission adopted amendments to Rule 302(b) of Regulation S-T, which will provide more flexibility in connection with SEC filings by allowing the use of electronic signatures in authentication documents.
On October 30, the Department of Labor issued a final rule which amends its 1979 investment duties regulation under the Employee Retirement Income Security Act of 1974, as amended, to update and clarify its position with respect to ERISA plan fiduciaries’ use of environmental, social and governance factors in selecting investments.
This fall, the Securities and Exchange Commission has proposed additional avenues for businesses to raise capital away from the use of registered broker‑dealers.
Chapman’s innovations team creates app to help Legal Aid Chicago expand access to criminal record expungement services.
Under the expanded Medicare Accelerated and Advance Payments Program, more than 22,000 Medicare Part A providers and 28,000 Medicare Part B suppliers requested and received accelerated or advance payments from the Centers for Medicare & Medicaid Services to help ease financial strain and uncertainty caused by the COVID-19 pandemic.
- Employee Benefit Plan Review
In June, the IRS issued several notices that provide more details on the SECURE Act, passed in late 2019, and the CARES Act, passed in late March. This Client Alert will cover two primary topics: Coronavirus-Related Distribution Rules and the 2020 RMD Waiver Rule.
In 2015, the Second Circuit Court of Appeals issued an opinion finding that, under the doctrine of federal preemption, a non-bank assignee of a bank loan could not charge and collect the rates and fees that the bank could charge and was therefore subject to state law usury limits.
As companies default under their credit agreements, lenders have to decide what course of action is appropriate to effectuate their goals. Should the lender give the borrower breathing room by entering into a forbearance agreement in exchange for certain milestones, or is more aggressive enforcement action required?
Chapman’s innovations team automates the generation of essential estate planning documents to help CDEL expand access to estate planning services for underserved people in Illinois.
- The Banking Law Journal
The Office of the Comptroller of the Currency recently issued its final rule codifying as a regulation that the interest charged on loans that is permissible before the loan is transferred remains in effect after the loan is transferred.
- PD Quarterly
In a new article, Chapman’s Chief Talent Officer Stacey Kielbasa and Professional Development, Diversity and Pro Bono Manager Shannon Burke write about law firm policies relating to remote work and distance learning during and after the COVID-19 pandemic.
The parties to the closely watched litigation by the Attorney General of Colorado as Administrator of the Colorado Uniform Consumer Credit Code against two marketplace lending platforms have agreed to settle the litigation.
This is the third and final Client Alert of a three-part series relating to executing a Strict Foreclosure. As discussed in our previous Client Alerts, it is imperative to focus on who is going to run the business after consummating the Strict Foreclosure.
On July 22, Online Lending Policy Institute hosted a conversation covering the new FDIC rule issued on June 25 which adopts the common law doctrine of “valid when made” as well as other topics related to fintech.
- Journal of Taxation of Financial Products
The CARES Act, which was designed to support individuals and businesses affected by the COVID-19 pandemic, was signed into law on March 27. This article summarizes various tax provisions in the CARES Act.
- Journal of Taxation of Financial Products
The CARES Act, which was enacted to support individuals and businesses affected by the COVID-19 pandemic, provides that borrowers experiencing financial hardship due to the national emergency declared by the President, may request and obtain forbearance on certain federally backed mortgage loans.
The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have been quite active in issuing or proposing new regulations and initiatives focused on financial technology and innovation in financial services.
This is the second Client Alert of a three-part series relating to executing a Strict Foreclosure.
In 2017, the UK authority that oversees the London interbank offered rate, announced that LIBOR may be phased out after the end of 2021. The announcement applied to all currency and term variants of LIBOR, including US dollar denominated LIBOR.
This Client Alert is part of a three Alert series. This Alert focuses on when Strict Foreclosure can be a lender’s best option and the potential path to execute a Strict Foreclosure.
The Federal Reserve has established the Main Street Loan Program to provide support to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic.
The Department of Labor proposed a new investment advice fiduciary rule, which generally reinstates the DOL’s longstanding investment advice fiduciary test and provides a new prohibited transaction exemption for such fiduciaries.
On June 11, the Online Lending Policy Institute hosted a conversation covering the expansive advance notice of proposed rulemaking in the fintech space.
On June 16, the Securities and Exchange Commission issued an order granting registered municipal advisors an emergency, temporary conditional exemption from broker registration under Section 15 of the Securities Exchange Act of 1934 in connection with certain direct placement activities.
The General Assembly passed Senate Bill 2135 on May 23 and the Governor signed the same on June 12. The Act provides greater flexibility for public bodies to conduct business remotely when in-person attendance is not feasible due to a disaster.
On June 11, the Federal Reserve Bank of New York issued an updated Notice of Interest for the Municipal Liquidity Facility to reflect the expansion of eligibility for the facility.
On June 5, the Paycheck Protection Program Flexibility Act of 2020 was signed into law and made key changes to the Paycheck Protection Program just a few weeks before the program’s official termination on June 30.
On June 3, the Federal Reserve announced expanded eligibility for its Municipal Liquidity Facility. Under the new terms, a State that does not have at least two total counties or cities that meet the minimum population requirements will be able to identify a city or county to be an Eligible Issuer.
On May 29, the Office of the Comptroller of the Currency issued its final rule codifying as a regulation that the interest charged on loans that is permissible before the loan is transferred remains in effect after the loan is transferred.
This client alert will address questions about loan forgiveness under the Paycheck Protection Program for both borrowers and lenders as known at the current time, but we note that legislative efforts currently underway may change the terms of these loan forgiveness provisions.
On May 23, the General Assembly passed Senate Bill 2135, providing for amendments to Sections 2.01 and 7 of the Open Meetings Act of the State of Illinois. The changes provide greater flexibility for public bodies to conduct business remotely when in-person attendance is not feasible due to a disaster.
Rebecca Wallenfelsz, a partner in Chapman's Trusts and Estates Department, participated in an interview on the Divorce and Beyond Podcast.
On May 4, the IRS issued Revenue Procedure 2020‑19, which provides temporary relief to publicly‑offered regulated investment companies and publicly‑offered real estate investment trusts, with respect to stock distributions that are intended to qualify for the dividends-paid deduction.
On May 5, in a case of first impression in Delaware, a Delaware bankruptcy judge, rejected a preferred shareholder’s motion to dismiss Pace Industries’ chapter 11 cases for failure to obtain its consent to file, a right provided in the debtor’s certificate of incorporation, finding that a minority shareholder’s blocking rights were unenforceable as violative of federal policy.
The Federal Reserve today issued an amended term sheet establishing pricing criteria for its Municipal Liquidity Facility last described in our April 29 Client Alert. The Federal Reserve Bank of New York also issued today a revised FAQs for the facility.
On May 4, the SEC Chairman and the Director of the Office of Municipal Securities issued a public statement encouraging issuers, conduit borrowers and other obligated persons of municipal securities to make disclosures describing the effects of the COVID‑19 pandemic on their finances and operations.
- May 7, 2020 (Updating an April 14, 2020 Client Alert)
This alert explores the three loan facilities constituting the Main Street Lending Program: the newly announced Main Street Priority Loan Facility, the revised Main Street New Loan Facility, and the revised Main Street Expanded Loan Facility.
Treasury Department guidance issued on April 22 summarizes three requirements for the use of payments from the Coronavirus Relief Fund. On May 4, FAQs were issued that “supplements” the guidance by answering a long series of questions about Eligible Expenditures and a shorter list of questions about the Administration of Fund Payments.
On May 5, federal banking regulators adopted an interim final rule that neutralizes the liquidity coverage ratio impact for banks participating in the Federal Reserve’s Money Market Mutual Fund Liquidity Facility and the Paycheck Protection Program Liquidity Facility.
On April 27, the Federal Reserve issued a press release announcing changes to the Municipal Lending Facility described in previous client alerts. At the same time, the Federal Reserve Bank of New York, as sole Reserve Bank lender for the facility, issued a FAQs for the facility.
The Paycheck Protection Program and Health Care Enhancement Act was signed into law today. This alert summarizes key portions of the Act and recently released information from the Department of Health and Human Services explaining its plans to allocate and distribute the Provider Relief Fund money.
- April 22, 2020 (Updating an April 13, 2020 Client Alert)
On April 9, the Federal Reserve issued term sheets for six “new” funding facilities under the CARES Act. This client alert describes in detail the Municipal Liquidity Facility.
Chapman’s "Bankruptcy and Aircraft Finance" handbook details certain special rights afforded aircraft creditors and some of the strategies employed. With the airline industry suffering devastating losses as a result of the COVID-19 pandemic, we hope this will be a useful resource for creditors.
On April 13, the IRS released Revenue Procedure 2020-26, which provides that forbearances and related modifications of certain mortgage loans will not be treated as replacing the unmodified loan with a newly issued loan for purposes of the REMIC and grantor trust qualification tests (and related REMIC-related taxes).
On April 9 the Federal Reserve issued term sheets for six “new” funding facilities under the CARES Act. Three of those facilities provide for direct loans to companies.
On April 8, the SEC adopted rule amendments that will allow closed-end funds and business development companies the ability to use registration, offering and communications rules that are currently available to publicly‑registered operating companies.
With the Regulation Best Interest compliance date set for June 30, 2020, the SEC's Office of Compliance Inspections and Examinations recently announced that it would begin conducting broker‑dealer examinations focused on Reg BI compliance and outlined the scope of exams likely to occur in the first year following the compliance date.
With the Form CRS compliance date set for June 30, 2020, the SEC's Office of Compliance Inspections and Examinations recently announced that it would begin conducting examinations focused on Form CRS compliance and outlined the focus of exams likely to occur in the first year following the compliance date.
The Coronavirus Aid, Relief, and Economic Security Act to support individuals and businesses affected by COVID-19 pandemic was signed into law on March 27. This client alert summarizes the various tax provisions in the CARES Act.
On April 9, 2020, the Federal Reserve released a revised term sheet for TALF 2020 that, among other things, broadens the range of assets that qualify as eligible collateral under the program.
Earlier today the Federal Reserve announced it would establish six new funding facilities supported by Treasury funding authorized by Section 4003(b)(4) of the CARES Act.
In these uncertain times, parties to bond documents (including documents such as continuing covenant agreements) may wish to waive, modify or renegotiate certain provisions, including the forbearance and deferral of debt service, the waiver of provisions or the exercise of certain options.
The SEC has taken several actions to assist funds and advisers in light of the effects of COVID-19. Similarly, FINRA also has taken several actions to provide guidance and certain regulatory relief to its member firms.
The Federal Reserve has established a webpage that provides links to a FAQ and other documents for the Money Market Fund Liquidity Facility described in earlier Chapman client alerts.
Yesterday the Federal Reserve announced it was temporarily removing Treasury securities and deposits at Federal Reserve Banks from the supplementary leverage ratio applicable to Category I-III bank holding companies or US intermediate holding companies of foreign banks.
In response to the COVID-19 pandemic, federal and state courts throughout the country are issuing general orders providing for important changes to procedures for pending and newly scheduled court hearings. This is a summary of such procedural changes for the federal courts located in Chicago and the state courts in Cook and the surrounding collar counties.
- April 1, 2020 (Updating a March 31, 2020 Client Alert)
This client alert has been updated from our March 31, 2020 client alert to reflect guidance from the U.S. Treasury Department and the Small Business Administration.
The $2 trillion stimulus bill is the largest stimulus bill in U.S. history and Congress’ third major piece of legislation to address the COVID-19 crisis. This client alert summarizes notable CARES Act provisions for Institutions of Higher Education.
The cornerstone of the CARES Act’s relief package for small businesses is the Paycheck Protection Program, under which the Small Business Administration will guarantee up to $349 billion in small business loans.
The Coronavirus Aid, Relief, and Economic Security Act, a bill designed to provide financial support and resources to individuals and businesses affected by COVID-19 pandemic, was signed into law on March 27. This client alert summarizes notable CARES Act provisions for health care businesses, including hospitals and physician practices.
This Client Alert focuses on some major programs established by the Coronavirus Aid, Relief, and Economic Security Act to financially support, through loans or grants, (1) small businesses, (2) larger businesses, and (3) states and municipalities.
Thomson Reuters recently published a case study examining Chapman's utilization of Contract Express to automate document drafting and streamline transactions.
While many questions and uncertainties exist with respect to the impact of COVID-19 on the economy, this is an overview of the prominent issues for lenders to consider regarding existing middle market credit agreements – particularly, as a spike in amendment and waiver activity is expected in coming months.
As Employers are facing unprecedented health and safety issues in connection with the COVID-19 pandemic and the rapidly changing nature of government mandates put in place to contain the spread of the virus, the United States Department of Labor, Occupational Safety and Health Administration has issued Guidance on Preparing Workplaces for COVID-19.
H.R. 748 better known as the CARES Act or more informally as the $2 trillion stimulus bill signed by President Trump on March 27, 2020, contains one important provision for all consumer lenders and another two provisions related to federally-backed mortgage loans.
On March 23, the Federal Reserve announced the establishment of the Term Asset-Backed Securities Loan Facility to support the flow of credit to consumers and businesses.
On March 23, the Federal Reserve issued further amendments to add negotiable certificates of deposit and all short-term municipal securities to the list of eligible collateral.
On March 23, the Federal Reserve added municipal issuers and amended the pricing for the commercial paper funding facility announced on March 17 and issued other “program terms and conditions” posted on the website of the Federal Reserve Bank of New York.
This morning, the Board of Governors of the Federal Reserve System announced sweeping actions to help the economy.
On March 18, the Federal Reserve announced a Money Market Fund Liquidity Facility to make loans to banks and certain affiliates secured by certain assets acquired from “prime” money market funds. Earlier today, the Federal Reserve issued amendments to the program.
On March 17, the Federal Reserve Board announced the establishment of two emergency funding facilities that closely mirror facilities established in 2008 during the last financial crisis in providing liquidity to both short and long term funding markets.
In response to the COVID-19 pandemic, federal and state courts throughout the country are issuing general orders providing for important changes to procedures for pending and newly scheduled court hearings.
The SEC re‑proposed Rule 18f-4, a new exemptive rule designed to provide a more comprehensive approach to the regulation of funds’ use of derivatives and certain other transactions.
On February 18, the SEC issued an order approving a proposed MSRB rule change updating the MSRB’s Electronic Municipal Market Access system website.
On February 7, the SEC Office of Municipal Securities published Staff Legal Bulletin No. 21 that addresses the application of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934.
On January 13, 2020, the Delaware Supreme Court reversed, in part, an appeal from the Delaware Court of Chancery in BlackRock Credit Allocation Income Trust v. Saba Capital Master Fund, Ltd.
On February 10, the SEC’s Fixed Income Market Structure Advisory Committee approved a series of recommendations designed to improve the timeliness of disclosure in the municipal securities market.
This Client Alert covers the new rules that apply to decanting. It is the fifth installment in a six-part series on the new Illinois Trust Code.
The IRS has released a new Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds, along with new instructions. Form 8038-CP is used by issuers to claim payments from the federal government representing all or a portion of interest payable on direct pay bonds
The SEC's Office of Compliance Inspections and Examinations has released its 2020 Examination Priorities. This Client Alert includes a discussion of the exam priorities.
FINRA recently issued its 2020 Risk Monitoring and Examination Priorities Letter. The letter highlights the areas of focus for FINRA’s risk monitoring, surveillance and examination programs for 2020 and contain numerous links to Regulatory Notices, FINRA Reports and other resources to aid broker-dealers in complying with the priority areas.
- The Banking Law Journal
On September 17, the SEC announced proposed rules to update the statistical disclosures that bank and savings and loan registrants provide to investors and eliminate disclosures that overlap with other SEC rules, U.S. GAAP or IFRS.
Late in 2019, as part of a spending package, President Trump signed into law the Setting Every Community Up for Retirement Enhancement Act of 2019 or the SECURE Act. The legislation provides changes to defined contribution plans (such as 401(k) plans) and defined benefit pension plans.
Late in 2019, Congress passed the Setting Every Community Up for Retirement Enhancement or the SECURE Act. With few exceptions, the provisions in the Act are effective for retirement plans, IRAs, contributions and distributions on or after January 1, 2020.
The California Consumer Privacy Act of 2018 went into effect on January 1, 2020 and imposes extensive disclosure and record-keeping requirements on businesses that handle personal information.
Chapman is proud to have served as counsel to the banks and swap providers on a $6.5 billion financing that was named The Bond Buyer's 2019 Deal of the Year at an awards ceremony held December 4 in New York.
This Client Alert covers the new rules that apply to beneficiary representation. It is the fourth installment in a six-part series on the new Illinois Trust Code.
On November 22, in a fact-specific ruling, the U.S. Court of Appeals for the First Circuit held that two separate, but related Sun Capital Partners Inc. private equity investment funds were not liable for the multiemployer plan withdrawal liability of a bankrupt portfolio company that the two funds co-owned.
On November 25, the SEC re-proposed Rule 18f-4 under the Investment Company Act of 1940 as amended. Rule 18f-4 is intended to be a new exemptive rule that is designed to enhance the regulation of the use of derivatives by registered investment companies, including mutual funds, ETFs, closed-end funds, and BDCs notwithstanding the restrictions under the 1940 Act.
- November/December 2019Business Credit
This article in Business Credit magazine discusses best practices that unsecured creditors consider in determining early-on whether or not a customer is in financial distress, assessing the circumstances, and taking appropriate action.
On November 4, the SEC announced proposed amendments to Rules 206(4)-1 and 206(4)-3 under the Investment Advisers Act of 1940 to address investment adviser advertisements and payments to solicitors, respectively.
- Law360
On September 26, the SEC adopted final Rule 6c-11 under the Investment Company Act of 1940, and certain form amendments that standardize the regulatory regime governing exchange-traded funds.
- Fall 2019Journal of Investment Compliance
Fund sponsors are increasingly considering two similar types of registered closed-end investment companies known as “interval funds” and “tender offer funds” as an attractive alternative to open-end mutual funds, ETFs and traditional closed-end funds.
This Alert covers the new rules that apply to the modification or termination of irrevocable trusts. It is the third installment in a six-part series on the new Illinois Trust Code.
On September 26, the SEC adopted Rule 6c-11 under the Investment Company Act of 1940 and amendments to Form N-1A and Form N-8B-2 that overhaul the patchwork regulatory framework that currently governs the $3.32 trillion ETF industry. The adopted rule and form amendments are largely similar, but not identical, to the versions that were proposed in June 2018.
In a case of first impression, the Seventh Circuit recently held that a UCC financing statement that incorporates a description of collateral by reference to an unattached security agreement sufficiently “indicates” the collateral, such that a separate and additional description of the collateral is not required to properly perfect a lender’s security interest.
Chapman served as special counsel to an Illinois county in the state’s first transaction under a commercial property assessed clean energy (PACE) financing program, which allows property owners to obtain upfront financing from private capital providers for energy efficiency and renewable energy projects in new and existing buildings.
This Alert covers the newly created powers granted to a trustee under the ITC, a well as the previously existing, but now codified, powers. This Alert is the second installment in a six-part series on the new Illinois Trust Code, a version of the Uniform Trust Code.
- July/August 2019Pratt's Journal of Bankruptcy Law
In a decision that upends the expectations of the municipal bond market, a three-judge panel of the U.S. Court of Appeals for the First Circuit has ruled that the “special revenue” provisions of the U.S. Bankruptcy Code do not compel the payment of debt service on certain municipal bonds during the pendency of a bankruptcy proceeding.
- July/August 2019Pratt's Journal of Bankruptcy Law
In a recent decision, the U.S. Bankruptcy Court for the Southern District of New York held that liquidated damages provisions calculating damages based upon stipulated loss value schedules designed to provide the lessor/owner participant with a return on investment of 4% (and not as a proxy for actual damages) violated New York public policy and were unenforceable as penalties.
On July 16, in an open meeting of the FDIC Board of Directors a memorandum and resolution regarding a Notice of Proposed Rulemaking on a Proposed Amendment to Securitization Safe Harbor Rule was passed.
- July/August 2019The Banking Law Journal
The First Circuit recently found that a UCC filing amendment naming the debtor contained an appropriate name and that, when coupled with a corrected collateral description in the amendment, the bondholders’ lien was perfected and therefore unavoidable under the “strong-arm” provisions of the Bankruptcy Code.
- July/August 2019The Banking Law Journal
The US Court of Appeals for the Ninth Circuit is the latest court in a developing line of case law to find that the doctrine of equitable mootness applies to prevent an aggrieved creditor from unwinding a substantially consummated Chapter 9 municipal bankruptcy plan.
Last week, Governor Pritzker signed HB 1471, giving Illinois new trust laws as of January 1, 2020. This Alert is the first installment in a six-part series on the new Illinois Trust Code, a version of the Uniform Trust Code.
The Securities and Exchange Commission voted 3 to 1 to adopt highly anticipated new and amended rules, forms and guidance relating to registered investment advisers’ and broker-dealers’ conduct and interactions with retail customers.
- Pratt's Journal of Bankruptcy Law
In a case of particular significance to parties that enter into forward contracts as means of hedging the future price of commodities used in their business, the U.S. Bankruptcy Court for the Northern District of Ohio has found that a “forward contract merchant” must be in the business of entering into forward contracts in order to generate a profit, not merely as a hedge.
On April 25, the U.S. District Court for the Southern District of New York reversed a bankruptcy court’s finding that a bank’s imposition of a freeze on a married couple’s bank account upon the filing of their Chapter 7 bankruptcy petition, pending instructions from the Chapter 7 trustee, violated the automatic stay.
- Spring 2019Real Estate Finance Journal
Having failed in attempts to accelerate the termination of a CDO, an investor group holding senior notes filed an involuntary petition against an issuer to liquidate the CDO before its stated maturity under the U.S. Bankruptcy Code.
On March 28, the Securities and Exchange Commission charged the former controller of the College of New Rochelle, a New York-based not-for-profit college, with violating, and aiding and abetting violations of, the antifraud provisions of the federal securities laws.
Pension shortfalls. Crumbling infrastructure. Wage pressures. These are only a few of the budgetary pressures facing state and local governments. It’s no surprise that, with so many demands on limited tax dollars, funds needed to address social problems are being diverted.
On March 20, the Securities and Exchange Commission voted to propose amendments to existing rules and forms that, if adopted, would modify the registration, communication, offering and reporting processes applicable to registered closed-end investment companies and business development companies regulated under the Investment Company Act.
Insurance companies continue to look to alternative investment funds as a means to increase returns in this low interest rate environment and to add diversification to their portfolios. One impediment to increasing a concentration in alternative investments may be the higher risk-based capital requirements associated with alternative investments. Recently, various participants in the insurance, alternative investment, and rating agency industries have considered addressing that risk-based capital impediment by utilizing a bespoke rated-debt feeder fund structure.
In a break from other recent circuit court decisions, the Fifth Circuit ruled that amounts due under a make-whole provision contained in a note purchase agreement constituted unmatured interest and were not permitted to be paid to a creditor under the Bankruptcy Code.
In a case of constitutional importance, the US Court of Appeals for the First Circuit addressed whether members of the Financial Oversight and Management Board created by PROMESA are “Officers of the United States” subject to the US Constitution’s Appointments Clause.
- The Banking Law Journal
This article outlines the features of proposals to adjust the applicability of certain capital and liquidity tests and certain enhanced prudential standards for bank holding companies.
Effective February 27, 2019, there are two new reportable events for which an issuer must provide notice to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (EMMA) website.
The SEC Rule 15c2-12 amendments will be effective on and after February 27, 2019 with the effect described in the Release. In addition, the Release describes the SEC’s position on certain material financial obligations that may have an impact on primary offerings in addition to disclosures of reportable events made in the future under Rule 15c2-12.
The Financial Industry Regulatory Authority, Inc. recently issued its 2019 Risk Monitoring and Examination Priorities Letter. The Risk Monitoring and Examination Priorities Letter also directs members to their 2017 and 2018 Reports on Examination Findings. This Client Alert provides brief summaries of some of the more significant issues FINRA’s letter raises.
In December 2017, Congress added a provision to the tax code that allows some taxpayers to defer some capital gain and eliminate other gain if the taxpayer invests in an Opportunity Zone and certain conditions are met.
- The Banking Law Journal
A recent decision of the United States District Court for the District of Delaware has provided further support within the Third Circuit for so-called “gift” plans (i.e., plans in which a secured creditor class “gifts” a portion of its plan distribution to a junior class).
The beginning of each year provides an opportunity for investment advisers to review compliance and regulatory matters, including issues related to private investment funds and commodity pools.
On December 14, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations issued a Risk Alert reminding investment advisers of their recordkeeping obligations with respect to electronic messaging and summarizing their related observations from recent examinations.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations has released its 2019 National Exam Program Examination Priorities.
- Pratt's Journal of Bankruptcy Law
A recent court decision has provided guidance regarding the meaning of “governmental unit” under the U.S. Bankruptcy Code.This determination is important because if it is a “governmental unit,” an entity would only be eligible to file a bankruptcy petition if it is a “municipality” under the Bankruptcy Code and meets the other eligibility requirements for filing a municipal bankruptcy petition.
The Securities and Exchange Commission recently issued a no-action letter which allows broker-dealers to rely on investment advisers to perform some or all of their Customer Identification Program obligations under federal anti-money laundering legislation.
The state of Colorado initiated two lawsuits against online lending platforms. The suits alleged that the platforms had violated the state’s Uniform Consumer Credit Code by charging interest and some fees in excess of those allowed under Colorado law and that the consumer loan agreements utilized a non-Colorado governing law provision, also in violation of the law.
Providers of services acting as mere conduits for parties transferring money remain protected from fraudulent conveyance actions under the United States Bankruptcy Code, at least according to a recent bankruptcy court decision in the Eleventh Circuit.
New treasury regulations proposed by the Internal Revenue Service on October 31 significantly diminish the sting of Section 956 for many US corporations that own stock in non-US corporations that have investments in US property.
In October, the U.S. District Court for the Southern District of New York entered a final judgment against Christopher St. Lawrence, the former Supervisor of the Town of Ramapo, New York and Director of Finance and President of the Ramapo Local Development Corporation.
NetDocuments, the leading secure cloud-based content services platform for law firms, corporate legal teams and compliance departments, announced today at ndElevate, its annual customer and partner summit, that it acquired Closing Room, a deal management application developed by Chapman and Cutler LLP to streamline transactional closing processes.
- November/December 2018Pratt's Journal of Bankruptcy Law
In two recent cases, the Court of Appeals for the Seventh Circuit held that the Illinois Department of Revenue could not collect delinquent retail and sales taxes from the proceeds of assets sold pursuant to section 363 of the Bankruptcy Code.
- November/December 2018Pratt's Journal of Bankruptcy Law
A decision by the Court overseeing Puerto Rico’s bankruptcy-like Title III proceeding has reiterated what every secured creditor understands — perfection matters. The Court found that bondholders holding $2.9 billion in debt issued by the Employees Retirement System of the Government of the Commonwealth of Puerto Rico were rendered unsecured due to inadequate financing statements.
- November/December 2018Pratt's Journal of Bankruptcy Law
The U.S. Court of Appeals for the Fifth Circuit recently affirmed decisions of a Bankruptcy Court and District Court recharacterizing an alleged lease to a disguised financing arrangement. The Court determined that the transaction was “per se” a financing, and therefore did not need to go on to analyze the economic realities of the transaction in detail.
On September 30, the Governor of California signed into law Senate Bill No. 1235, which amends the California Financing Law (previously known as the Finance Lenders Law) to impose new disclosure requirements on licensed commercial lenders and brokers including for online lending programs doing business in California.
- October 2018
This desk reference is intended to provide an in-depth analysis of the numerous issues affecting an equipment lessor when dealing with a lessee after it has filed for bankruptcy protection.
- Law360
It is common for buyers of assets in bankruptcy cases to proceed to closing even if the court’s approval of the sale is under appeal. Their willingness to do so comes in large measure thanks to Section 363(m) of the Bankruptcy Code, which protects most sales from being unwound even in the face of an otherwise meritorious appeal.
The Internal Revenue Service recently provided excise tax relief for funds taxed as regulated investment companies that were required to increase their gross income because of the new Section 965 transition tax.
Earlier this month, Governor Jerry Brown of California signed into law a bill that sets some of the strongest clean energy standards in the world. Senate Bill 100 requires that one hundred percent of all retail sales of electricity in California come from clean energy sources by 2045.
The Jefferson County bankruptcy proceeding may have reached its culmination with a recent decision by the U.S. Court of Appeals for the Eleventh Circuit finding an appeal of the bankruptcy court’s approval of the Jefferson County plan of adjustment as equitably moot.
On August 22, the three federal banking agencies issued an interim final rule implementing the May 2018 banking law’s requirement that investment grade, liquid and readily marketable municipal obligations be treated as Level 2B “high quality liquid assets” under the liquidity coverage ratio rule.
- August 2018Journal of International Taxation
As an increasing number of jurisdictions have entered into intergovernmental agreements related to FATCA or agreed to mandate compliance with the OECD common reporting standard, exempt organizations are being asked to classify themselves in subscription agreements and forms provided to the investment vehicles.
On August 20, the SEC issued Release No. 34-83885 adopting amendments to Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The amendments add two new events to the list of reportable events for which an issuer or obligated person must provide notice to the MSRB's Electronic Municipal Market Access website.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations issued a National Exam Program Risk Alert outlining the most common deficiencies that OCIE staff has identified in recent examinations of registered investment advisers’ best execution practices.
- Pratt's Energy Law Report
On February 9, President Trump signed into law the Bipartisan Budget Act of 2018 which retroactively extended some temporary tax breaks and includes some additional provisions which were left out of the Tax Cuts and Jobs Act of 2017.
On June 14, the Board of Governors of the Federal Reserve System issued a final rule that establishes credit limits for single counterparties of US bank holding companies and foreign banking organizations with $250 billion or more in assets, and US intermediate holding companies of covered FBOs with $50 billion or more of consolidated assets.
On June 28, the Securities and Exchange Commission proposed Rule 6c-11 under the Investment Company Act of 1940 and amendments to Form N-1A and Form N-8B-2 that overhaul the patchwork regulatory framework that currently governs the $3.4 trillion ETF industry.
The United States Court of Appeals for the Ninth Circuit issued a decision reversing a lower court’s order that designated the vote of a secured bank creditor that had purchased claims from a subset of unsecured creditors for the admitted purpose of blocking confirmation of the debtor’s plan of reorganization.
In a case of first impression, the Illinois Appellate Court has held that a condominium association does not have to first sue the prior owner of a condominium for unpaid assessments before it can seek unpaid assessments from the new owner that purchased the condominium at a foreclosure sale.
- Q2 2018
The Municipal Securities Rulemaking Board recently published its 2017 Compliance Advisory for Brokers, Dealers and Municipal Securities Dealers. The Compliance Advisory outlines several MSRB rules that the MSRB believes present key compliance risks for brokers, dealers and municipal securities dealers.
A recent decision from the U.S. Court of Appeals for the Third Circuit has created a circuit split in how the federal circuit courts have interpreted the statute of limitations as it applies to the Fair Debt Collection Practices Act.
On May 22, the House passed Senate bill S. 2155, which would amend certain Dodd-Frank provisions and, primarily for smaller banks and credit unions, provide additional regulatory relief. President Trump is expected to sign the bill, so that it will take effect as law.
- LexisNexis Emerging Issues Analysis
This article discuss two recent decisions that have provided some insight into what happens when a debtor files a Chapter 13 bankruptcy petition as a means of redeeming sold real estate taxes.
On May 14, the Basel Committee on Banking Supervision issued two documents entitled “Criteria for Identifying Simple, Transparent and Comparable Short-Term Securitisations” and “Capital Treatment for Simple, Transparent and Comparable Short-Term Securitisations.”
Under 1991 US guidance, if a non-US partner sold its interest in a US partnership, the selling partner would look through to the business of the partnership and would be required to file a US tax return and pay US tax if the partnership would have had income effectively connected to a US trade or business on a deemed sale of its assets. But that guidance was reversed in a tax court case. Then the US position was reversed again in the Tax Cuts and Jobs Act.
Recently in Hackler v. Arianna Holding Co., the U.S. District Court for the District of New Jersey held that a real estate tax foreclosure sale can be set aside as a preferential transfer under Section 547 of the Bankruptcy Code.
- May 14, 2018
Today, the Basel Committee on Banking Supervision issued two documents entitled “Criteria for Identifying Simple, Transparent and Comparable Short-Term Securitisations” and “Capital Treatment for Simple, Transparent and Comparable Short-Term Securitisations.”
- Journal of Taxation
For non-US individuals and corporations that invest in real estate within the US, the rules that subject their gains to US federal income tax generally are found under Section 897. The Foreign Investment in Real Property Tax Act rules have often been attacked as a disincentive for overseas investors to enter the US real estate market.
On April 18, the Securities and Exchange Commission released a new interpretation addressing investment advisers’ fiduciary duties to their clients. The SEC’s proposed interpretive guidance reaffirms and clarifies duties owed by investment advisers to their clients under Section 206 of the Investment Advisers Act of 1940.
On April 18, the Securities and Exchange Commission proposed new Regulation Best Interest under the Securities Exchange Act of 1934 that would establish a federal standard of conduct for broker-dealers and natural persons who are associated persons of a broker-dealer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer.
The Securities and Exchange Commission recently proposed new and amended rules and forms under the Investment Advisers Act of 1940 and the Securities Exchange Act of 1934 to require registered investment advisers and broker-dealers to provide a brief relationship summary to retail investors regarding their offered services, the standard of conduct and fees associated with the services.
Today, the Securities and Exchange Commission voted 4 to 1 to propose highly anticipated new and amended rules and guidance relating to registered investment advisers’ and broker-dealers’ conduct and interactions with retail customers.
On April 9, 2018, Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York, in In re Avanti Communications Group PLC, held that non-consensual third-party releases included in a U.K. scheme of arrangement were enforceable under chapter 15 of the United States Bankruptcy Code.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently published a Risk Alert that highlights frequently-identified investment adviser fee and expense compliance issues from exams of over 1,500 investment adviser examinations during the past two years.
- March 2018
Chapman’s "Defaulted Securities: The Guide for Trustees and Bondholders" advances understanding and consideration of issues related to trustees and bondholders in both corporate and municipal financings.
Chapman attorney Marc Franson participated in the inaugural episode of Talking Fintech with hosts Jeremy Potter and Colin Darke.
- March 2018Journal of Taxation of Financial Products
This article describes the impact of the Tax Cuts and Jobs Act on securitization transactions. The article addresses in detail the new limitation on the deduction for business interest expense as well as the requirement that the transferee of an equity interest in a partnership engaged in a US trade or business withhold 10% of the amount realized unless the transferor certifies that it is a US person.
- April/May 2018Pratt's Journal of Bankruptcy Law
The question of what happens when a debtor files a Chapter 13 bankruptcy petition as a means of redeeming sold real estate taxes is being addressed throughout the country with more regularity. Recently, bankruptcy courts in Illinois and Georgia have provided some insight into how this question should be answered.
In light of the increasing significance of cybersecurity incidents, the SEC published a press release and additional Commission-level guidance regarding disclosure obligations relating to cybersecurity risks and incidents, which reinforces and expands upon the SEC staff guidance provided in 2011 and addresses two additional topics.
Although recent legislation commonly referred to as the Tax Cuts and Jobs Act retained Section 956 of the Internal Revenue Code (and its notorious deemed dividend issue), the enactment of other changes may reduce the impact of Section 956 on taxpayers.
The US Court of Appeals for the District of Columbia Circuit recently issued a decision in a case that involved a question of whether the risk retention requirements imposed by Section 941 of the Dodd-Frank Act required open market CLO managers to retain risk in those transactions they managed.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently released its 2018 National Exam Program Examination Priorities. Highlights from the 2018 exam priorities are reviewed in this Client Alert.
Czyzewski v. Jevic Holding Corporation made some court-watchers nervous that the decision would be applied broadly to disturb other bankruptcy-related distributions.
In a decision likely to have a far-reaching effect in the municipal debt markets, the Court overseeing Puerto Rico’s bankruptcy-like Title III proceeding ruled that holders of municipal obligations secured by a pledge of special revenues are not guaranteed payment during the pendency of a bankruptcy proceeding.
- Law360
In bankruptcy cases where a not-for-profit corporation is closely related to or controlled by a governmental unit, a creditor may challenge the not-for-profit corporation’s bankruptcy eligibility, arguing that the not-for-profit corporation is, in substance, a “governmental unit” and therefore not eligible to file a Chapter 11 petition.
- The Banking Law Journal
In July, Andrew Bailey, the CEO of the United Kingdom’s Financial Conduct Authority, announced that the FCA and the panel banks whose submissions are used to determine the London Interbank Offered Rate will only sustain LIBOR until the end of 2021.
- The Banking Law Journal
This article addresses the benefits to a senior secured lender of Representations and Warranties Insurance, and certain considerations financial institutions should make in documenting a middle market loan transaction when an acquisition financing utilizes RWI.
The beginning of each year provides an opportunity for investment advisers to review compliance and regulatory matters, including issues related to private investment funds and commodity pools, which are briefly summarized in this alert.
- Law360
On January 11, the Third Circuit issued a decision in a case that limited the reach of the Rooker-Feldman doctrine as a defense to bankruptcy avoidance actions. The court’s reasoning, however, has implications that go well beyond the particular facts of the case.
The Financial Industry Regulatory Authority, Inc. recently issued its 2018 Regulatory and Examination Priorities Letter. A number of FINRA’s comments direct firms to review the 2017 Examination Findings Report for additional insights into specific areas of concern and effective practices.
As state and local governments seek more creative financing methods for economic development projects, some have turned to the formation of subsidiary entities that can provide financing assistance, potentially without triggering debt limits under state or local laws or violating covenants under existing financings.
On December 22, 2017, President Trump signed into law the most sweeping tax law changes in the last thirty years. Highlights of the new tax reform legislation as they impact individuals are summarized in this Client Alert.
Overlooked in the many discussions about the new tax laws are the consequences on trusts and estates and the high likelihood trusts and their beneficiaries will see larger income tax bills for the next seven years. This Client Alert focuses on how the tax changes will impact trusts and estates, identify some of the significant uncertainties and provide recommendations for fiduciaries.
On December 20, Congress passed the act commonly referred to as the Tax Cuts and Jobs Act of 2017. Although no provision of the Act was designed specifically to address securitization transactions, two new sets of rules are likely to have significant effects on at least some securitization transactions
On December 15, House and Senate conferees reached an agreement on the Tax Cut and Jobs Act and released the final version of the Bill, which is expected to be voted on this week in the House and Senate.
- December 2017
Chapman partner Michael Friedman joined DebtWire’s Richard Goldman for a podcast interview.
- Fall 2017Real Estate Finance Journal
On August 11, the IRS issued Rev. Proc. 2017-45 which allows publicly offered real estate investment trusts and regulated investment companies to make stock distributions that will qualify for the dividends-paid deduction, if certain requirements are met, and therefore enable a RIC or REIT to meet its minimum annual dividend distribution tests.
An Illinois Bankruptcy Court held that a wedding or engagement ring worn by a man or woman, still married to the same person as when the ring was tendered before or during a wedding ceremony, qualifies as “necessary wearing apparel” under the Bankruptcy Code.
Both the House and Senate versions of the Tax Cuts and Jobs Act include a new provision that would impose an excise tax on the compensation paid by certain tax-exempt organizations if the compensation to a covered employee is more than $1 million.
Both the House and Senate versions of the Tax Cuts and Jobs Act include a new provision that would impose an excise tax on the compensation paid by certain exempt organizations, including certain state and local governmental entities, if the compensation to a covered employee is more than $1 million.
- Why the Assignability of Intellectual Property Licenses in Bankruptcy Might Not be Settled After AllNovember 2017American Bankruptcy Institute Law Review
In an effort to provide insight into questions about the ability to assume, or assume and assign, intellectual property licenses through the bankruptcy process, Chapman attorney Peter Bach-y-Rita co-authored a recent article in the American Bankruptcy Institute Law Review.
A debtor-in-possession is entitled to use cash collateral over the objections of PACA claimants so long as the debtor demonstrates that the interests of the PACA claimants are adequately protected, according to a recent ruling by Judge Dales of the United States Bankruptcy Court for the Western District of Michigan.
On November 2, Representative Brady released the “Tax Cuts and Jobs Act.” On November 9, the Senate Finance Committee released a “Description of the Chairman’s Mark of the ‘Tax Cuts and Jobs Act.’” This summary highlights four provisions in the proposed legislation that will be of particular interest to financial institutions.
Federal Rule of Appellate Procedure 4(a)(5) incorporates 28 U.S.C. § 2107(c), which provides for extensions of the notice of appeal deadline. However, Rule 4(a)(5)(C) limits the length of such extensions. The question then is if an appellant files a notice of appeal beyond the 30-day period set forth in Rule 4(a)(5)(C), does a circuit court lack jurisdiction to hear the appeal?
In addition to changes in life, changes in the estate tax rules over the last decade have altered the planning options available for many married couples. If the federal estate tax laws are actually repealed by the current Congress, these options will be relevant for all married couples.
Legislation recently passed by the Illinois House could impact every taxing district in the State if it ultimately becomes law. Senate Bill 851, which amends the Property Tax Extension Limitation Law, implements a tax freeze for certain taxing districts, and authorizes the implementation of a tax freeze for other taxing districts pursuant to referendum.
On November 2, Representative Brady released the proposed text of the long-awaited federal income tax reform bill. The bill also includes a provision that appears aimed at subjecting public pension plans to unrelated business taxable income.
On November 2, Representative Kevin Brady released the proposed text of the long-awaited federal income tax reform bill. The bill also includes a provision that creates a limit on the deductibility of interest. If enacted, this provision could have potentially wide-reaching impacts on securitization transactions.
On November 2, Representative Brady released the proposed text of the long-awaited federal income tax reform bill. If enacted into law, the bill would eliminate all tax-exempt private activity bonds, tax credit bonds and all tax-exempt advance refunding bonds.
The staff of the Securities and Exchange Commission issued three no-action letters designed to assist broker‑dealers and investment advisers in addressing issues related to European Union directives and related legislation that will become effective on January 3, 2018.
The U.S. Court of Appeals for the Second Circuit reversed both the district court and the bankruptcy court’s decisions in MPM Silicones, LLC, which had held that the “prime plus” formula was the appropriate method for determining the interest rate required in connection with new notes issued to secured creditors under a Chapter 11 cramdown plan of reorganization.
The United States Court of Appeals for the Second Circuit has affirmed the district court and the bankruptcy court’s determinations in MPM Silicones, LLC that Momentive’s senior noteholders are not entitled to recover any make-whole premium on account of the replacement of their notes.
- October 2017
In a video by The Law Lab, Chapman attorney Eric Wood presents at the 2017 Chicago-Kent Fin(Legal)Tech Conference.
The United States Treasury Department has withdrawn proposed regulations dealing with the definition of “political subdivisions” for purposes of the tax-exempt bond provisions of the federal tax law. Political subdivisions are divisions of state or local governmental units that can issue federally tax-exempt bonds.
- October 2017Estate Planning Course Materials Journal
In an environment of growing global mobility of many families and heightened regulatory and compliance pressures, many U.S. estate planning advisors are encountering international issues for their clients with increasing frequency.
- October 19, 2017 (Originally Published October 4, 2017)
On September 21, a Bankruptcy Court ruled that holders of notes issued pursuant to a Note Purchase Agreement entered into by a debtor’s operating subsidiary were entitled to what the court termed an ‘enormous’ make-whole payment, post-petition interest, and recovery of related fees and expenses.
On October 3, the U.S. Bankruptcy Court for the District of Delaware granted a motion to reconsider a decision it made over a year ago in the bankruptcy of Energy Future Holdings Corp. and its co-debtors and in doing so disallowed a $275 million breakup fee to a prospective asset purchaser that it had previously approved.
- Law360
On October 3, 2017, the U.S. Bankruptcy Court for the District of Delaware granted a motion to reconsider a decision it made over a year ago in the bankruptcy of Energy Future Holdings Corp. and its co-debtors and in doing so disallowed a $275 million breakup fee to a prospective asset purchaser that it had previously approved.
A health care management services organization provides non‑clinical, administrative support services to physician group practices and other health care providers. One of the primary purposes of a MSO is to relieve licensed health care providers of non-medical business functions so they can focus on the clinical aspects of their medical practices.
In September, the IRS released proposed regulations that would not only change the types of instruments that are registration-required obligations, but also clarify when a registration-required obligation meets the requirements to be treated as issued in registered form.
- October 5, 2017 (Originally Published September 14, 2017)Westlaw Journal Bankruptcy
Following a recent decision by the Court overseeing the Commonwealth of Puerto Rico’s bankruptcy-like Title III proceeding, bondholders should continue to pay close attention to the pledge securing their bonds to determine how those bonds would be treated in a bankruptcy proceeding.
The recently released “Unified Framework for Fixing Our Broken Tax Code” includes a proposed limitation on the deductibility of interest expense by corporations. Although this framework does not provide details as to the nature or scope of the proposed limitations, any such limitations will potentially affect the balance in preferences between debt and equity funding.
- Q3 2017 (Originally Published May 4, 2017)Journal of Investment Compliance
The Financial Industry Regulatory Authority, Inc. released additional guidance on social media and digital communications in Regulatory Notice 17-18. The guidance from FINRA is summarized in this article.
- October 2017 (Originally Published July 25, 2017)Pratt's Journal of Bankruptcy Law
While many of lender's rights are self-explanatory, a question has arisen as to what it means to amend “pro rata” sharing requirements. Recently, an amendment to NYDJ Apparel, LLC’s credit agreement highlighted what a loan investor needs to look out for when reviewing protections related to pro rata sharing.
- October 2017 (Originally Published July 27, 2017)Pratt's Journal of Bankruptcy Law
On July 6, 2017, the Basel Committee on Banking Supervision issued two consultative documents entitled “Criteria for Identifying Simple, Transparent and Comparable Short-Term Securitisations” and “Capital Treatment for Simple, Transparent and Comparable Short-Term Securitisations.”
The Municipal Securities Rulemaking Board recently issued a market advisory to increase awareness among market participants, including issuers and obligated persons, of the importance of disclosing material information fairly, equitably and in the public domain.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently published a Risk Alert that highlights frequently identified investment adviser advertising compliance issues. The Risk Alert identifies the advertising compliance issues most frequently identified in deficiency letters from investment adviser examinations.
- August 2017
Chapman Partner David Cholst chaired and Partner Sarah Breitmeyer served on a National Association of Bond Lawyers task force that produced proposals to improve US infrastructure through tax reform.
- September 2017 (Originally Published May 10, 2017)Pratt's Journal of Bankruptcy Law
Intercreditor agreements are commonly used to define the relative rights of senior and junior lenders, especially should the borrower become distressed or file bankruptcy. Properly defining priorities between lenders is particularly important when both parties possess security interests in the same collateral.
- September 2017 (Originally Published June 25, 2017)Pratt's Journal of Bankruptcy Law
Many equipment lessors are watching yesterday’s prime customers transform into tomorrow’s distressed credits. This article addresses some of the key considerations for lessors in formulating a plan to deal with distressed or likely-to-be-distressed lessees, both prior to and during a potential bankruptcy proceeding.
The Department of Labor published its proposal to delay for 18‑months the more onerous provisions of the exemptions that were issued in connection with the DOL’s fiduciary rule. The exemptions were supposed to be fully effective January 1, 2018. Instead, the DOL has proposed that they become fully effective July 1, 2019.
- August 2017
Keeping track of the regulatory developments affecting asset-backed commercial paper (“ABCP”) conduits and their sponsors is a daunting task. This updated desk reference reviews regulatory and legislative developments affecting the ABCP market.
On August 23, the Securities and Exchange Commission announced settlements in enforcement actions against the Beaumont Financing Authority; Alan Kapanicas, the former executive director of BFA; O’Connor & Company Securities Inc., the underwriter of the BFA obligations; and Anthony Wetherbee, the co-founder and former primary investment banker of O’Connor Securities.
- Law360
On August 3, 2017, the Delaware district court upheld the Delaware bankruptcy court’s confirmation of a so-called “gift” plan (i.e., a plan in which a secured creditor class “gifts” a portion of its plan distribution to a junior class).
On August 3, the Delaware district court in In re Nuverra Environmental Solutions, Inc. upheld the Delaware bankruptcy court’s confirmation of a so-called “gift” plan, notwithstanding the recent Supreme Court decision in Czyzewski v. Jevic Holding Corp. that had cast doubt on the viability of such plans.
Compliance with the Telephone Consumer Protection Act has never been simple, and a number of conflicting and confusing rulings over the last several years have made it that much more difficult. The TCPA contains a confusing array of regulations depending on what kind of phone is being called, who is calling and what purpose the call serves, and whether the person being called has given permission.
The Delaware Court of Chancery recently found that restrictions on the transfer of stock that were not noted on the certificates representing such stock were unenforceable against a stockholder that did not have knowledge of the restrictions at the time the stock was issued.
Chapman represented the solicitation agent and lead underwriter in a public-private partnership to finance the extension of the I-95 Express Lanes project.
The Department of Labor recently issued another set of FAQs, focusing on advisors to 401(k) plans. The FAQs generally address two issues.
In a court filing on August 9, the Department of Labor notified the court that it recently submitted proposed amendments to the three exemptions to its fiduciary rule to the Office of Management and Budget.
- July 2017National Association of Bond Lawyers
This paper, published by the National Association of Bond Lawyers, identifies various issues that arise in connection with the structuring and negotiation of direct purchase transactions, and explores some of the more commonly encountered provisions present in direct purchase documents.
- July 2017
Chapman represented US Solar in a project financing to support the development of a 100+ MW portfolio of solar assets.
- Q2 2017 (Originally Published February 24, 2017)Journal of Investment Compliance
In February 2017, the staff of the Securities and Exchange Commission’s Division of Investment Management issued guidance providing additional clarity on Rule 206(4)-2 under the Investment Advisers Act of 1940.
The former Director of Finance for Ramapo, New York, was found guilty by a federal jury of 20 counts of conspiracy, securities fraud and wire fraud in connection with municipal bonds issued by the Town and by the Ramapo Local Development Corporation, a local not-for-profit corporation to further economic development in the Town.
Effective May 14, 2018, amendments to Municipal Securities Rulemaking Board Rule G-15 and Financial Industry Regulatory Authority Rule 2232 will subject firms to new transaction-related disclosure requirements to retail investors for certain fixed income securities.
More than a year after the Consumer Finance Protection Bureau submitted a proposed rule to limit consumer financial services contract arbitration clauses, the CFPB sounded the death knell on July 10, 2017, when it released its long-awaited final rule.
- July 2017
Chapman Partner Nick Whitney joined Xtract Research’s senior covenant analyst Vince Pisano for the inaugural recording of the new Xtract Research podcast series.
On June 12, the Department of Treasury issued the first report in a series regarding regulation of the financial system. The report recommends that high-grade municipal bonds be categorized as Level 2B liquid assets instead of generally being excluded as HQLA currently.
On June 12, the Department of Treasury issued the first report in a series regarding regulation of the financial system in a manner consistent with Core Principles set forth in Executive Order 13772 signed by President Trump on February 3, 2017.
In a unanimous decision on June 12, the United States Supreme Court held that a purchaser of defaulted debt who pursues repayment is not a “debt collector” under the Fair Debt Collection Practices Act.
This update includes:
- Congress Returns from Recess to Tackle Health Care Reform; Obamacare Marketplace Insurer Participation Deadline Looms
- Hospitalist Group Pays $4.2 Million to Settle Upcoding Allegations
- $155 Million Settlement Demonstrates That Failure to Comply with Meaningful Use Certification Requirements May Expose IT Vendors to FCA “False Certification” Liability
The Securities and Exchange Commission announced that it is requesting comments from retail investors and other interested parties on the standards of conduct applicable for broker-dealers and investment advisers.
This update includes:
- CBO Releases Score of House’s American Health Care Act
- United States Files Second False Claims Act Complaint against UnitedHealth This Month
- Missouri Hospital and Clinic to Pay $34 Million to Settle Allegations That Compensation Paid to Oncologists Violated the Stark Law
Labor Secretary Alexander Acosta confirmed in an Op-Ed in the Wall Street Journal that the Department of Labor fiduciary rule will become applicable on June 9. Along with the Op-Ed, the DOL issued new Conflict of Interest FAQs related to the June 9, 2017 to January 1, 2018 transition period and Field Assistance Bulletin No. 2017-2.
In a recent case, the Sixth Circuit held that under Michigan law a properly perfected assignment of rents bars a debtor from using the rents to fund its operations in a Chapter 11 reorganization.
The Supreme Court continues to redefine the scope of the Fair Debt Collection Practices Act, with one highly anticipated ruling issued this week and another expected before the Court adjourns for the summer in late June.
On December 7, 2016, Public Act 99-0906 was enacted into law, with an effective date of June 1, 2017. The Act calls for updates to Illinois’ Renewable Portfolio Standard, net metering, and energy efficiency standards, as well as a new zero emissions credits plan.
The American Bar Association’s Section of Taxation submitted a white paper on the history of the tax-exemption of interest on state and local bonds to the Internal Revenue Service.
- May 2017The Banking Law Journal
The May 2015 decision of the U.S. Court of Appeals for the Second Circuit in Madden v. Midland Funding, LLC sent shockwaves through the marketplace lending industry, and nearly two years later the questions generated by this case remain largely unanswered. These questions have been further complicated by the long-awaited remand decision from the U.S. District Court for the Southern District of New York.
- May 2017 (Originally Published March 8, 2017)The Banking Law Journal
This article discusses a financial institution’s obligation to manage risks of its HELOC Home Equity Line of Credit portfolio, focusing on the applicable regulatory requirements and restrictions on the ability to freeze or reduce HELOCs during the draw period.
- May 2017Pratt's Energy Law Report / LexisNexis Emerging Issues Analysis
The Future Energy Jobs Bill was enacted into law on December 7, 2016, as Public Act 99-0906, with an effective date of June 1, 2017. The Act calls for updates to Illinois’ renewable portfolio standards, net metering, and energy efficiency standards, as well as a new zero emissions credits plan.
11 U.S.C. § 1111(b)(1)(A) provides that a creditor holding a non-recourse lien on real property possesses a claim against a debtor’s bankruptcy estate upon the filing of the bankruptcy petition. But what happens to the secured creditor’s non-recourse claim when the property securing the loan has been sold via foreclosure?
This update includes:
- American Health Care Act Passes House, but May Be Stalled in the Senate
- Three HIPAA Corrective Actions Announced in April; First Settlement with Wireless Health Services Provider Costs $2.5 Million
- Blood Testing Laboratory to Pay $6 Million to Settle Allegations of Kickbacks and Unnecessary Testing
The Financial Industry Regulatory Authority, Inc. recently released additional guidance on social media and digital communications. FINRA previously issued guidance on the use of social media communications in Regulatory Notice 10-06 and Regulatory Notice 11-39.
The Uniform Commercial Code affects financial institutions in countless ways. From duties of care for customers to the banks’ inspection of checks, familiarity with the UCC is critical when examining legal disputes. This alert discusses recent developments in UCC law that provide insight into how courts examine these rules and financial institutions’ responsibilities under the UCC.
On May 1, Tax Notes published a flurry of revocations of private letter rulings that had been issued to regulated investment companies. In each of the revocations, at least one of the rulings requested in the original private letter ruling was that the income from a commodity linked note was qualified income for the purposes of Internal Revenue Code § 851.
On April 19, the House Financial Services Committee posted a “discussion draft” of a revised version of the CHOICE Act. The discussion draft contains most of the provisions in last year’s bill with a number of important changes.
The Municipal Securities Rulemaking Board recently withdrew a proposed rule from consideration by the Securities and Exchange Commission. The rule would have prohibited a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the minimum denomination of the issue stated in offering documents.
- April 2017
This white paper addresses pay for success legislation that has been adopted at the state level, pointing out the various functions of the pay for success financing structure and how individual states have treated these components within their legislation.
The Financial Industry Regulatory Authority, Inc. recently released three Regulatory Notices related to its ongoing review of its members’ involvement in the capital formation process.
The Financial Industry Regulatory Authority, Inc. recently requested comments on proposed amendments to FINRA Rule 2241 (on equity research) and FINRA Rule 2242 (on debt research) that would create a safe harbor for trading desk commentary distributed to eligible institutional investors subject certain conditions.
2016 was a record year for filings under the Telephone Consumer Protection Act of 1991. In 2016, litigants filed 4,860 TCPA lawsuits, an increase of nearly 32% from 2015. But what does 2017 hold? What can companies who call customers to service or collect debts expect?
This update includes:
- As Genetic Testing Booms and Fraud and Abuse Scrutiny Increases, Providers Need to Keep Medical Necessity in Mind
- House Republican Leaders Attempt to Revive the American Health Care Act with Risk-Sharing Fund Amendment
- Failure to Conduct a HIPAA Security Risk Assessment Results in Fine and Corrective Action Plan for Federally Qualified Health Center
- Law360
On March 27, the U.S. Supreme Court granted certiorari in the case of In re the Village at Lakeridge LLC, under which an appeals court held that a claim of an “insider,” which is not counted for the purpose of creating an accepting impaired class for the purpose of “cramming down” a plan of reorganization over the opposition of a rejecting class, does not retain its status as a claim of an insider for that purpose once transferred to a noninsider third party.
Yesterday the Department of Labor released the final rule delaying the applicability of the DOL fiduciary rule and the related prohibited transaction exemptions to June 9, 2017. The rule was originally set to become applicable on April 10, 2017.
This update includes:
- Amid Deep Program Cuts, President’s Budget Blueprint Increases Health Care Fraud and Abuse Enforcement Spending by 10 Percent
- CMS Rolls Out New Stark Law Self-Disclosure Form
- Kansas Governor Vetoes Medicaid Expansion; Legislature Fails to Override
- Law360
Since the U.S. Supreme Court’s 2010 decision in Citizens United, which effectively invalidated restrictions on certain corporate political contributions, various shareholder activists and corporate governance advocates have increasingly sought corporate disclosure of such contributions.
The Tax Exempt and Government Entities Division of the Internal Revenue Service announced changes to the information document request process in tax-exempt bond and tax-advantaged bond examinations.
This update includes:
- Favorable OIG Advisory Opinion Provides Helpful Roadmap in Structuring a Patient Lodging/Meals Assistance Program that Complies With Federal Law
- Kansas Votes to Expand Medicaid, Embracing a Key Measure of the Affordable Care Act; Veto Possible
- With AHCA Withdrawn, What’s Next for Health Care Reform?
- March 2017
Since the U.S. Supreme Court’s 2010 decision in Citizens United, which effectively invalidated restrictions on certain corporate political contributions, various shareholder activists and corporate governance advocates have increasingly sought corporate disclosure of such contributions.
On March 1, the Securities and Exchange Commission issued a release seeking comments on proposed amendments to Rule 15c2-12 under the Securities Exchange Act of 1934, as amended.
This update includes:
- American Health Care Act Moves Through House Committees; Floor Vote Scheduled for Thursday
- Large FCA Judgment Against Nursing Home Operators Could Trigger Cross-Default Provisions of Loan Providing Operating Capital to 183 Non-Defendant Co-Obligors
- HIPAA Settlement Underscores Importance of Audit Controls and Timely Mitigation of Issues Identified in Security Risk Assessments
- OIG Reports that State Medicaid Fraud Control Units Recovered $1.9 Billion in FY 2016
On March 13, the Congressional Budget Office released its highly anticipated score of the American Health Care Act, the Republican-proposed replacement bill for the Affordable Care Act.
- March 2017ACIC Private Notes / Harvard Law School Bankruptcy Roundtable
Before purchasing any debt, distressed investors need to be mindful of what unrestricted subsidiaries are and how they may impact the overall credit of a company or debt recoveries.
- March 2017
Chapman Partner Michael Friedman recently discussed the U.S. corporate loan market at the Tel Aviv Institutional Investment Conference.
This update includes:
- Five Things to Know as the American Health Care Act Moves Through the House
- Hospital Associations and American Medical Association Oppose ACA Replacement Bill
- March 2017
Chapman Partner Marc Franson participated in a panel discussion, entitled "True Lender and Madden Case: Impact on the Industry Two Years In," at the 2017 LendIt USA Conference.
In a stark reminder to the bankruptcy community of the old adage that “you can run but you can’t hide,” the U.S. Bankruptcy Court for the Southern District of New York recently denied an Austrian bank’s motion to dismiss for lack of personal jurisdiction.
The Department of Labor announced a proposed 60-day delay of the applicability date of the DOL fiduciary rule and related exemptions. The DOL has allowed a 15-day comment period providing all interested parties an opportunity to comment on the proposed delay.
On February 27, the U.S. District Court for the Southern District of New York issued its long-awaited remand decision in Madden v. Midland Funding, LLC.
The staff of the Securities and Exchange Commission’s Division of Investment Management recently issued new guidance providing additional clarity on Rule 206(4)-2 under the Investment Advisers Act of 1940.
The staff of the Securities and Exchange Commission’s Division of Investment Management recently released guidance on disclosure, suitability and compliance obligations for automated advisers—often referred to as “robo-advisers.”
This update includes:
- Oncology Practice, Practice Manager and Physician Pay $1.7 Million to Resolve Allegations of Billing Medicare for Unapproved Chemotherapy Drugs
- Federal Regulators Issue Proposed Rule Aimed at Stabilizing Insurance Marketplaces as ACA is Debated; Trump’s “One In, Two Out” Executive Order Determined Inapplicable
- House Republicans and Trump Administration File Joint Motion to Indefinitely Delay Resolution of Lawsuit with Potential to Dismantle ACA Insurance Exchanges
The U.S. Court of Appeals for the D.C. Circuit made headlines following its decision in the PHH Corporation et al. v. Consumer Financial Protection Bureau case. The Court found that the CFPB’s single-director, removable-only-for-cause structure was unconstitutional. However, the Court has now vacated that order in its entirety and set the case to be heard again en banc.
On February 14, two federal lawsuits were filed in Illinois challenging the legality of the Zero Emissions Credits program provided for under Illinois’ recently passed Future Energy Jobs Act (Public Act 99-0906).
The Financial Industry Regulatory Authority, Inc. announced the effective date of amendments to FINRA Rule 2232 requiring firms to disclose additional transaction-related information for certain fixed income securities principal transactions with retail customers.
The Municipal Securities Rulemaking Board is requesting comments on proposed amendments to its advertising rule for brokers, dealers, and municipal securities dealers and a new advertising rule for municipal advisors.
The Financial Industry Regulatory Authority, Inc. recently proposed amendments that would create a new exception to FINRA’s prohibition on projecting performance. The proposed exception to FINRA Rule 2210 would permit a firm to distribute a customized hypothetical investment planning illustration.
- Law360
Investments in “unrestricted subsidiaries” are an exception to investment covenants, which have been used in an attempt to provide flexibility in restructuring a company’s capital structure.
The Supplemental Examination Procedures for Risk Management of Third-Party Relationships issued by the Office of the Comptroller of the Currency on January 24 establish detailed compliance obligations for relationships with third-party service providers.
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- Office of Budget Management Withdraws Proposed Omnibus Guidance for 340B Drug Pricing Program
- Failure to Respond Timely to HIPAA Notice of Proposed Determination Results in $3.2 Million Penalty
- Anthem-Cigna Merger Blocked by Federal Judge
- Joint Commission Clarifies That It Prohibits Secure Texting for Patient Orders
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently published a Risk Alert listing five compliance topics most frequently identified in deficiency letters to investment advisers following exams.
The Securities and Exchange Commission is seeking comments on proposed new Municipal Securities Rulemaking Board Rule G-49 prohibiting a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the minimum denomination of the issue stated in offering documents.
- Law360
Lenders and investors in companies often have assumed that claims related to the purchase and sale of securities are subordinated to the level of the underlying security in question. However, a recent decision has raised a serious question as to when claims for damages should be deemed “arising from” the purchase or sale of a security.
- February 2017Getting Governance Right: A Handbook for Today's CEOs and the Board of Directors (e-Book)
“Board refreshment” is currently a hot corporate governance topic. A board of directors’ ability to “refresh” itself on a regular basis can help ensure that the board is comprised of the proper mix of directors to meet both current and long‑term needs of the board, the company and shareholders, and provide the necessary oversight of the company’s evolving corporate strategy and risks.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- Mortgage Servicing Foreclosure Practices
- OCC Semiannual Risk Perspective
- February/March 2017Pratt's Journal of Bankruptcy Law
With Republicans retaining control of both chambers of Congress and Donald Trump elected President, the prospects for financial regulatory reform have changed. Many observers point to the Financial CHOICE Act as the best indication of Republican Congressional aspirations for such reform.
Lenders and investors in companies often have assumed that claims related to the purchase and sale of securities are subordinated to the level of the underlying security in question. However, a recent decision has raised a serious question as to when claims for damages should be deemed “arising from” the purchase or sale of a security.
President Trump issued a memorandum directing the Department of Labor to conduct an analysis of the fiduciary rule’s potential impact. Depending on the results of its examination, the memorandum instructs the DOL to publish for notice and comment a proposed rule to rescind or revise the rule.
- January 2017Insights: The Corporate & Securities Law Advisor
This update provides general information regarding say-on-pay frequency, summarizes the current say-on-pay frequency policies and positions of several large asset managers and pension funds, leading proxy advisory firms and certain corporate governance advocates, and presents practical considerations for boards to help facilitate discussion.
The Department of Labor released on January 13 two sets of frequently asked questions to provide additional guidance on its new fiduciary rule. One set of FAQs is directed at consumers to better help them understand the Rule. The other set of FAQs is directed at financial service providers to address the regulation defining “investment advice.”
This updated includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- $2.2 Million HIPAA Settlement Demonstrates Importance of Conducting Required HIPAA Security Risk Assessments and Implementing ePHI Safeguards
- CBO Releases Report on How Repealing Portions of the ACA Would Affect Health Insurance Coverage and Premiums
In a decision that deals a potential blow to holdout noteholders in out-of-court restructurings, the United States Court of Appeals for the Second Circuit adopted a narrow interpretation of Section 316(b) of the Trust Indenture Act.
In one of his first Presidential acts, President Trump has named Commissioner Ajit Pai as Chairman of the Federal Communications Commission. Chairman Pai has become well-known for his dissenting opinions during his time with the FCC, including his dissent to the most recent Telephone Consumer Protection Act Omnibus Ruling and Order issued in July 2015.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently released its Examinations Priorities for 2017.
The municipal industry has seen a significant change in recent years with the increased activity of the SEC Enforcement Division and, in particular, its Public Finance Abuse Unit. This is an updated version of an article Chapman attorney Kelly Kost authored for the October 2016 issue of the Illinois GFOA Newsletter.
On January 17, 2017, the Internal Revenue Service released new safe harbor guidelines for determining whether a management contract results in private business use of property for purposes of the federal income tax rules relating to tax-exempt bonds.
On January 10, 2017, the Securities and Exchange Commission (SEC) issued a cease-and-desist order (Order) to the Port Authority of New York and New Jersey (Port Authority) under which the Port Authority acknowledged that it acted negligently in failing to disclose certain risks in official statements for over $2.3 billion of bonds issued between January 2012 and June 2014.
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- New Rule Imposes Civil Monetary Penalties on Drug Manufacturers That Overcharge Safety Net Providers for 340B Outpatient Drugs
- Senate Takes Step Towards Dismantling Affordable Care Act
The beginning of each year provides an opportunity for investment advisers to review annual compliance and regulatory matters, including issues related to private investment funds and commodity pools. This alert briefly summarizes some of the primary issues that advisers might consider in their 2017 annual review and update processes.
The Financial Industry Regulatory Authority, Inc. recently issued its annual Regulatory Examination Priorities Letter. This alert summarizes some of the more significant issues FINRA’s letter raises.
- November/December 2016Illinois Banker
Considering the flurry of activity in the fintech arena, is there a place for banks and, if so, what role can banks play? Given that marketplace lending is the most developed form of fintech today, it can be analyzed to see how banks do play important roles and employ different strategies dealing with this emerging market segment.
The New York Court of Appeals issued a decision holding that when two parties agree to the material terms of a sale, the parties have entered into a binding agreement, even though the sale remains subject to the execution of a written sales agreement.
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- Food and Drug Administration Delays Off-Label Promotion Guidance
- 21st Century Cures Act Signed into Law
The staff of the Securities and Exchange Commission’s Division of Investment Management has released guidance focused on disclosure issues and certain procedural requirements associated with mutual funds implementing intermediary‑specific variations to sales loads and adding new share classes.
- December 2016
Salt Lake County, Utah launched two Pay for Success programs that seek to reduce chronic homelessness and recidivism among at-risk populations.
The Municipal Securities Rulemaking Board recently published guidance on broker-dealer obligations when executing transactions involving a registered investment adviser that is authorized to exercise full discretion to buy and sell municipal securities on behalf on an account holder.
In a December 13 interview, the chief of Securities and Exchange Commission’s public finance abuse unit stated that the SEC does not expect to recommend any further settlements under its Municipalities Continuing Disclosure Cooperation initiative. Instead, the public finance abuse unit will focus on those issuers and underwriters that did not self-report disclosure violations under the initiative.
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- OIG Issues Long-Awaited Final Rule with Revisions to the Anti-Kickback Statute and Civil Monetary Penalty Rules Regarding Beneficiary Inducements
- Despite Industry Pushback, FDA Finalizes Policy Regarding Public Notification of “Emerging” Medical Device Safety Issues
- Legal, Operations, and Strategy Briefs for Financial Institutions
On Friday, Comptroller of the Currency Thomas Curry announced that the Office of the Comptroller of the Currency will issue limited-purpose bank charters to qualified fintech companies.
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- CMS Releases National Health Expenditure Data for 2015
- UMass Settles Potential HIPAA Violations Following Malware Infection
- Highlights of the OIG Semi-Annual Report to Congress
- December 2, 2016
Chapman is representing a consortium of social service agencies in the State of Illinois' first pay for success initiative, which seeks to improve the lives of youth who are dually-involved in both the child welfare and juvenile justice systems.
The Municipal Securities Rulemaking Board recently issued an interpretive notice announcing its interpretation that if a dealer engages in a transaction with a customer in a municipal security that bears market discount, the dealer must disclose the existence of market discount to its customer as part of the “time of trade disclosure” required under MSRB Rule G-47.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- Deposit Insurance Determination Rule
- FFIEC Revises Its Consumer Compliance Rating System
- Servicemembers
On November 22, Judge Mazzant III issued a preliminary injunction halting the Department of Labor's impending overtime rule from going into effect nationwide. The rule would raise the salary basis threshold for “white collar” overtime exemptions from $455 per week ($23,660 annually) to $921 per week ($47,892 annually).
The Securities and Exchange Commission recently approved Financial Industry Regulatory Authority, Inc. and Municipal Securities Rulemaking Board rule amendments requiring broker-dealers to disclose trade compensation for certain fixed income securities principal transactions with retail customers.
- Law360
In a break from recent decisions, on November 17, the Third Circuit Court of Appeals reversed the District Court’s decision in the Energy Future case, finding that make-whole premiums were in fact payable upon a “redemption” even if such redemption occurred after a bankruptcy filing and the automatic acceleration of the underlying debt where the applicable indentures did not otherwise provide.
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- House Republicans Urge Federal Agencies to Cease Rulemaking until President-Elect Trump Takes Office
- OIG Releases Its Fiscal Year 2017 Work Plan
This update includes:
- Full Repeal of Affordable Care Act Unlikely
- CMS Hosting a MACRA Quality Payment Program Informational Call Tomorrow
- Jury Convicts Home Health Agency Owner in $13 Million Medicare Fraud Conspiracy
This update includes:
- Medical Device Manufacturer Pleads Guilty to Misbranding and Agrees to Pay $36 Million to Resolve Criminal Liability and False Claims Act Allegations
- Federal District Court Blocks CMS Rule Banning Pre-Dispute Binding Arbitration Clauses
- CMS Releases CY 2017 Final Rule Implementing Changes to Medicare Outpatient Prospective Payment System
- Fewer Hospitals to Receive Value-Based Purchasing Program Bonuses in 2017
The Financial Industry Regulatory Authority, Inc. recently filed proposed rule changes with the Securities and Exchange Commission to amend FINRA Rule 4512 and adopt FINRA Rule 2165.
The Securities and Exchange Commission recently approved proposed rule changes by the Financial Industry Regulatory Authority, Inc. that would revise certain filing requirements of FINRA Rules 2210, 2213 and 2214.
- November/December 2016 (Originally Published August 31, 2016)Pratt's Journal of Bankruptcy Law
A recent bankruptcy court decision in the Aéropostale bankruptcy case pending in the bankruptcy court for the Southern District of New York may provide some comfort to secured creditors seeking to credit bid in a sale process commenced by a debtor pursuant to Section 363 of the U.S. Bankruptcy Code.
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- First Circuit Rules That HHS Had Right to Recoup Disproportionate Share Overpayments Payments from Maine Hospitals
- Vermont’s All Payer ACO Approved by CMS to Begin in January 2017
The Municipal Securities Rulemaking Board recently issued a notice seeking guidance on its strategic priorities for 2017. The MSRB’s notice seeks comment on potential areas where the MSRB should focus its strategic goals and how it should prioritize its core activities.
On October 27, the Department of Labor issued its first wave of FAQs to address certain questions that have arisen with respect to the DOL’s previously issued fiduciary rule. Generally, the Rule broadly defines who is a fiduciary under the Employee Retirement Income Security Act and the Internal Revenue Code.
The second edition of Chapman's book is a valuable resource for municipal debt marketplace participants, including state and local government officials, municipal credit analysts, credit enhancers, investors, legislators, and administrators.
The Financial Industry Regulatory Authority announced that it is conducting a sweep examination on broker-dealer firms to look into incentives and business practices that may encourage employees to engage in inappropriate cross-selling activities.
This update includes:
- Obamacare Enrollment Predicted to Increase by 9% in 2017 Open Enrollment
- Skilled Nursing Facility Provider to Pay $145 Million to Resolve False Claims Act Allegations
- Dignity Health and Catholic Health Initiatives in Alignment Talks
- Law360
Earlier this month, the Sixth Circuit provided to creditors of municipalities emerging from bankruptcy proceedings additional assurance that they can rely on the bankruptcy plan approved by a court.
The U.S. Court of Appeals for the D.C. Circuit heard oral argument yesterday in a consolidated case arguing that the Federal Communication Commission has overstepped its bounds in its most recent interpretation of the Telephone Consumer Protection Act.
On October 11, the U.S. Court of Appeals for the D.C. Circuit issued an important decision involving the Consumer Financial Protection Bureau. Not only did the Court find that the agency’s structure was unconstitutional, it also ruled that the CFPB violated due process, and is subject to the statutes of limitations embodied in the laws it seeks to enforce.
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- Transition to Value-Based Reimbursement Continues as CMS Releases MACRA Final Rule
- HHS Publishes Guidance on HIPAA and Cloud Computing
The Securities and Exchange Commission voted last Thursday to adopt changes to enhance liquidity risk management by open-end funds, including mutual funds and exchange-traded funds.
Last week, the IRS contemporaneously released two pieces of guidance related to the question of whether qualifying regulated investment company income could include indirect commodities income through controlled foreign corporations or derivative exposure to commodities.
Last week, the U.S. Sixth Circuit Court of Appeals provided to creditors of municipalities emerging from bankruptcy proceedings additional assurance that they can rely on the bankruptcy plan approved by the court.
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- Vermont Granted Tentative Approval for All Payer Reimbursement System
- CMS Issues Final Rule for Long-Term Care Facilities
- MedPAC Unsatisfied with Savings Generated by Medicare Shared Saving Program ACOs
The Illinois Constitution is clear that the right to a trial by jury “shall remain inviolate” — but does a state law limiting the number of individuals required to serve on a jury interfere with this fundamental right?
This update includes:
- Weekly Health Care Criminal and Civil Fraud Enforcement Round-Up
- GAO Report Highlights Electronic Health Record Vulnerability to Cyber Threats and Recommends HHS Update and Strengthen its HIPAA Guidance and Oversight
- CMS Seeking Comments by October 11, 2016 Regarding Updates to the Voluntary Self-Referral Disclosure Protocol
- September 2016Insights: The Corporate & Securities Law Advisor
Corporate boards increasingly are considering whether it is in the best interests of the board, the company and its shareholders to establish a separate risk committee. Investors, proxy advisory firms and other corporate governance advocates also have developed expectations with respect to board risk oversight responsibilities.
- Q3 2016 (Originally Published April 14, 2016)Journal of Investment Compliance
On April 4, the Municipal Securities Rulemaking Board and the Financial Industry Regulatory Authority issued a joint regulatory notice reminding firms they regulate of their obligation to determine whether state and local government obligations acquired through direct purchase or “bank loan” transactions constitute municipal securities for federal securities law purposes.
- Q3 2016 (Originally Published March 2, 2016)Journal of Investment Compliance
The Municipal Securities Rulemaking Board recently published its 2016 Compliance Advisory for Brokers, Dealers and Municipal Securities Dealers. The Compliance Advisory outlines several MSRB rules that the MSRB believes present key compliance risks for brokers, dealers and municipal securities dealers.
After several years of securities industry efforts, the Securities and Exchange Commission has formally proposed a rule change that would shorten the standard settlement cycle for most broker-dealer securities transactions from three business days after the trade date to two business days after the trade date.
Today, many shareholders may feel that the traditional investor communication and relations model is not adequate. Often, written communications are viewed as impersonal and outdated and shareholder meetings typically occur only annually and are rarely seen as leading to meaningful dialogue.
Municipal Securities Rulemaking Board Rule G-15(f) prohibits a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the minimum denomination of the issue stated in offering documents, subject to two current exceptions.
- Law360
Despite the Supreme Court cautioning that the “reasonably equivalent value” principle would in most cases remain similar to a market-value definition, and refusing to force its holding on other forced-sale proceedings, on Sept. 8, 2016, the Ninth Circuit became the third federal appeals court to extend BFP’s holding to real estate tax sales.
This update includes:
- Potential Penalties for False Claims Act Violations Continue to Rise
- Medicaid Fraud Control Unit FY 2015 Annual Report Highlights Criminal and Civil Fraud Recoveries; Civil Settlements, Judgments and Recovery Amounts Have Decreased
- OIG Data Brief Indicating Escalating Medicare Billings for Home Respiratory Ventilators May Result in Targeted Program Integrity Efforts
- Comment Period for New Bundled Payment Models Closing October 3rd
- September 2016ACIC Private Notes
The services agreements under which midstream oil and gas companies operate are routinely structured as long-term contracts requiring a large initial expenditure. In these cases, the midstream service providers’ investment is only recouped over the life of the agreement, and early termination or rejection of such agreements can be devastating.
On September 20, 2016, 21 states filed a suit to block the Department of Labor’s rule for “white collar” overtime exemptions from going into effect. The four‑count complaint pending in the Eastern District of Texas seeks a declaratory judgment that would prohibit the rule from going into effect, or at least prohibit the rule from applying to the states.
- Illinois GFOA Newsletter
The Municipal Continuing Disclosure Cooperation initiative, as named by the Securities and Exchange Commission in March, 2014, has attracted much attention in the municipal industry and with good reason.
On September 8, 2016, the Ninth Circuit held in In re Tracht Gut, LLC v. L.A. Cnty. Treasurer & Tax Collector that California real estate tax sales are for reasonably equivalent value and cannot be set aside as fraudulent transfers.
The Securities and Exchange Commission is seeking comments on proposed Municipal Securities Rulemaking Board rule changes that would require dealers to disclose bond mark-ups and mark-downs on retail customer trade confirmations.
On August 25, after approximately five years of litigation concluding with a 25-day bench trial, Judge Peter G. Sheridan issued the opinion of the U.S. District Court for the District of New Jersey in the first trial of a “manager-of-managers” theory of liability for breach of fiduciary duty.
On August 22, the Internal Revenue Service released new safe harbor guidelines for determining whether a management contract results in private business use of property for purposes of the federal income tax rules relating to tax-exempt bonds.
The Securities and Exchange Commission recently approved new Financial Industry Regulatory Authority, Inc. pay‑to-play rules to regulate activities of FINRA member firms that engage in distribution or solicitation activities with government entities on behalf of investment advisers.
The Securities and Exchange Commission recently adopted changes to certain aspects of the reporting, disclosure and recordkeeping obligations of registered investment advisers including changes to Form ADV.
The Financial Industry Regulatory Authority, Inc. recently proposed amendments to its gifts, non-cash compensation and business entertainment rules.
The Securities and Exchange Commission is seeking comments on proposed Financial Industry Regulatory Authority, Inc. rule changes that would require members to disclose bond mark-ups and mark-downs on retail customer trade confirmations.
On August 24, 2016, the Securities and Exchange Commission issued cease-and-desist orders to 71 municipal issuers and obligated persons in response to voluntary self-reporting of potential misrepresentations in municipal bond offering documents regarding compliance with prior disclosure obligations under the SEC’s Municipalities Continuing Disclosure Cooperation initiative.
- Q3 2016 (Originally Published July 18, 2016)Transaction Advisors
In merger and acquisition and other commercial agreements, the parties often agree to undertake “commercially reasonable efforts” in support of the transaction. In a recent case, the Delaware Chancery Court analyzed whether a prospective acquirer violated its agreement to use “commercially reasonable efforts.”
The Internal Revenue Service issued Notice 2016-10 to address foreign tax credits and regulated investment companies. The Internal Revenue Code does not provide guidance on the question of how a RIC should treat refunds of foreign tax when it has made an election to pass the foreign tax credit to its shareholders. Notice 2016-10 begins to address this question.
On June 22, President Obama signed into law the first major amendment to the Toxic Substances Control Act since its enactment forty years ago. The amendment, the Frank R. Lautenberg Chemical Safety for the 21st Century Act, is commonly referred to as “TSCA Reform.”
Federal law creates an exemption from environmental liability for lenders under the federal Comprehensive Environmental Response, Compensation, and Liability Act, which provides that a party who owns or operates a facility can be held responsible for cleaning up hazardous waste at or from the facility regardless of whether that party caused or contributed to the contamination.
On August 1, the Municipal Securities Rulemaking Board released details from its most recent quarterly meeting. Among other things, the press release from the meeting stated that the MSRB will not pursue rulemaking with regard to its concept proposal to require municipal advisors to disclose information about bank loans entered into by their municipal issuer clients.
- Spring/Summer 2016 (Originally Published April 7, 2016)Real Estate Finance Journal
The Board of Governors of the Federal Reserve adopted a final rule to include certain U.S. municipal securities as high-quality liquid assets for purposes of the liquidity coverage ratio rule to which large banks are subject.
- July/August 2016Practical Compliance & Risk Management for the Securities Industry
Following the implementation of Dodd-Frank's rules and regulations and the initial wave of SEC examinations of municipal advisors, management and compliance personnel are navigating through the rules while continuing to run their business and service clients.
- July 27, 2016 (Originally Published June 24, 2016)Corporate Compliance Insights
“Board refreshment” is currently a hot corporate governance topic. This corporate governance update focuses on director succession planning and the critical role it plays in board refreshment.
- July 25, 2016 (Originally Published July 22, 2016)Lending Times
A recent decision of the Maryland Court of Appeals could require marketplace lenders and others who arrange for federal or state banks to fund consumer loans to consumers residing in Maryland to obtain licenses as “credit services businesses” and could prohibit them from arranging those loans at interest rates exceeding the applicable Maryland usury caps.
On July 18, the U.S. Treasury and the Internal Revenue Service published final arbitrage regulations that contain revisions to the tax-exempt bond regulations relating to, among other things, working capital financings.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued a Risk Alert announcing that they will be undertaking an examination initiative focused on the risk that registered advisers may be making conflicted recommendations to their clients.
The Securities and Exchange Commission recently proposed a new rule and rule amendments under the Investment Advisers Act of 1940 that would require SEC-registered investment advisers to adopt and implement written business continuity and transition plans.
Congress has approved the Puerto Rico Oversight, Management, and Economic Stability Act, and President Obama is expected to sign the measure into law by July 1, 2016. Puerto Rico owes its bondholders a $1.9 billion debt payment on July 1 that by all accounts it cannot make.
- June 2016AIRA Journal
This article discussed leveraged lending guidelines, unitranche facilities and the risks associated with unitranche facilities, including with respect to “agreements among lenders” as illustrated by the recent case of In re Radio Shack Corporation.
On June 3, 2016, the United States Bankruptcy Court for the District of Delaware ruled that the intercreditor agreement between first lien noteholders and junior noteholders in In re Energy Future Holdings Corp. did not require the junior noteholders to bear the cost of a previously disallowed make-whole payment to the first lien noteholders.
- June 23, 2016 (Originally Published May 31, 2016)Law360
On May 27, 2016, New Jersey Gov. Chris Christie signed into law the Casino Tax Property Stabilization Act in an effort to help Atlantic City get back on the path to fiscal stability.
The U.S. Supreme Court placed the final nail in the coffin of the Puerto Rico Public Corporation Debt Enforcement and Recovery Act. The Court found that Puerto Rico was not entitled to create its own restructuring process because such a process is prohibited by the Bankruptcy Code.
- CCH Global Tax Weekly
UCITS are a type of collective investment vehicle and they may be difficult to fit into existing tax and regulatory schemes. Although UCITS were developed to facilitate cross-border investments, the model U.S. and OECD treaties are only recently beginning to effectively address collective investment vehicles.
The Financial Industry Regulatory Authority, Inc. recently filed changes to new FINRA Rule 2242 (Debt Research Analysts and Debt Research Reports) with the Securities and Exchange Commission. The rule is still new and FINRA has delayed implementation several times.
The Financial Industry Regulatory Authority, Inc. recently filed proposed changes to certain aspects of the FINRA rules governing member firms’ communications with the public. The proposed rule changes are substantially similar to those proposed by FINRA in May 2015.
- May 2016ACIC Private Notes
Over the past several years, a number of public-private partnership transactions have been financed in the domestic and cross-border U.S. private placement market. Given the need for new infrastructure both domestically and abroad, we anticipate that the number of P3 transactions entering the U.S. private placement market will continue to rise over the coming years.
New Jersey has taken steps to aid troubled Atlantic City in an apparent attempt to avoid a bankruptcy filing that may not only impact the distressed city but also other cities and towns in the State.
It is a basic principle in bankruptcy that a secured lender is entitled to receive interest and other charges arising post-petition to the extent the lender is over-secured. A recent decision challenges this principle in cases where the value of a lender’s collateral diminishes during the course of the bankruptcy case.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- NACHA Operating Rules — New Unauthorized Entry Fee
- Customer Due Diligence — Beneficial Ownership Rule
- Limited English Language Proficiency Customers
- Law360
A recent decision issued by a federal district court in North Carolina challenges the familiar principle that in a borrower’s bankruptcy, the lender, if it is oversecured as of the bankruptcy filing date, is entitled to receive post-petition interest, attorneys’ fees and other charges arising post-petition to the extent of the value of its collateral.
- The Wall Street Journal
Atlantic City is in the midst of a financial crisis that has been in the making for years. Increased competition and a host of unfortunate spending and hiring decisions have led to a state of affairs that currently features the nation’s highest home foreclosure rate, junk bond credit status and an alarmingly large budget deficit.
The Securities and Exchange Commission recently published a notice of its intention to adjust for inflation dollar amount thresholds for the “qualified client” definition under Investment Advisers Act of 1940 Rule 205-3. Under Rule 205-3, an investment adviser may charge performance-based fees to a “qualified client” meeting a minimum net worth or minimum assets.
Client Alert
The Financial Crimes Enforcement Network recently published its final rule under the Bank Secrecy Act of 1970, as amended on customer due diligence requirements for banks, broker-dealers, mutual funds and futures commission merchants and introducing brokers in commodities.On April 4, the U.S. Treasury Secretary announced that the government would release regulations to curb inversions and reduce the ability of companies to avoid taxes through “earnings stripping;” those regulations were published in the Federal Register on April 8th.
On May 18, 2016, the Department of Labor issued the final version of the its overtime rule, which officially raises the salary basis threshold for “white collar” overtime exemptions to $47,476 per year, or $913 per week, increasing the applicability of the Fair Labor Standards Act to an additional 4.2 million employees.
- Client Alert
In December 2015, Congress passed the Protecting Americans from Tax Hikes Act of 2015, which extended certain federal renewable energy tax credits for projects that began construction prior to the dates set forth in the Path Act. In response to that extension, the IRS has issued additional guidance with respect to a renewable energy facility’s eligibility to receive these tax credits.
On May 10, 2016 the U.S. Department of the Treasury published a white paper entitled “Opportunities and Challenges in Online Marketplace Lending.” The White Paper follows the “Request for Information” which the Department published in July 2015 to solicit public input on various topics concerning marketplace lending.
The Board of Governors of the Federal Reserve System issued a Notice of Proposed Rulemaking re-proposing a rule that would establish credit limits for single counterparties ofU.S. bank holding companies, foreign banking organizations, and U.S. intermediate holding companies of an FBO.
- May 2016 (Originally Published February 3, 2016)Pratt's Privacy & Cybersecurity Law Report
Pratt's Privacy & Cybersecurity Law Report republished a special edition of Chapman's To the Point! newsletter.
On April 26, 2016, the Federal Deposit Insurance Corporation issued a proposed rule to implement the Net Stable Funding Ratio requirement. The Board of Governors of the Federal Reserve Board will consider the proposed NSFR rule at its meeting on May 3, 2016 and the Office of the Comptroller is also expected to to consider the proposed rule in the near future.
The Financial Industry Regulatory Authority, Inc. delayed the implementation of FINRA Rule 2242 until July 16, 2016. FINRA Rule 2242 addresses conflicts of interest relating to the publication and distribution of debt research reports.
- Client Alert
On March 4, 2016 the Board of Governors of the Federal Reserve System issued a Notice of Proposed Rulemaking re-proposing a rule that would establish credit limits for single counterparties ofU.S. bank holding companies, foreign banking organizations, and U.S. intermediate holding companies of an FBO, with $50 billion or more of consolidated assets.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- Recent Action by the OCC of Special Concern for Directors, Senior Managers, and Compliance Officers
- FDIC Provides Additional Guidance on Corporate Governance
- April/May 2016 (Originally Published January 22, 2016)Pratt's Journal of Bankruptcy Law
Pratt's Journal of Bankruptcy Law republished a Chapman Client Alert.
The Municipal Securities Rulemaking Board prohibits a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the minimum denomination. The MSRB recently proposed adding two additional exceptions that would allow dealers to sell below stated minimums.
This alert addresses several frequently asked questions related to sales of unit investment trusts registered under the Investment Company Act of 1940 by those persons deemed fiduciaries under the U.S. Department of Labor's recently released fiduciary rule.
Today the U.S. Department of Labor released its highly anticipated final rule to define the term “fiduciary” and address conflicts of interest in providing investment advice to retirement accounts.
Today, the Basel Committee on Banking Supervision published a consultative document proposing revisions to its Basel III leverage ratio framework. Among other things, the Proposed Revisions provide that for purposes of calculating the denominator of the leverage ratio, off-balance sheet exposures of banks to securitization transactions are to be treated the same as such exposures are treated under the Basel Committee revisions to its securitization framework for risk-based capital.
- Client Alert
The Internal Revenue Service recently released proposed regulations concerning the definition of a “political subdivision” for purposes of tax-exempt financing.
- April 1, 2016 (Originally Published March 18, 2016)Law360
Law360 republished a Chapman Corporate Governance Quarterly Update.
In a widely expected ruling, the Illinois Supreme Court has upheld a Cook County state court ruling holding that a state law, Public Act 98-641, reducing annuity benefits for employees and retirees of the City of Chicago, in exchange for increased contributions to certain pension funds, was unconstitutional.
Retail bondholders recently filed two class action suits in the United States District Court for the Southern District of New York challenging exchange offers under the Trust Indenture Act.
- Bloomberg BNA's Health Law Reporter
On Oct. 27, 2015, the United States Treasury Department and the Internal Revenue Service published long-awaited final regulations that provide welcome guidance to 501(c)(3) health care organizations that are borrowers of qualified 501(c)(3) bonds.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- Use of Property Evaluations
- A Bank Customer’s Guide to Cybersecurity
- Certain Prepaid Cardholders Treated as Customers for CIP Requirements
In a move that has been anticipated for months, on March 15, 2016, the Department of Labor took one of the final steps toward making its new overtime rules a reality.
- Client Alert
On March 9, 2016, the U.S. Securities and Exchange Commission issued a cease and desist order against Westlands Water District, a public agency of the State of California, the District General Manager and General Counsel, and the former District Assistant General Manager.
On Friday, March 18, 2016, the United States Supreme Court issued a call for the views of the Solicitor General of the United States before it decides whether to hear an appeal from a Second Circuit Court of Appeals decision rendered last May in the case of Madden v. Midland Funding, LLC.
- Corporate Governance Quarterly Update
Oversight of a company’s enterprise risks has recently evolved into one of the board’s most critical fiduciary duties and responsibilities. Since enterprise risks do not remain static and are often interrelated and complex, it is imperative that boards maintain continuous risk oversight.
The staff of the Securities and Exchange Commission’s Division of Investment Management recently released guidance regarding registered investment company risk disclosure.
- Legal, Operations, and Strategy Briefs for Financial Institutions
On March 7, the CFPB announced that it is accepting consumer complaints about online marketplace lenders, giving consumers “a greater voice in these markets and a place to turn to when they encounter problems.” The CFPB also issued a bulletin to provide consumers with information on marketplace lending.
On February 16, 2016, the District Court for the District of Delaware affirmed the decision of the Delaware bankruptcy court in In re Energy Future Holdings Corp., that noteholders’ claims for make-whole premiums may be blocked by the automatic stay of the U.S. Bankruptcy Code.
The Municipal Securities Rulemaking Board is seeking comment on proposed guidance on establishing the “prevailing market price” and calculating mark-ups and mark-downs for principal transactions in municipal securities.
- Client Alert
In this article, we provide a brief overview of the key reforms under Regulation AB II, followed by a more focused review of the next compliance hurdle that ABS issuers will face — annual compliance checks to determine continued shelf eligibility.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- Standards for Safeguarding Customer Financial Information
- HIPAA Data Breach Notification Deadline — February 29, 2016
- CFPB Issues Additional Guidance on Furnisher Obligations under Regulation V
- Court Denies Motion to Dismiss Complaint Against Compliance Officer for Bank Secrecy Act Violations
The Financial Industry Regulatory Authority, Inc. delayed the implementation of FINRA Rule 2242 (Debt Research Analysts and Debt Research Reports) until April 22, 2016. FINRA Rule 2242 addresses conflicts of interest relating to the publication and distribution of debt research reports.
- Law360
On Feb. 8, 2016, the United States Court of Appeals for the Ninth Circuit held that a claim of an “insider,” which is not counted for the purposes of creating an accepting impaired class for confirmation of a contested plan of reorganization, does not retain insider status once transferred to a third party that is not an insider.
- Client Alert
On February 10, 2016, the Government Finance Officers Association alerted its members that the Enforcement Division of the Securities and Exchange Commission has begun contacting issuers in connection with its Municipalities Continuing Disclosure Cooperation initiative.
On February 9, 2016, the SEC’s Division of Corporation Finance published a guide for issuers of Asset-Backed Securities addressing changes in EDGAR filing procedures to support new and updated filing requirements under Regulation AB II and Exchange Act Rule 15Ga-2.
- February 8, 2016 (Originally Published February 1, 2016)Law360
Law360 republished a Chapman Client Alert.
- February/March 2016 (Originally Published October 15, 2016)Pratt's Journal of Bankruptcy Law
Pratt's Journal of Bankruptcy Law republished a Chapman Client Alert.
- Client Alert
On February 2, 2016, in the third round of settlements with underwriters under its Municipalities Continuing Disclosure Cooperation initiative, the Securities and Exchange Commission issued cease-and-desist orders to 14 underwriting firms.
A recent decision of the U.S. District Court for the Eastern District of Pennsylvania has highlighted once again the regulatory risks that the so-called “true lender” doctrine can create for internet-based lenders who partner with banks to establish exemptions from applicable state consumer protection laws.
- Client Alert
On January 20, 2016, the Seventh Circuit held that Illinois real property tax sales cannot be deemed to be for “reasonably equivalent value” as a matter of law. Applying the general rule of §548(a)(1)(B), the Court noted that tax sales do not involve competitive bidding and the bid amount bears no relationship to the value of the underlying real estate.
This Client Alert briefly summarizes some of the primary issues that advisers might consider in their 2016 annual review and update processes.
The Securities and Exchange Commission recently approved amendments to Financial Industry Regulatory Authority, Inc. rules to apply FINRA Rule 2121 (Fair Prices and Commissions) to government securities.
On January 14, 2016 the Basel Committee on Banking Supervision published final rules related to the Fundamental Review of the Trading Book. Each member country, including the United States, will have to consider how it will give effect to the FRTB framework.
- January 19, 2016 (Originally Published December 8, 2015)Law360
Law360 republished a Chapman Corporate Governance Quarterly Update.
On January 6, 2016, the staff of the Securities and Exchange Commission’s Division of Investment Management released guidance regarding registered open-end investment company payments to certain financial intermediaries that provide shareholder and recordkeeping services for investors. The staff’s guidance is designed to help fund boards oversee and evaluate whether sub-accounting fees are for distribution or non-distribution services.
- Client Alert
The Financial Industry Regulatory Authority recently issued its annual Regulatory Examination Priorities Letter. FINRA member firms should review their policies, procedures and business activities in light of FINRA’s stated 2016 priorities.
- Client Alert
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently released its Examinations Priorities for 2016. Firms should review their policies, procedures and business activities in light of OCIE’s stated 2016 priorities.
- Law360
The Eleventh Circuit has become the latest federal appellate court to evidence a reluctance to dismiss appeals stemming from bankruptcy court decisions involving consummated plans and settlements based on notions of futility or equitable mootness.
The Financial Industry Regulatory Authority recently filed with the Securities and Exchange Commission a revised proposal to establish “pay-to-play” rules that would regulate certain activities of FINRA member firms. The revised proposal responds to comments made on a previous FINRA proposal.
- November/December 2015Journal of Taxation and Regulation of Financial Institutions
This article examines the current treatment of default interest by bankruptcy courts and analyzes how a creditor’s claim for default interest could be treated as part of a chapter 11 plan process.
- January 2016 (Originally Published August 11, 2015)Client Alert
The Banking Law Journal republished a Chapman Client Alert.
- Client Alert
Recent changes to the tax law will require partnerships to pay tax at the partnership level on certain audit adjustments to partnership income, and these changes may affect government pension plans that invest in partnerships.
- Corporate Governance Quarterly Update
With the 2016 proxy season quickly approaching, reporting companies will begin contemplating the various disclosures they will make. Increasingly, audit committees in particular are being asked to voluntarily provide enhanced disclosure relating to how they perform their oversight duties and responsibilities.
In December 2014, the Securities and Exchange Commission approved a new Municipal Securities Rulemaking Board best execution rule for transactions in municipal securities and related amendments applicable to “sophisticated municipal market professionals."
In September, the IRS issued final regulations to clarify that controlled groups under the rules for regulated investment companies may consist of only two entities. This may cause unanticipated attributions of ownership, which would disqualify some RICs from beneficial tax treatment.
On November 2, 2015 President Obama signed the Bipartisan Budget Act of 2015, replacing a longstanding set of statutory provisions governing the audit and adjustment of partnership income tax returns.
The Municipal Securities Rulemaking Board recently adopted amendments to MSRB Rule G-20 on gifts, gratuities and non-cash compensation. The rule changes become effective on May 6, 2016.
- Client Alert
Today, the Illinois State Board of Education approved allocation guidelines and an application process for Qualified School Construction Bonds. Pursuant to such guidelines and process, ISBE expects to allocate $495,602,000 in volume limitation for QSCBs to school districts.
- November 16, 2015 (Originally Published October 2, 2015)Law360
Law360 republished a Chapman Client Alert.
- Client Alert
Many individuals no longer face a federal estate tax or need to be concerned with dividing assets between spouses for tax planning purposes. But for individuals residing in Illinois, and even non-residents who own Illinois property, not only is there still an estate tax, but the exemption is much smaller.
- Law360
On November 2, 2015, the Delaware bankruptcy court ruled that where a majority of bondholders direct an indenture trustee to withdraw its confirmation objections, the remaining minority who did not file independent objections to confirmation may not step in to press the indenture trustee’s objections.
The Municipal Securities Rulemaking Board recently proposed amendments to MSRB Rules G-12 and G-15 that would shorten the settlement cycle from T+3 (trade date plus three business days) to T+2 (trade date plus two business days) for transactions in municipal securities.
A recent decision of the Maryland Court of Special Appeals could impact marketplace and other lenders who arrange for federal or state banks to fund consumer loans in Maryland at rates in excess of the applicable Maryland usury caps.
- Client Alert
On October 22, 2015, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Farm Credit Administration approved a final rule establishing margin requirements for Uncleared Swaps. The Federal Reserve and Federal Housing Finance Agency followed suit on October 30. The Final Rule becomes effective on April 1, 2016.
- Client Alert
On October 26, 2015, the Department of the Treasury released Final Regulations on allocation and accounting, and certain remedial actions, for purposes of the private activity bond restrictions that apply to tax-exempt bonds.
- October 2015 (Originally Published September 29, 2015)Insights: The Corporate & Securities Law Advisor
Insights: The Corporate & Securities Law Advisor republished an issue of Chapman's Corporate Governance Quarterly Update.
At a meeting on October 22, 2015, the FDIC Board approved a final rule regarding Treatment of Financial Assets Transferred in Connection with a Securitization or Participation.
At a meeting today the FDIC Board approved a joint final rule establishing margin requirements for swaps that are not cleared through a clearinghouse.
- Client Alert
On October 1, 2015, the Tax Exempt and Governmental Entities Division of the Internal Revenue Service released its Tax Exempt and Governmental Priorities for Fiscal Year 2016.
- Client Alert
The Financial Industry Regulatory Authority is requesting comment on a revised proposal to amend FINRA Rule 2232 governing trade confirmation disclosures. The amendments would require member firms to disclose a “reference price” on customer confirmations for principal transactions in corporate and agency debt securities with retail customers.
The FDIC has announced an open session meeting of its Board of Directors to take place at 10:00 AM on Thursday, October 22, 2015.
The FDIC has announced an open session meeting of its Board of Directors to take place at 10:00 AM on Thursday, October 22, 2015.
- Client Alert
The Securities and Exchange Commission recently approved a proposed rule change by the Financial Industry Regulatory Authority, Inc. that would amend FINRA Rule 2210 to require each of a member’s websites to include a readily apparent reference and hyperlink to BrokerCheck.
- Client Alert
On September 30, 2015, in the second round of settlements with underwriters under its Municipalities Continuing Disclosure Cooperation initiative, the Securities and Exchange Commission issued cease-and-desist orders to 22 underwriting firms.
The Financial Industry Regulatory Authority, Inc. recently filed a proposed rule change with the Securities and Exchange Commission to apply FINRA rules on bond mark-ups and commissions to transactions in exempted securities that are government securities.
- Client Alert
No particular notice is required before commencing a mortgage foreclosure suit relating to commercial property, and many of the rules intended to help keep homeowners in their homes do not apply. But what about the odd situation where a commercial property is used by the mortgagee as a primary residence?
The Securities and Exchange Commission recently proposed new rules and amendments designed to enhance liquidity risk management requirements for certain open-end management investment companies, including mutual funds and exchange-traded funds.
- Client Alert
The Municipal Securities Rulemaking Board recently proposed amendments to MSRB Rule G-15 that would require brokers, dealers and municipal securities dealers to disclose the mark-up or mark-down on retail customer confirmations for specified principal transactions.
In a decision that may ease the resolution of future bankruptcy proceedings, the Third Circuit Court of Appeals affirmed a bankruptcy court’s approval of a sale of substantially all of a debtors’ assets based on a settlement in which the secured creditors gifted funds to general unsecured creditors.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- CFPB Guidance on Private Mortgage Insurance Cancellation
- FDIC Announces Settlement with Credit Card Issuer Related to the Sale of Add-On Products
- Servicemember Updates
- Eleventh Circuit Rules on Applicability of FDCPA to Bank
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently issued a Regulatory Notice providing guidance on liquidity risk management practices that FINRA expects member firms to consider and implement in preparation for adverse circumstances.
On September 17, 2015, the SEC adopted final amendments to Rule 2a-7 under the Investment Company Act of 1940. The amendments eliminate references to credit ratings in the Rule and make changes to the issuer diversification requirements of the Rule.
- Client Alert
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued a Risk Alert providing information on the areas of focus for the SEC staff’s second round of cybersecurity examinations of registered investment advisers and broker-dealers.
- Client Alert
According to Giving USA, Americans gave an estimated $358.38 billion to charity in 2014, surpassing the peak last seen in 2007 prior to the Great Recession.
- Client Alert
The National Futures Association recently submitted an interpretive notice proposal to the Commodity Futures Trading Commission that would require NFA members to establish information systems security programs.
- September 2015 (Originally Published June 3, 2015)The Banking Law Journal
The Banking Law Journal republished a Chapman Client Alert.
- Client Alert
The Financial Crimes Enforcement Network recently proposed rulemaking to prescribe minimum standards for anti-money laundering programs.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently announced the adoption of amendments to its equity research rules and entirely new rules governing debt research.
- Client Alert
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued a Risk Alert summarizing deficiencies in controls of certain broker-dealers related to sales of structured products to retail investors.
- September 2015 (Originally Published June 24, 2015)Pratt's Journal of Bankruptcy Law
Pratt's Journal of Bankruptcy Law republished a Chapman Client Alert.
- Client Alert
On August 13, 2015, the Securities and Exchange Commission issued a cease-and-desist order against Edward D. Jones & Co., L.P., in response to alleged improper trading practices by the St. Louis-based broker-dealer.
- Client Alert
The Securities and Exchange Commission is seeking comments on proposed rule changes by the Financial Industry Regulatory Authority, Inc. addressing external personal accounts opened or established by associated persons of FINRA member firms.
- August 13, 2015 (Originally Published June 29, 2015)The Columbia Law School Blue Sky Blog
The Columbia Law School Blue Sky Blog republished a Chapman Insights article.
In the case of Madden v. Midland Funding, LLC, the Second Circuit narrowly interpreted the scope of federal preemption of state usury laws under the National Bank Act as such laws apply to certain non‑bank loan assignees.
Though the RadioShack proceeding sheds light on how bankruptcy courts may interpret an agreement among lenders, unfortunately, it still remains unclear as to whether U.S. bankruptcy courts will assert jurisdiction to consider arguments arising under an agreement among lenders.
- Client Alert
The Internal Revenue Service Office of Tax Exempt Bonds has announced a new sequester reduction in amounts paid to issuers of direct pay bonds for which issuers elected to receive a direct payment from the U.S. Treasury pursuant to Section 6431 of the Internal Revenue Code.
- Client Alert
Tax freeze legislation recently passed by the Illinois Senate would impact every taxing district in the State if it ultimately becomes law.
- Client Alert
On August 3, 2015, President Obama announced the Environmental Protection Agency’s final rule to cut carbon emissions from the nation’s power plants under the Clean Air Act.
- Client Alert
The Financial Industry Regulatory Authority recently issued a Regulatory Notice to remind firms that their written supervisory procedures should identify the process for detecting, resolving, and preventing the consequences of short positions and fails-to-receive in municipal securities.
- Law360
On July 13, 2015, the United States Court of Appeals for the Eleventh Circuit reversed lower court orders that had precluded a lender from collecting accrued default interest from a debtor as a condition for reinstatement of the loan under a confirmed plan of reorganization.
- Client Alert
According the U.S. Census Bureau, the number of unmarried, cohabiting couples in the United States has nearly doubled in the last decade. Since they are not subject to the rights and obligations that accompany a marital relationship, partners committing to a serious relationship should consider the need to affirmatively plan for themselves, each other, and any children.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- Telephone Consumer Protection Act Declaratory Ruling
- CFPB First Monthly Complaint Report
- Treasury Department Inquires about Marketplace Lending
In a move intended to fortify the rights of holders of California municipal general obligation debt as well as lower borrowing costs for California municipalities, California Governor Jerry Brown signed SB 222 into law earlier this month.
- Client Alert
The Securities and Exchange Commission recently published orders approving two rule proposals by the Financial Industry Regulatory Authority, Inc. governing equity and debt research analysts and research reports.
- Client Alert
The Securities and Exchange Commission is seeking comments on a proposed rule change by the Financial Industry Regulatory Authority, Inc. that would amend FINRA Rule 2210 (Communications with the Public).
- July 24, 2015 (Originally Published June 15, 2015)Law360
Law360 republished a Chapman Client Alert.
Recently, before awarding bondholders any amounts on account of a make-whole provision upon a debt prepayment, courts have repeatedly insisted on clear language in the credit documents requiring such payment notwithstanding a bankruptcy filling and a related automatic acceleration.
On June 30, 2015, the Wage and Hour Division of the Department of Labor released a Notice of Proposed Rulemaking that overhauls the Fair Labor Standards Act’s overtime regulations.
- July/August 2015Pratt's Journal of Bankruptcy Law
Pratt's Journal of Bankruptcy Law published an article written by Chapman attorneys.
In a decisive opinion, the U.S. Court of Appeals for the First Circuit affirmed a lower court ruling that the Puerto Rico Public Corporations Debt Enforcement and Recovery Act is preempted by the U.S. Bankruptcy Code and therefore unconstitutional.
On May 20th, the IRS released draft updates to the U.S. Model Income Tax Convention.
- Client Alert
On June 8, 2015, Long Beach Community College District in California paid the Internal Revenue Service $1,013,000 as a result of the private activity use of certain real property acquired by the District with proceeds of tax-exempt certificates of participation issued in 2001.
A recent decision in the Southern District of New York interpreting the Trust Indenture Act will likely provide bondholders additional leverage in out-of-court restructurings.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- Servicemembers Update
- CFPB Consumer Complaint Narratives
- Private Student Loans and Cosigners
- Client Alert
The U.S. Supreme Court’s 6-3 split decision in Baker Botts LLP v. Asarco LLC will have long standing implications for all bankruptcy professionals’ compensation, potentially making it much more costly for all professionals retained in chapter 11 cases.
- Client Alert
On June 29, 2015, the Supreme Court issued a ruling declaring that the Environmental Protection Agency interpreted the Clean Air Act unreasonably in refusing to consider costs when deciding whether to regulate power plant emissions in relation to the EPA’s Mercury and Air Toxics Standards.
- Client Alert
The Securities and Exchange Commission recently set the compliance date for the ban on certain payments to third-party solicitors under Rule 206(4)-5 of the Investment Advisers Act of 1940 as July 31, 2015.
- Client Alert
The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance on investment adviser Code of Ethics exceptions to personal securities transaction reporting for securities transactions occurring in certain types of trusts or investment management accounts where the beneficiary or account holder has limited or no discretionary investment authority.
Private schools that are exempt from federal income taxation must file an annual information return with the IRS concerning their racial nondiscrimination policies. Schools that file the annual information return, Form 990, Return of Organization Exempt from Income Tax may satisfy this annual filing requirement on Schedule E.
- July/August 2015Taxation of Exempts
Form 5578 is a half-page form simply certifying that a private school has complied with the racial nondiscrimination guidelines set forth by the Internal Revenue Service. The failure of a private school to annually file this form may jeopardize the school's tax-exempt status under Section 501(c)(3).
- Chapman Insights
The purpose of this article is to provide a general overview of how royalty-backed securitizations work and to encourage further use of royalty-backed securities by leaders in the music, business, and financial industries.
- Client Alert
On June 24, 2015, Prop. Treas. Reg. §1.148-1(f) addressing the definition of “Issue Price” was published in the Federal Register. The Internal Revenue Service is accepting comments on the Proposed Regulation through September 22, 2015.
- Client Alert
On June 18, 2015, the Securities and Exchange Commission issued cease-and-desist orders to 36 underwriting firms in response to voluntary self-reporting of potential misrepresentations in municipal bond offering documents regarding compliance by issuers with prior disclosure obligations under the SEC’s Municipalities Continuing Disclosure Cooperation initiative.
- Client Alert
The Financial Industry Regulatory Authority is requesting comment on a revised proposal to adopt a new FINRA rule that would consolidate and clarify former National Association of Securities Dealers and New York Stock Exchange rules regarding discretionary accounts and transactions.
- Client Alert
On June 18, 2015, the Securities and Exchange Commission issued cease-and-desist orders to 36 underwriting firms in response to voluntary self-reporting of misrepresentations in municipal bond offering documents regarding compliance with prior disclosure obligations under its Municipalities Continuing Disclosure Cooperation initiative.
- Client Alert
In Delaware, arms-length negotiations may no longer be sufficient to protect an unwitting lender from a derivative claim brought by a borrower’s shareholder with respect to certain change of control defaults contained in credit agreements.
- Client Alert
On June 12, 2015, the Securities and Exchange Commission issued a release seeking public comment to help inform its review of the listing and trading of new, novel, or complex exchange-traded products.
- Client Alert
Under current law, affiliated creditors holding debt arising from the same loan transaction will not likely be lumped together when determining the number of creditors that have voted to approve or reject a plan, particularly where such affiliates held such debt prior to a bankruptcy filing and assert their claims through separate proofs of claim.
- Client Alert
The Financial Industry Regulatory Authority recently issued a Regulatory Notice announcing that it had added additional guidance to the FINRA Rule 2210 questions and answers webpage to provide additional guidance on advertising and other communications with retail investors.
- Client Alert
The Securities Industry and Financial Markets Association recently proposed that the Financial Industry Regulatory Authority amend its rules to replace the current broker-dealer “suitability” standard with a new “best interests” standard along with enhanced customer disclosure about a broker-dealer’s services, conflicts of interest, fees, and compensation.
- Client Alert
To kick off the Memorial Day weekend, the Federal Reserve Board announced a proposal to include certain state and municipal general obligation bonds in the calculation of High Quality Liquid Assets, the numerator of the new Liquidity Coverage Ratio requirement to which large banks are subject.
- June 2015White Paper
On December 8, 2014, the American Bankruptcy Institute Commission to Study the Reform of Chapter 11 released its Final Report and Recommendations for amendment to the current Bankruptcy Code. The proposals are significant, and on the whole, largely harmful to the rights of secured creditors.
- Client Alert
The Financial Industry Regulatory Authority recently released a Regulatory Notice in which it proposed changes to certain aspects of the FINRA rules governing member firms’ communications with the public. This Client Alert is a summary of the proposed changes.
- Client Alert
This Client Alert summarizes the Securities and Exchange Commission proposed changes to certain aspects of the reporting, disclosure, and recordkeeping obligations of registered investment advisers.
- Client Alert
This Client Alert summarizes the Securities and Exchange Commission proposed changes to certain aspects of the disclosure and reporting obligations of registered investment companies.
- Client Alert
The Financial Industry Regulatory Authority recently issued an interpretive letter that allows distributors of mutual funds to include related performance information in communications with institutional investors, including registered broker-dealers and investment advisers.
- Client Alert
On May 20, 2015, the Securities and Exchange Commission proposed changes to certain aspects of reporting and disclosure obligations of registered investment advisers and investment companies.
On May 18, 2015, the Board of Governors of the Federal Reserve System issued guidance indicating when a banking organization that determines its risk-based capital using the advanced approaches may apply the simplified supervisory approach rather than the supervisory formula approach when determining the risk weight of a securitization exposure for risk-based capital purposes.
- Client Alert
The United States District Court for the Southern District of New York recently affirmed the Bankruptcy Court’s decision in In MPM Silicones, LLC, establishing Judge Drain’s “prime plus” formula as the appropriate interest rate required in connection with new notes issued to secured creditors under a cramdown plan of reorganization in the Southern District of New York.
- Client Alert
This is the fifth installment of Chapman and Cutler LLP’s discussion of the proposals contained in the Final Report and Recommendations of the American Bankruptcy Institute’s Commission to Study the Reform of Chapter 11.
- Legal, Operations, and Strategy Briefs for Financial Institutions
In this edition:
- U.S. Supreme Court Will Not Hear CashCall Case – Uncertainty for Marketplace Lenders?
- FinCEN Current Priorities
- Guidance on Youth Savings Programs
- Overdraft Update – CFPB Enforcement Action
- Client Alert
In order to avoid future intercreditor disputes, investors can learn from past mistakes and draft or revise their intercreditor agreements accordingly. In this Client Alert, we attempt to highlight a number of specific considerations that may improve intercreditor agreements, to better achieve their intended purpose of delineating the respective priorities and rights of senior and junior secured creditors while avoiding intercreditor conflict.
On May 4, 2015, the U.S. Commodity Futures Trading Commission published a letter providing clarification of an issue that has been of acute interest to the auto and equipment securitization industry. Section 2(h)(7)(A) of the Commodity Exchange Act permits certain qualifying entities to elect not to clear a swap that is otherwise subject to a Clearing Determination.
- Client Alert
The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance for registered investment advisers and registered investment companies related to cybersecurity preparedness in their business practices.
- Client Alert
The Securities and Exchange Commission staff recently announced an initiative to conduct examinations of registered investment company complexes that have not previously been examined.
On March 31, 2015, the U.S. Commodity Futures Trading Commission issued no-action relief stating that, with respect to certain legacy special purpose vehicle swaps, swap dealers would be exempt from complying with certain CFTC regulations. These Specified Regulations relate to external business conduct standards and swap trading documentation that swap dealers would otherwise be required to adhere to.
In this issue:
- CFPB Arbitration Study: First Step to Restricting their Use?
- 7th Circuit Requires Servicers to Credit Payments on the Day Authorized
- Target Data Breach Settlement
- Client Alert
On March 16, 2015, the United States Environmental Protection Agency announced its new voluntary “Safer Choice” labels, which are intended to inform consumers about chemicals present in household and industrial products.
- March 2015White Paper
This Chapman and Cutler white paper provides a summary of, and practical guide to, the principal requirements of federal securities laws relating to municipal bonds. Much of the information discussed in this white paper applies to both higher education bonds and other municipal securities, while certain sections focus on securities laws as applied to the high education sector, in particular.
- Client Alert
Out-of-court debt restructurings may face greater hurdles to success in light of two recent federal court decisions out of New York broadly expanding dissenting bondholders’ rights under the Trust Indenture Act.
- March/April 2015The Corporate Board
The Corporate Board published an article written by Chapman attorneys.
- March 2015Insights: The Corporate & Securities Law Advisor
Insights: The Corporate & Securities Law Advisor published an article based off a Chapman Insights article.
- Client Alert
As indicated in our January 20, 2015 Client Alert, the Obama Administration previously announced in general terms its Fiscal Year 2016 budget plans with respect to the maintenance and improvement of US public infrastructure.
The staff of the Securities and Exchange Commission recently issued guidance to remind affiliates of registered investment companies that the receipt of gifts or entertainment may violate Section 17(e)(1) of the Investment Company Act of 1940.
- The Harvard Law School Forum on Corporate Governance and Financial Regulation
The Harvard Law School Forum on Corporate Governance and Financial Regulation posted an article based on a recent Chapman Insights.
In order to maintain the global private placement market as an attractive market for both issuers and investors, the American College of Investment Counsel undertook to update its Model Form Note Purchase Agreement last year and released its Transaction Process Management Committee Updated Model X Form No. 2, draft dated April 15, 2014.
- Pratt's Journal of Bankruptcy Law
Pratt's Journal of Bankruptcy Law recently published an article based on a recent Chapman Client Alert.
On February 18, 2015, the European Commission issued two publications which begin a three-month consultation with member states, capital market participants, and other stakeholders towards the development of an action plan for a fully functioning European Capital Markets Union by 2019.
- The Banking Law Journal
The Banking Law Journal published an article based on a recent Chapman Client Alert.
- Client Alert
On February 6, 2015, the U.S. District Court for the District of Puerto Rico issued a decision holding Puerto Rico’s Public Corporations Debt Enforcement and Recovery Act unconstitutional, noting that it was “not a close case.”
While proxy access did not garner significant attention over the past two proxy seasons, it has struck 2015 with a vengeance and is one of the most notable early developments of this proxy season.
- IRS Publishes Guidance on Performance and Quality Standards Applicable to Small Wind Energy Property
On January 13, 2015, the IRS published Notice 2015-4 to specify that the performance and quality standards applicable to small wind energy property intended to qualify for the investment tax credit are those established by the American Wind Energy Association or the International Electrotechnical Commission.
As discussed in our previous client alert on this subject, litigation over whether $1.5 billion in prepetition loans to GM were secured or unsecured has been pending before the Second Circuit Court of Appeals. The Second Circuit recently issued a decision upholding the termination.
As part of its charge to promote a fair and efficient municipal securities market, the Municipal Securities Rulemaking Board issued regulatory notice 2015-03 on January 29, 2015, calling for timely disclosure of bank loans extended to municipal borrowers, whether in the form of the direct purchase of bonds or notes, a loan agreement, or any other type of financing with the municipal borrower.
This is the fourth installment of Chapman’s discussion of the proposals contained in the American Bankruptcy Institute’s Final Report and Recommendations to amend the Bankruptcy Code.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued its 2015 Regulatory and Examinations Priorities Letter.
The Financial Industry Regulatory Authority, Inc. recently issued its Regulatory and Examinations Priorities Letter. In this alert are brief summaries of some of the more significant issues FINRA’s letter raises.
- Client Alert
One of the well-known benefits of bankruptcy is that assets can be sold free and clear of claims and interest in the property. But unknown future claims have presented difficulties for purchasers of assets in bankruptcy sales and courts have struggled to devise a clear rule for dealing with such claims.
The Securities and Exchange Commission recently issued a no-action letter which grants relief to broker-dealers, allowing them to rely on investment advisers to perform some or all of their Customer Identification Program obligations under federal anti-money laundering legislation.
On January 21, 2015, the FDIC proposed a rule that would clarify the requirements of its Securitization Safe Harbor Rule regarding retention of an economic interest in the credit risk of securitized financial assets upon and following the effective date of the credit risk retention regulations adopted under Section 15G of the Securities Exchange Act.
On January 16, 2015, the Obama Administration announced in general terms its plans with respect to the maintenance and improvement of public infrastructure, including roads, bridges, ports, water purification plants, and reservoirs, all of which are deemed critical services by the Administration for consumers and businesses alike.
- Client Alert
As discussed in our first two installments, the American Bankruptcy Institute released its Final Report and Recommendations containing proposals to modify the Bankruptcy Code, many of which will have significant and negative implications for secured creditors.
In this edition:
- Student Loan Servicing—Unfair or Deceptive Acts or Practices
- OCC Revises Its Truth in Lending Handbook
- FFIEC Releases Revised BSA/AML Examination Manual
- NACHA Same-Day ACH Processing Proposal
- Client Alert
The beginning of each year provides an opportunity for investment advisers to review annual compliance and regulatory matters, including issues related to private investment funds and commodity pools.
- Client Alert
As discussed in our first installment, the American Bankruptcy Institute released its Final Report and Recommendations containing proposals to modify the Bankruptcy Code, many of which will have significant and negative implications for secured creditors.
- January 2015Pratt's Journal of Bankruptcy Law
Pratt's Journal of Bankruptcy Law published an article based on a recent Chapman Sidebar.
- Corporate Governance Quarterly Update
Director tenure, board entrenchment, and board refreshment are corporate governance buzzwords that increasingly are becoming hot-button issues for institutional investors, proxy advisory firms, shareholder activists, and other governance advocates.
The final credit risk retention rule was published in the Federal Register today, December 24, 2014, setting the compliance dates for the final rule.
- Client Alert
Can a lender use evidence outside the four corners of a security agreement to prove that it has a valid security interest against the bankruptcy trustee?
- Client Alert
Congress recently authorized an additional $400 million of nationwide volume cap for the qualified zone academy bond program.
The Federal Reserve Board announced today that it has acted under the Volcker Rule to give banking entities until July 21, 2016, to conform investments in, and relationships with, covered funds and foreign funds that were in place prior to December 31, 2013, with the requirements of the Volcker Rule.
- Client Alert
Last week, the American Bankruptcy Institute Commission to Study the Reform of Chapter 11 released its Final Report and Recommendations for amendment to the current Bankruptcy Code.
- Special Edition: To the Point!
Certain compliance issues related to a bank’s use of social media data in its business are identified in this briefing for consideration and potential action.
- Client Alert
The Securities and Exchange Commission approved the Municipal Securities Rulemaking Board’s proposal to implement a “best execution” standard for municipal securities transactions.
On December 11, 2014, the Basel Committee on Banking Supervision published final revisions to the securitization framework for determining regulatory capital requirements on exposures arising from securitization transactions.
On December 11, 2014, the Basel Committee on Banking Supervision and the International Organization of Securities Commissions issued a Consultative Document proposing criteria that may be used by transaction parties and regulators to assist in the development of simple and transparent securitization structures.
- Special Edition: To the Point!
The Consumer Financial Protection Bureau has issued its 800+ page proposed rule (with commentary) on prepaid cards.
On December 9, 2014, the Board of Governors of the Federal Reserve System proposed a framework to establish risk-based capital surcharges for the largest, most interconnected U.S. bank holding companies pursuant to Section 165 of the Dodd-Frank Act.
- Client Alert
Generally, federal tax laws restrict the use of tax-exempt governmental use bonds by nongovernmental, non-public users, which is referred to as “private business use.”
- Client Alert
The Securities and Exchange Commission is seeking comments on two new rule proposals by the Financial Industry Regulatory Authority, Inc. governing equity and debt research analysts and research reports.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently proposed new “pay-to-play” rules that would regulate the activities of FINRA member firms engaging in distribution or solicitation activities with government entities on behalf of investment advisers.
- Client Alert
On October 15th, the IRS proposed a change to the regulations which would eliminate the requirement of a creditor to report cancellation of debt income on Form 1099-C after not receiving payment for 36 months.
- Client Alert
The Financial Industry Regulatory Authority, Inc. and the Municipal Securities Rulemaking Board recently requested comment on proposals to require disclosure of pricing information on customer trade confirmations for certain fixed income security transactions.
- Client Alert
On November 6, 2014, the Securities and Exchange Commission announced that fraud charges had been issued against the city of Allen Park, Michigan, and two former city leaders.
- Special Edition: To the Point!
The Consumer Financial Protection Bureau has issued a proposed rule that would bring prepaid products under the Electronic Fund Transfer Act and make the protections currently afforded to credit cardholders under Regulation Z applicable when credit features are obtained in connection with a prepaid account.
In this issue:
- Department of Housing and Urban Development 2013 Disparate Impact Rule is Vacated
- FFIEC Cybersecurity Guidance
- 2014 Federal Interagency Fair Lending Hot Topics Webinar
In this issue:
- Qualified Mortgage Points and Fees Cure
- Posting Privacy Notices Online
- National Survey of Unbanked and Underbanked Households
- Client Alert
The Delaware Supreme Court ruled recently that a secured party’s security interest in collateral can be terminated upon the filing of a UCC termination statement even though there was a mistake in the document.
- Client Alert
On October 24, 2014, the IRS issued Notice 2014-67, Private Business Use of Tax-Exempt Bond Financed Facilities.
- Client Alert
On October 24, 2014, the IRS issued Notice 2014-67, Private Business Use of Tax-Exempt Bond Financed Facilities. The Notice expands the management contract safe harbor guidelines of Revenue Procedure 97-13 to permit certain productivity awards and liberalizes the requirements for certain types of 5-year contracts that will not result in private business use.
On October 31, 2014, the Basel Committee on Banking Supervision issued the final standard for a Net Stable Funding Ratio requirement.
- The Harvard Law School Forum on Corporate Governance and Financial Regulation
An article based on a recent Chapman Client Alert was posted by the Harvard Law School Forum on Corporate Governance and Financial Regulation.
- October 2014Insights: The Corporate & Securities Law Advisor
A Chapman article was published in the October 2014 issue of Insights: The Corporate & Securities Law Advisor.
In September 2014, the U.S. banking agencies adopted final rules implementing a liquidity coverage ratio requirement that will test a bank's ability to withstand "liquidity stress periods." In collaboration with the Structured Finance Industry Group (SFIG), Chapman attorneys authored a guide summarizing elements of the final rule that have the greatest impact on the securitization market.
- Client Alert
The Municipal Securities Rulemaking Board recently announced the approval of an amended continuing education rule that will require annual training and expand the coverage of its Firm Element.
- Client Alert
Issuers and obligated persons are reminded of the approaching deadline for self-reporting materially inaccurate representations in offering documents regarding compliance with continuing disclosure undertakings.
At an open meeting this morning, October 21, 2014, in a 4-1 vote, the Federal Deposit Insurance Corporation adopted final rules to implement the credit risk retention requirements of Section 15G of the Securities Exchange Act of 1934, which were added to that statute pursuant to Section 941 of the Dodd-Frank Act.
Chapman and Cutler attorneys have been monitoring decisions and developments with respect to creditors' rights and have compiled the client alerts published to date that provide important insight regarding the implications of these decisions for holders of secured debt and highlight what every creditor should know in order to effect rights under its credit agreement.
- Client Alert
The Internal Revenue Service Office of Tax Exempt Bonds has announced a new sequester reduction in amounts paid to issuers of direct pay bonds for which issuers elected to receive a direct payment from the U.S. Treasury pursuant to Section 6431 of the Internal Revenue Code.
The Board of Governors of the Federal Reserve System announced today that it is holding an open meeting at 3:30pm (EST) on Wednesday, October 22, 2014, to vote on adoption of a final risk retention rule under Section 941 of the Dodd-Frank Act.
- Client Alert
“Acquisition Financing,” or the funding of capital for the purpose of acquiring a target company, is a growing specialty area among bank lending attorneys.
In this issue:
-
FinCEN Proposed Rule on Customer Due Diligence Requirements
-
CFPB Issues First Enforcement Action for Mortgage Servicing Rules
-
Cordray Speaks about Checking Account Issues
-
- Client Alert
The Federal gift and estate tax exclusion amount shelters gifts and testamentary bequests from gift and estate tax.
- Corporate Governance Quarterly Update
It has been reported that approximately two-thirds of companies in the U.S. are affected by fraud, losing an estimated 1.2% of revenue each year to such activity.
- Client Alert
In an important bench ruling in the MPM Silicones case, Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York has provided debtors with a potentially coercive tool to use as leverage against their secured creditors.
- Client Alert
The Board of Governors of the Financial Industry Regulatory Authority, Inc. recently authorized regulatory notices seeking comment on initiatives to enhance transparency and execution quality in fixed income markets.
This morning, Regulation AB II was published in the Federal Register.
- Client Alert
The staff of the Commodity Futures Trading Commission recently issued relief for certain exempt commodity pool operators that permits general solicitation and general advertising in connection with offerings of commodity pools.
In August 2014, the SEC adopted final rules under Regulation AB that substantially revise the offering process, disclosure and reporting requirements for offerings of ABS. More than four years after the SEC originally published its comprehensive "Regulation AB II" rule proposals, and after two partial re-proposals in 2011 and 2014, the final rules implement several key areas of reform but defer action on other significant aspects of the original proposals.
On September 3, 2014, the US banking agencies adopted final rules implementing a liquidity coverage ratio (LCR) requirement that will test a bank's ability to withstand liquidity stress periods. The specific objective of the LCR rules is to ensure that a bank has enough high quality liquid assets (referred to as HQLA) that can be immediately converted into cash to meet its liquidity needs for a 30-day stress period.
Chapman and Cutler hosted a regulatory update program on September 10, 2014, regarding the recently adopted final rules implementing Regulation AB II and the Liquidity Coverage Ratio.
- Chapman Sidebar
As prices for distressed loans have risen, holders of secured claims are focusing not only on the recovery of principal but also on repayment of interest, fees and pre-payment-premiums or “make whole” payments.
- Client Alert
The Securities and Exchange Commission is seeking comments on the first ever explicit “best execution” rule for municipal securities transactions proposed by the Municipal Securities Rulemaking Board.
This morning, September 3, 2014, the Federal Reserve Board adopted final regulations implementing the liquidity coverage ratio (LCR) requirement in the United States.
On September 3, 2014, the OCC, the Federal Reserve Board and the FDIC (collectively, the "Agencies") adopted final rules implementing revisions to the denominator measure for the supplementary leverage ratio.
The FDIC has announced an open meeting on September 3, 2014, at 2:00 p.m. Eastern time to vote on final regulations implementing the liquidity coverage ratio (LCR) and changes to the supplementary leverage ratio (SLR).
On August 27, 2014, in a 3-2 vote, the SEC approved final rules applicable to nationally recognized statistical rating organizations (NRSROs).
On August 27, 2014, the Federal Reserve Board announced that an open meeting will be held on September 3 to vote on final regulations implementing the liquidity coverage ratio (LCR) requirement in the United States
At an open meeting this morning, August 27, 2014, the SEC unanimously adopted final rules under Regulation AB that substantially revise the offering process, disclosure and reporting requirements for registered offerings of asset-backed securities (ABS).
- Client Alert
On August 18, 2014, the Municipal Securities Rulemaking Board released for public comment draft amendments the Proposed Amendments) to existing Rule G-37, which restricts “pay to play” practices by regulating certain activities by brokers, dealers and municipal securities dealers.
This evening, the SEC announced that it is holding an open meeting at 10:00 a.m. (EST) on Wednesday, August 27, 2014, to vote on adoption of Regulation AB II and additional Dodd-Frank implementing regulations.
- Chapman Sidebar
A Nebraska bankruptcy court recently upheld the longstanding principle that a creditor filing a proof of claim may seek the entire amount due despite amounts collected from other obligors who may be jointly and severally liable for the debt.
- Client Alert
Under the American Taxpayer Relief Act of 2012, qualified renewable energy generation facilities that began construction prior to January 1, 2014 are eligible to receive the renewable electricity production tax credit under section 45 of the Internal Revenue Code or, in lieu thereof, the energy investment tax credit under section 48 of the Code.
- Chapman Sidebar
All litigators have written the phrase: “Subject to and without waiving the foregoing objections, see documents attached hereto.” Despite its frequent use, this phrase may soon join the assemblage of overused and outdated legalese.
- July/August 2014
Three Chapman-authored articles were published in the July/August 2014 issue of Pratt's Journal of Bankruptcy Law.
- Client Alert
The Municipal Securities Rulemaking Board recently announced its intent to move forward with several actions aimed at enhancing price transparency for municipal securities.
- The Harvard Law School Forum on Corporate Governance and Financial Regulation
The Harvard Law School Forum on Corporate Governance and Financial Regulation posted an article based on a recent Chapman Sidebar.
- Client Alert
The SEC announced modifications to its Municipalities Continuing Disclosure Cooperation Initiative on July 31, 2014.
- July/August 2014 (Originally Published May 22, 2014)Pratt's Journal of Bankruptcy Law
Pratt's Journal of Bankruptcy Law republished a Chapman Client Alert.
- Client Alert
The Municipal Securities Rulemaking Board has released for public comment a revised draft of its proposed Rule G-42 on the duties of municipal advisors.
On July 23rd, the SEC adopted final amendments to Rule 2a-7 under the Investment Company Act of 1940.
- Chapman Sidebar
Given today’s low interest rate environment, the enforceability of make-whole provisions has been the subject of intense litigation as debtors seek to redeem and refinance debt entered into during periods of higher interest rates, and investors seek to maintain their contractual rates of return. This trend has come to the forefront most recently in two separate cases, one filed in Delaware and the other in New York.
In this issue:
- Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Periods
-
Mortgage Rules Update: Application of the Ability to Pay Rule
- Client Alert
On July 8, 2014, the Securities and Exchange Commission issued its first cease-and-desist order under its Municipalities Continuing Disclosure Cooperation initiative.
- Chapman Sidebar
The recent Chicago federal criminal trial of Cherron Phillips, a.k.a. “River Tali El Bey” has shed some public light on the “sovereign citizen” movement and their insidious practice of “paper terrorism” of filing false liens against public officials, judges, police officers, corporations and banks.
- Chapman Sidebar
In a much anticipated decision that could have significantly changed the landscape of our federal courts and agencies, the United States Supreme Court’s recent decision in Executive Benefits Ins. Agency, Inc. v. Arkison left the bankruptcy world in the status quo, leaving many of the larger constitutional issues unanswered.
In this issue:
- A Creditor May Obtain a Judicial Lien upon Distributions from a Trust
- Attorneys Beware! Executing a Proof of Claim May Be a Waiver of Privilege
- Lenders' Obligations under the Servicemembers Civil Relief Act
- The Harvard Law School Forum on Corporate Governance and Financial Regulation
A recent Chapman Insight on proxy advisory firms was posted by the Harvard Law School Forum on Corporate Governance and Financial Regulation.
- Journal of Passthrough Entities
A recent Chapman Client Alert was published in the May—June issue of the Journal of Passthrough Entities.
In this issue:
- CFPB Spring 2014 Supervisory Highlights
- CFPB Spring 2014 Rulemaking Agenda
- Changes to OCC Large Bank Supervisory Process
- Client Alert
On June 2, 2014, the United States Environmental Protection Agency issued a proposed a rule aimed at cuttingcarbon pollution from existing fossil-fuel fired power plants pursuant to President Obama’s Climate Action Plan.
- Client Alert
On May 2, 2014, the IRS released Notice 2014-33, offering transitional relief for the enforcement and administration of FATCA.
- Corporate Governance Quarterly Update
The 2014 proxy season, like previous seasons, has provided shareholders of public US companies with an opportunity to vote on a number of corporate governance proposals and director elections.
- Client Alert
In 2013, the Securities and Exchange Commission brought a number of enforcement actions in the municipal market that not only reinforced the agency’s commitment to regulating the municipal market, but also brought about a number of firsts for the SEC’s municipal securities enforcement program.
- Chapman Sidebar
A defaulting borrower and its guarantors, owing millions of dollars, claim that a series of emails sent to the lender’s attorney constitutes a legally binding settlement agreement to modify the loan agreement and to settle the matter for pennies on the dollar.
- Client Alert
On May 19, 2014, the Staff of the Office of Municipal Securities of the Securities and Exchange Commission issued additional guidance on the SEC’s registration rules for municipal advisors.
- Client Alert
The Municipal Securities Rulemaking Board recently announced the approval and effectiveness of its new fair-pricing rule. Amended MSRB Rule G-30 consolidates dealer fair-pricing obligations into a single rule on prices and commissions for principal and agency transactions in municipal securities.
- Client Alert
Two recent bankruptcy court decisions from the District of Delaware and Eastern District of Virginia raise serious concerns for secured lenders and purchasers of secured loans in the secondary market.
In this issue:
- Proposed Amendments to Mortgage Rules
- CFPB Fair Lending Report
- Update on City of Chicago Vacant Property Ordinance
- Client Alert
While the common law has long held that an individual is liable for those tortious acts he or she personally commits, the Illinois Appellate Court’s decision in Dass v. Yale, 2013 IL App. (1st) 122520, appears to insulate limited liability company members from liability for torts personally committed while acting within their role for the LLC, unless the articles of the organization contain a contrary provision and the member has consented in writing to adoption of the provision or to be bound to the provision.
- Client Alert
On February 18, 2014, the Federal Reserve issued the final version of new Regulation YY establishing “enhanced prudential standards” for large bank holding companies and large foreign banks operating in the United States.
- Client Alert
A bill that would allow a taxing district subject to the Property Tax Extension Limitation Law to seek referendum approval to increase its aggregate extension has passed the Illinois State Senate and is now being considered by the House of Representatives.
- Banking Regulatory Newsletter
In this issue:
- Unfair, Deceptive or Abusive Acts or Practices
- Remittance Transfer Rule
- CFPB Advisory Encourages Student Loan Borrowers to Request Co-Signer Release
- FFIEC Joint Statement - Distributed Denial-of-Service (DDoS) Cyber-Attacks
- Late Winter 2014Illinois Government Finance Officers Association Dispatch Newsletter
An article by Chapman partner Larry White was published in the Late Winter 2014 issue of IGFOA's Dispatch newsletter.
- Client Alert
As providers of utility service to federal government offices, most investor owned utility companies are “federal contractors” subject to the Equal Opportunity rules established and enforced by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs.
The Basel Committee on Banking Supervision released its final Supervisory Framework for Measuring and Controlling Large Exposures (Large Exposures Framework) today.
- Bank Regulatory Newsletter
In this issue:
- Garnishment of Accounts Containing Federal Benefit Payments
- Coming Up - Prepaid Card Fee Disclosures
- CFPB 2013 Consumer Response Annual Report
On April 8, the OCC, the Federal Reserve Board and the FDIC (collectively, the "Agencies") adopted a notice of proposed rulemaking (the "Proposed Rule") to implement revisions to the denominator measure for the supplementary leverage ratio ("SLR").
On April 8th, each of the OCC, the Federal Reserve Board and the FDIC (collectively, the "Agencies") voted to adopt a final rule that strengthens supplementary leverage ratio standards for large, interconnected U.S. banking organizations (the "Final Rule").
On April 7th, the Federal Reserve Board (the Board) announced that it intends to allow banking entities two additional one-year extensions to conform their ownership interests in and sponsorship of certain collateralized loan obligations (CLOs) covered by the Volcker Rule.
- Client Alert
The thought of more litigation can be intimidating, but through awareness of the process, working with your attorney to focus the issues, and analyzing the possibility of a recovery, the process can be mastered and work in your favor to turn your paper judgment into cash.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently filed proposed advertising rule changes with the Securities and Exchange Commission.
- Client Alert
On March 29, Governor Herbert signed into law 2014 Senate Bill 179, which amends various provisions of the Utah Procurement Code, Title 63G, Chapter 6a, Utah Code Annotated.
The FDIC has announced that the Board of Directors will meet in open session at 2:00 PM on April 8th to discuss, among other things, a notice of proposed rulemaking to implement revisions to the denominator measure for the supplementary leverage ratio (“SLR”).
Today, the SEC has extended the comment period on Regulation AB to April 28, 2014.
- Client Alert
Last month, the Sustainability Accounting Standards Board published its first standards calling for financial institutions to voluntarily collect, quantify and report data relevant to their environmental, social and governance performance.
- Client Alert
The Securities and Exchange Commission recently approved the Municipal Securities Rulemaking Board’s rule proposals that focus on fair dealing obligations of dealers in municipal securities.
- Municipal Restructuring News
The Court in the City of Detroit municipal bankruptcy proceeding has issued a decision granting the City’s motion to disband the Official Committee of Unsecured Creditors that had previously been appointed in the case by the U.S. Trustee.
- Client Alert
Both House Ways and Means Committee Chairman Dave Camp and President Obama have recently released proposed changes to certain pension and retirement plans in the Internal Revenue Code.
- Client Alert
The following is a summary of certain proposed changes to the Real Estate Investment Trust provisions of the Internal Revenue Code included in recent legislative proposals.
- Client Alert
Legislative proposals by House Ways and Means Committee Chair Dave Camp would expand the scope of the unrelated business taxable income rules so that state and local pension funds would be subject to tax on certain investment income, including, in some instances, income from investment funds.
- Client Alert
Recently proposed legislation would generally (i) require sale treatment when a C corporation elects to become a regulated investment company or transfers assets to a RIC, (ii) treat certain RIC shares as United States real property interests subject to tax by non-U.S. persons on disposition, and (iii) provide that RIC dividends received through foreign corporations would not be eligible for a dividends received deduction.
- Client Alert
On March 10, the Division of Enforcement of the Securities and Exchange Commission announced its Municipalities Continuing Disclosure Cooperation Initiative.
Plaintiffs in a recent California Federal district court decision and in lawsuits in process against large health care systems in four other jurisdictions have argued that the ERISA exemption for “church plans” should be limited to plans of actual churches.
- Client Alert
Both Representative Camp, Republican Ways and Means Committee Chair, and President Obama have recently released far reaching proposed changes to the U.S. taxation of cross-border financial transactions.
- Client Alert
The Tax Reform Act of 2014 intends to simplify and consolidate the individual taxation scheme by consolidating, changing, or eliminating a variety of current tax benefits and the tax rates.
- Client Alert
In March 2014, the U.S. Department of the Treasury released its general explanation of the tax proposals in the Obama administration’s proposed fiscal year 2015 budget.
- Client Alert
Federal income tax reform has been the subject of numerous congressional discussions and committee hearings over the last year.
- Client Alert
Legislative proposals by House Ways and Means Committee Chair Dave Camp would repeal the 4% LIHTC and change the way LIHTCs are allocated by the States.
- Bank Regulatory Newsletter
In this issue:
- Financial Literacy
- OCC Guidance Regarding Secured Consumer Debt Discharged in Bankruptcy
- Mortgage Rules Update
- Client Alert
On February 26, 2014, Representative David Camp, chair of the House Ways and Means Committee, released draft legislation referred to as the Tax Reform Act of 2014 that proposes to amend major portions of the Internal Revenue Code to provide for comprehensive tax reform.
On February 26, 2014, Representative David Camp, chair of the House Ways and Means Committee, released draft legislation referred to as the Tax Reform Act of 2014 that proposes to amend major portions of the Internal Revenue Code to provide for comprehensive tax reform.
- Client Alert
If your firm is a registered investment adviser that has never been examined by the Securities and Exchange Commission, you might want to prepare to see SEC examiners in the near future.
- Client Alert
Without reaching a consensual agreement with its various creditors, on Friday, February 21, 2014, the City of Detroit filed its Chapter 9 Plan for the Adjustment of Debts with the U.S. Bankruptcy Court for the Eastern District of Michigan.
Today, the SEC announced that it is re-opening the comment period on Regulation AB II to solicit further public comment on an approach to disseminate potentially sensitive asset-level data.
This afternoon, Commissioner Michael S. Piwowar released a Statement supporting the SEC's decision to re-open the comment period on Regulation AB II, noting that market practices have continued to evolve since the financial crisis and the importance of obtaining the most recent data and information possible to inform and guide the SEC's decision-making process.
- Client Alert
For the first time in its history the Municipal Securities Rulemaking Board has proposed a “best execution” rule for municipal securities transactions.
- The Banking Law Journal
The Banking Law Journal published a Chapman-authored article. The article outlines the reasons website disability access should be addressed by banks—not only as good business practice, but to mitigate litigation risk, reputational damage, regulatory enforcement action and the potential new Department of Justice regulations expanding the coverage of the Americans with Disabilities Act to websites.
- Bank Regulatory Newsletter
In this issue:
- Making a Virtual Bank ADA Compliant
- Incident Response Plan for Privacy and Data Security Breaches
- Telephone Consumer Protection Act Update
- FinCEN Issues New Guidance on Virtual Currencies
- Client Alert
The Securities and Exchange Commission recently published a notice seeking comments on the Municipal Securities Rulemaking Board’s rule proposal on fair pricing obligations of dealers in municipal securities.
- Client Alert
The staff of the Securities and Exchange Commission recently issued a no-action letter providing that brokers that facilitate certain merger and acquisition transactions of privately-held companies could receive transaction-based compensation without being required to register with the SEC as a broker-dealer.
- Client Alert
The right of a secured creditor to “credit bid” (i.e., to bid the amount of debt owed rather than cash) in a debtor’s sale of assets, once thought to be rock solid, is again under attack.
On February 12, 2014, 17 members of the House of Representatives Committee on Financial Services, including the chair, Maxine Waters, wrote a letter to the federal regulators implementing the Volcker Rule asking that interpretive guidance be issued with respect to the treatment of certain CLO debt securities.
The SEC has announced that it is removing Regulation AB II off the agenda for its February 5th open meeting.
- American Bankruptcy Institute Journal
Equity sponsors holding a controlling interest in a distressed portfolio company have sometimes purchased substantial amounts of the company’s debt in order to gain advantage or profit.
- Bank Regulatory Newsletter
In this issue:
- Mortgage Rules Update
- FFIEC Issues Final Guidance On Social Media
The SEC has announced that it is holding an open meeting at 3:00 pm on Wednesday, February 5th to adopt Regulation AB II.
- Client Alert
The January 17th proposed guidelines from the Office of the Comptroller of the Currency seeks to establish minimum standards for financial institutions to design and implement a Risk Governance Framework and standards for the oversight and participation by an institution’s board of directors and internal audit department.
- Pratt's Journal of Bankruptcy Law
Under current bankruptcy law, units of local government cannot voluntarily petition for municipal bankruptcy under Chapter 9 without express and specific authority from the state.
- Client Alert
With fixed income markets already in decline in May 2013, speculation regarding Federal Reserve action reached a pinnacle in the last half of June, sparking a bond market selloff of historic proportions.
- Client Alert
On January 9, 2014, the Municipal Securities Rulemaking Board proposed Rule G-42, defining the fiduciary duties of municipal advisors to municipal entity clients and the duties and responsibilities owed to all municipal advisory clients.
- Client Alert
On January 10, 2014, the Staff of the Office of Municipal Securities of the Securities and Exchange Commission released additional guidance on the SEC’s registration rules for municipal advisors in the form of responses to Frequently Asked Questions.
- Client Alert
The beginning of each year provides an opportunity for investment advisers to review annual compliance and regulatory matters, including issues related to private investment funds and commodity pools.
On January 14, 2014, five federal agencies approved an interim final rule to permit banks to retain certain collateralized debt obligations backed primarily by trust preferred securities (TruPS CDOs) from the investment prohibitions of the Volcker Rule.
- Client Alert
The IRS recently published final regulations concerning the new Medicare tax, imposed beginning with tax year 2013 at a rate of 3.8 percent on net investment income.
- Client Alert
Today the Securities and Exchange Commission announced that it is delaying until July 1, 2014 the compliance date of the recent final rule requiring registration of municipal advisors under the Dodd-Frank Act.
On January 12, 2014, the Basel Committee on Banking Supervision (BCBS) issued a consultative document proposing revisions to the Net Stable Funding Ratio (NSFR) under Basel III.
On January 12, 2014, the Basel Committee on Banking Supervision published guidance to assist national banking supervisions in implementing the liquidity ratio requirement (LCR) under Basel III.
On January 12, 2014, the Basel Committee on Banking Supervision issued final requirements for banks' disclosures relating to the liquidity coverage ratio.
- Client Alert
The Securities and Exchange Commission has released interpretive guidance on the final rules for the registration of municipal advisors.
- Client Alert
The Municipal Securities Rulemaking Board has released its proposed rule on the duties of municipal advisors.
- Client Alert
In accordance with provisions of the Jumpstart Our Business Startups Act, enacted in 2012, the staff of the Securities and Exchange Commission recently published a report on its review of disclosure requirements under SEC Regulation S-K.
Industry participants are concerned that the Volcker Rule's prohibition of banks acquiring or retaining "ownership interests" of CLO covered funds will prohibit banks from owning rated debt securities that include the right to replace the collateral manager for cause and appoint a replacement.
- The Harvard Law School Forum on Corporate Governance and Financial Regulation
A Chapman Insights article was posted by the Harvard Law School Forum on Corporate Governance and Financial Regulation.
- Illinois Banker
Technology continues to take an expanded role in banking and the way consumers and businesses manage their money and lives.
- Client Alert
Federal regulators approved final regulations implementing the “Volcker Rule” on December 10, 2013.
- Client Alert
In Anderson v. Krafft-Murphy Company, Inc., the Delaware Supreme Court held, inter alia, that (1) contingent contractual rights such as insurance policies may be considered the “property” of a dissolved corporation so long as such rights are capable of vesting and (2) that the Delaware General Corporation Law does not impose a generally applicable statute of limitations that would time-bar claims against a dissolved corporation. The Court reversed the holding of the Chancery Court of the State of Delaware that the relevant dissolution provisions of the DGCL operate to extinguish a dissolved corporation’s liability after ten years from the date of dissolution.
- Client Alert
Recent legislative tax reforms proposed by Senate Finance Committee Chairman Max Baucus could have far reaching tax and other economic consequences to many holders of interests in real estate and tangible personal property, whether as investors, lessors, or other business users.
Congressional budget negotiators have agreed on a budget proposal to avoid another looming government shutdown. The budget proposal would increase discretionary spending for fiscal years 2014 and 2015, but would not affect the mandatory sequester amounts for Build America Bonds (BABs) (including Recovery Zone Economic Development Bonds (RZEDBs)) and other direct pay bonds, such as Qualified Zone Academy Bonds (QZABs), Qualified School Construction Bonds (QSCBs), Qualified Energy Conservation Bonds (QECBs) and New Clean Renewable Energy Bonds (NCREBs), for fiscal years 2014 and 2015.
- Client Alert
On November 22, 2013, Duke Energy Renewables, Inc., a subsidiary of Duke Energy Corp., plead guilty to criminal charges for violating the Migratory Bird Treaty Act in connection with the deaths of protected birds at its “Campbill Hill” and “Top of the World” wind farm projects in Converse County, Wyoming.
- Chapman Insights
Companies today are being called upon by their shareholders and other stakeholders to not only boost the bottom line, but also to help address some of the country’s most challenging problems, including those concerning economic development and the environment.
- Client Alert
Institutional Shareholder Services Inc., a leading provider of proxy advisory and corporate governance services, recently released 2014 updates to its U.S. corporate governance policies.
- Client Alert
Under current bankruptcy law, units of local government cannot voluntarily petition for municipal bankruptcy under Chapter 9 without express and specific authority from the state.
- Client Alert
The SEC’s final municipal advisor registration rules will become effective on January 13, 2014. The SEC rules have created controversy within the municipal bond community about whether an underwriter will continue to be able to visit clients and pitch ideas without being prohibited from underwriting a resulting bond issue under MSRB Rule G-23.
- Chapman Insights
The majority of power generated in the United States historically has been, and continues to be, generated by large-scale, centrally located generation facilities.
- Client Alert
The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance to clarify the obligations of registered investment companies when using fund names that suggest safety or protection from loss.
- Client Alert
The SEC’s final municipal advisor registration rules will be published in the Federal Register on November 12, 2013, with an effective date of January 13, 2014.
- Client Alert
On November 5, 2013, the Securities and Exchange Commission charged the Greater Wenatchee Regional Events Center Public Facilities District, a municipal issuer in the State of Washington, a staff member of the District, a private developer and the president of the Developer with misleading investors in connection with a 2008 offering of Bond Anticipation Notes.
- Bank Regulatory Newsletter
In this issue:
- OCC Guidance on Third-Party Risk Management “Life Cycle”
- Interagency Statement on Fair Lending
- Mortgage Rules Update: CFPB Guidance and Interim Final Rule for Certain Mortgage Servicing Rules
- Client Alert
The Government Finance Officers Association recently published a statement of best practices for the use of bank loans (broadly defined as fixed-rate loans with defined maturities and variable rate loans or lines of credit with flexible payment provisions) by state and local governments.
- Client Alert
On October 24, 2013, the Board of Governors of the Federal Reserve Board released a proposed rule that introduces a liquidity coverage ratio requirement that will test a bank's ability to withstand "liquidity stress periods."
- Client Alert
The Securities and Exchange Commission recently published a Notice of Filing of a Proposed Rule Change in the Federal Register, seeking comments on the Municipal Securities Rulemaking Board’s recent rule proposals that focus on fair dealing obligations of dealers in municipal securities.
- Client Alert
On October 4, 2013, a Chicago bankruptcy court judge decided a case which establishes favorable precedent for the securitization market.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently issued a report providing general observations, commentary and descriptions of effective practices in the area of broker-dealer firms’ conflicts management practices.
- Guidance and Issues for Participants in Municipal Securities Transactions
On September 18, 2013, the Securities and Exchange Commission unanimously approved final rules for the registration of municipal advisors under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
- Client Alert
On September 13, the Securities and Exchange Commission issued a cease and desist order against Public Health Trust of Miami-Dade County, which operates Jackson Health Systems, one of the largest hospital systems in the United States.
- Financial Fraud Law Report
Chapman's August 15 Client Alert on PCAOB proposed new auditing standards was published in the October 2013 issue of Financial Fraud Law Report.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently issued Regulatory Notice 13-31 summarizing the typical approach of FINRA examinations on suitability compliance and highlighting effective practices used by member firms to meet suitability obligations under FINRA Rule 2111.
- Client Alert
The Internal Revenue Service Office of Tax Exempt Bonds has announced a new sequester reduction in amounts paid to issuers of direct pay bonds for which issuers elected to receive a direct payment from the U.S. Treasury pursuant to Section 6431 of the Internal Revenue Code.
- Client Alert
The Municipal Securities Rulemaking Board recently filed several rule proposals with the Securities and Exchange Commission that focus on fair dealing obligations of dealers in municipal securities.
- Client Alert
In today’s mobile society, individuals change their place of residence for a number of reasons: a new job opportunity, a new place for treatment or care, retirement or simply a desire for a change in life.
- Client Alert
Pursuant to the American Taxpayer Relief Act of 2012, qualified facilities that begin construction before January 1, 2014 will be eligible to receive the renewable electricity production tax credit under section 45 of the Internal Revenue Code or, in lieu thereof, the energy investment tax credit under section 48 of the Code.
- Client Alert
On September 20, 2013, the Environmental Protection Agency proposed regulations aimed at reducing carbon pollution from new fossil-fuel power plants.
- Client Alert
On September 18, 2013, the Securities and Exchange Commission adopted final rules for registering municipal advisors.
- Client Alert
On September 18, 2013, in accordance with provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Securities and Exchange Commission proposed an executive compensation disclosure rule that, if adopted, will require public companies to calculate and disclose in certain SEC filings (1) the median annual total compensation of all employees of the company, excluding the chief executive officer, (2) the annual total compensation of the company’s CEO and (3) the ratio of those two figures, such figures and ratio hereinafter referred to collectively, as the CEO pay ratio.
- Chapman Insights, originally published in Bloomberg Brief
The market for distressed investment opportunities in the U.S. has shrunk considerably over the last few years. As a result, U.S. hedge funds have looked to Europe, but they have been disappointed by the minimal and highly selective opportunities.
- Regulatory Update
On August 28, 2013, the Joint Regulators issued a comprehensive re-proposal of the risk retention rules required under Section 941 of Dodd-Frank.
- Client Alert
Today the IRS published, in the Federal Register, proposed arbitrage regulations that are applicable to tax-exempt bonds and other tax-advantaged bonds (such as certain tax credit bonds, including qualified zone academy bonds).
- Bank Regulatory Newsletter
In this issue:
- Foreign Branch Deposits: FDIC Insurance and Depositor Preference
- Business Lending: Compliance with the Spousal Guaranty Provisions of the Equal Credit Opportunity Act
- Payroll Cards
- Fannie and Freddie Exempt from Chicago Ordinance
- Client Alert
On August 28, 2013, the Joint Regulators issued a comprehensive re-proposal of the risk retention rules required under Section 941 of Dodd-Frank.
- Client Alert
The Securities and Exchange Commission recently lifted the longstanding prohibition against using general solicitation and general advertising in certain private offerings of securities, as mandated by the Jumpstart Our Business Startups Act.
- Client Alert
Governor Patrick Quinn recently signed into law Senate Bill 56, which requires those acquiring foreclosed residential property to honor existing leases or give tenants adequate time to make a safe move.
- Bank Regulatory Newsletter
In this issue:
- Update on Telephone Consumer Protection Act Rules and Recent Cases
- Update on Fair Lending and Indirect Auto Lending
- Mortgage Rules Update
- Client Alert
The Securities and Exchange Commission, Commodity Futures Trading Commission and Financial Industry Regulatory Authority recently compiled a set of best practices and lessons learned on business continuity plans and disaster recovery procedures and released an advisory summarizing those findings.
- Client Alert
The Municipal Securities Rulemaking Board recently requested comment on proposed rule changes that would consolidate the registration requirements of brokers, dealers, municipal securities dealers and municipal advisors into a single rule.
- Client Alert
In an attempt to mitigate damages to tenants and communities as a result of foreclosures, improve rental property and prevent occupied properties from becoming vacant after foreclosures, the City of Chicago has promulgated the Protecting Tenants in Foreclosed Property Ordinance, effective September 3, 2013.
- Client Alert
The staff of the Securities and Exchange Commission recently announced that it would not require advisers of private investment funds to hold non-transferable stock certificates or certificated LLC interests obtained in a private placement with a “qualified custodian” under the Investment Advisers Act of 1940 custody rule.
- Spring 2013Municipal Finance Journal
States play an important role in assisting municipalities in times of financial distress. Traditionally, states have attempted to supervise local government financing and limit volatility through the enactment of debt limitations and laws that permit the refunding of municipal obligations.
- Client Alert
On June 5, 2013, the SEC proposed certain amendments to Rule 2a-7, which is the primary rule governing money market mutual funds under the Investment Company Act of 1940.
- Client Alert
The Commodity Futures Trading Commission recently adopted final rules regarding compliance obligations for commodity pool operators of investment companies registered under the Investment Company Act of 1940.
- Client Alert
On August 13, 2013, the Public Company Accounting Oversight Board proposed two auditing standards aimed at increasing the informational value of the audit report to promote the usefulness and relevance of the audit and the related audit report.
The Municipal Securities Rulemaking Board recently requested comment on whether to require dealers to seek “best execution” of customer orders for municipal securities and provide detailed guidance to dealers on how best execution concepts would be applied to municipal securities transactions.
- Client Alert
The Municipal Securities Rulemaking Board recently requested public comment on a consolidated fair pricing rule. The rule change would consolidate the requirements of current MSRB Rule G-18, Rule G-30 and related interpretive guidance into a single general fair pricing rule, Rule G-30. The MSRB proposal seeks to preserve the substance of the existing fairpricing requirements.
- Client Alert
The Securities and Exchange Commission recently adopted amendments to the broker-dealer annual reporting, audit and notification requirements of Rule 17a-5 under the Securities Exchange Act of 1934.
- Client Alert
The Securities and Exchange Commission recently adopted amendments to the broker-dealer net capital rule, customer protection rule and related rules under the Securities Exchange Act of 1934.
- Client Alert
In a recent regulatory notice, the Financial Industry Regulatory Authority, Inc. provided guidance on disclosure of fees in communications concerning retail brokerage accounts and IRAs.
- Bank Regulatory Newsletter
In this issue:
- OCC Issues Statement on Oversight of Debt Collection and Debt Sales
- Banking Regulators Encourage Financial Institutions to Work with Troubled Student Loan Borrowers
- Actions on Internet Lending
- SEC Charges School District and its Underwriter for Continuing Disclosure and Due Diligence FailuresClient Alert
On July 29, 2013, in the first case of its kind, the Securities and Exchange Commission charged West Clark Community Schools, an Indiana school district, with falsely stating in an official statement that the school district was fully compliant with its duty to provide annual financial reporting and material event notices as required by prior continuing disclosure undertakings.
- Client Alert
On July 29, 2013, Governor Quinn signed into law House Bill 2418, as amended by Senate Amendments 2 and 3; Public Act 98-0115. The Act makes several changes to the Election Code, two of which are discussed in this client alert.
- Client Alert
The US banking regulators have issued final Basel III-related capital rules.
- Client Alert
On July 19, 2013, the Securities and Exchange Commission filed a Complaint in the U.S. District Court for the Southern District of Florida, charging the City of Miami and the its former Budget Director with violations of the anti-fraud provisions of the federal securities laws. The SEC also charged the Budget Director with aiding and abetting violations.
- Client Alert
On July 12, 2013, the IRS released Notice 2013-43 postponing the start of FATCA withholding by six months, to June 30, 2014. Also, certain jurisdictions will be treated as having an effective IGA, even though that IGA may not actually have entered into force.
- Bank Regulatory Newsletter
In this issue:
- Illinois Firearms Concealed Carry Act
- FinCEN Eases CTR Reporting Requirements for Certain Armored Car Deposits
- Debt Collection Activity and UDAAP
The Internal Revenue Code requires issuers of qualified zone academy bonds to spend 100 percent of the sale proceeds and investment earning thereon for qualified purposes within three years of the date of issuance of the QZABs.
- Bank Regulatory Newsletter
In this issue:
- FRB Guidance on Communication of Supervisory Findings
- Mortgage Rules Update
- Client Alert
On July 2, the Board of Governors of the Federal Reserve System adopted a final rule revising its risk-based and leverage capital requirements. The changes to the Advanced Approaches framework will be effective January 1, 2014 and the new Standardized Approach framework will be effective January 1, 2015. While we are still in the process of reviewing the rule and the release (it totals 971 pages), our initial impressions of the securitization sections of the rule are set forth in this client alert.
- Bank Regulatory Newsletter
In this issue:
- Rule Governing Garnishment of Deposit Accounts Containing Federal Benefit Payments
- Updates to the Mortgage Rules
- Senate Hearing on Private Student Loans
- Client Alert
The IRS recently released on its website Tax Exempt Bonds’ Publication 5091, Voluntary Compliance for Tax-Exempt and Tax Credit Bonds. Part one of the publication is an introduction to tax-advantaged bond compliance, intended to help issuers of tax-advantaged bonds comply with related Federal tax law requirements. Part two is a summary of the Tax Exempt Bonds’ Voluntary Closing Agreement Program (TEB VCAP).
- Client Alert
On June 13, 2013, eight former members of the board of directors overseeing five registered investment companies advised by Morgan Keegan Asset Management, Inc. settled with the Securities and Exchange Commission, accepting a cease-and-desist order to cease committing certain violations of the federal securities laws stemming from inadequacies in the Funds’ fair valuation procedures.
- Client Alert
In 2012 the Commodity Futures Trading Commission significantly narrowed the CFTC Rule 4.5 exclusion from the definition of commodity pool operator available to operators of investment companies registered under the Investment Company Act of 1940.
- Client Alert
House Bill 2418, as amended by Senate Amendments 2 and 3, has passed both houses of the General Assembly and awaits action by the Governor. The Bill makes several changes to the Election Code, two of which are discussed in this alert.
- Client Alert
On June 11, 2013, the Financial Industry Regulatory Authority released the Investor Alert Alternative Funds are not your Typical Mutual Funds as a part of efforts to raise investor awareness regarding registered funds that use investment strategies that differ from the typical buy-and-hold investment strategies.
- Client Alert
FINRA recently posted a targeted examination letter to its website related to social media communications. Broker-dealers that receive the sweep letter are required to provide certain information to FINRA relating to their use and supervision of social media communications.
- Bank Regulatory Newsletter
In this issue:
- American Bankers Association and Others Request Guidance on the New Mortgage Lending Rules and Fair Lending
- CFPB Study on Overdraft Programs
- Mandatory Arbitration
- CFPB Update on Mortgage Rules
- Client Alert
In SIGA Technologies, Inc. v. PharmAthene, Inc., the Delaware Supreme Court held that under Delaware law agreements to negotiate in good faith in accordance with the terms set forth in a term sheet are enforceable.
- Client Alert
The Division of Clearing and Risk of the Commodity Futures Trading Commission recently issued no-action relief for certain treasury affiliates within non-financial companies from the clearing requirements of Section 2(h)(1) of the Commodity Exchange Act.
- Bank Regulatory Newsletter
in this issue:
- Checking Account Disclosures, Overdraft Practices and Dispute Resolution
- FDIC Settlements for Unfair and Deceptive Practices related to Reloadable Prepaid Cards
- CFPB Guidance on Refinancing Student Debts
- Bank Regulatory Newsletter
In this issue:
- CFPB Amends Regulation Z to Help Enable Stay-at-Home Spouses/Partners to Qualify for Credit Cards
- Federal Reserve Board issues Guidance on Mortgage Collection, Loss Mitigation and Foreclosures
- CFPB Amends Regulation Z Ability-to-Repay Rule
- The Banking Law Journal
Chapman's March 8 Client Alert on ABCP short-term structured financing was published in the May 2013 issue of The Banking Law Journal.
- Client Alert
On May 22, 2013 the Securities and Exchange Commission imposed a Cease-and Desist Order against the City of South Miami, Florida for violations of the anti-fraud provisions of Section 17(a) of the Securities Act of 1933.
- Client Alert
House Bill 983, as amended by Senate Amendments 1 and 2, amends the alternate bond provisions contained in the Local Government Debt Reform Act of the State of Illinois for alternate bonds payable solely from enterprise revenues. “Enterprise revenues” means the revenues of a utility or revenue producing enterprise from which revenue bonds may be payable.
- Client Alert
Beginning June 10, 2013, many securitization issuers could be required to submit newly executed interest rate swaps for clearing under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and implementing regulations.
- Client Alert
The Commission’s recent Cease-and-Desist Order against the City of Harrisburg found that post-issuance financial information made available by the City and public statements made by City officials contained material misstatements and omissions, and violated the antifraud provisions of the federal securities laws.
- Bank Regulatory Newsletter
In this issue:
- COPPA FAQS and Effective Date of the Revised COPPA Rule
- Update on Cell Phone Numbers and the Express Consent Requirement under the TCPA
- Bank Regulatory Newsletter
In this issue:
- Final Remittance Transfer Rule
- CFPB Rules on Gift Cards and Unclaimed Property Laws in Maine and Tennessee
- Prohibition on Financing Credit Insurance Premiums
- Mortgage Rules Update
- Bank Regulatory Newsletter
In this issue:
- Revision to Guidance on Community Reinvestment
- CFPB Enforcement Action Under RESPA
- New York and Massachusetts Use New Tool to Protect Consumers from Payday Loans
- Client Alert
The current suspension of the national debt limit expires on May 19. Accordingly, unless the debt limit is raised, the Bureau of Public Debt may be unable to issue SLGS after May 19, 2013.
- Bank Regulatory Newsletter
In this issue:
- Interagency Guidance on Leveraged Lending
- Fair Lending and Indirect Auto Lending
- Elimination of Sticker Disclosure Requirement at Automated Teller Machines
- Client Alert
On January 29, 2013, House Bill 983 was introduced in the General Assembly.
- Client Alert
The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance to clarify the obligations of certain investment companies to file for review communications posted on social media sites and in other interactive communications where such communications are not required to be filed with the Financial Industry Regulatory Authority.
- Client Alert
In this issue:
Federal Subsidies to Issuers of Build America Bonds and Direct Pay Tax Credit Bonds Are Being Reduced by Sequestration
IRS Releases Tax Exempt Bonds FY 2013 Work Plan
IRS Releases Report on Avoiding Troubled Tax-Advantaged Bonds
IRS Releases New Voluntary Closing Agreement Program Request Form
Have You Adopted Post-Issuance Compliance Procedures?
- Bank Regulatory Newsletter
In this issue:
- Student Loan Servicers to Be Supervised by the CFPB
- FTC Updates “Dot Com Disclosures”
- Client Alert
One of the last steps in the foreclosure process in Illinois, after a judgment of foreclosure has been obtained and the real property has been sold at auction in a judicial sale, involves obtaining a court order approving and confirming the sale.
- Bank Regulatory Newsletter
In this issue:
- Corporate Governance and BSA/AML Compliance
- Client Alert
In 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act gave the Securities and Exchange Commission the power to adopt rules providing for a “harmonized” standard of conduct for broker-dealers and investment advisers when they provide advice to retail customers.
- Client Alert
The Municipal Securities Rulemaking Board recently proposed a major revision of MSRB Rule G-19 (Suitability of Recommendations and Transactions). The proposal would harmonize Rule G-19 with the general broker-dealer suitability obligation under Financial Industry Regulatory Authority, Inc. Rule 2111 which became effective in July 2012.
- Client Alert
This client alert discusses asset backed commercial paper, developed in the early 1980s as a means for banks to provide their customers with cost-efficient money market financing of trade receivables, lease receivables and similar commercial assets, and the most significant issues now facing the traditional ABCP market.
- Bank Regulatory Newsletter
In this issue:
- Unearned Discount Points
- New Mortgage Foreclosure Rules in Illinois
- Cybersecurity and Reputational Risk
- Client Alert
The staff of the Securities and Exchange Commission recently issued a Risk Alert announcing that it has observed widespread compliance deficiencies related to Rule 206(4)-2 under the Investment Advisers Act of 1940.
- Client Alert
As set forth in our Client Alert dated March 4, 2013, President Obama recently issued an order that authorized certain automatic cuts to federal spending. President Obama issued the order under a “sequestration” law previously enacted by Congress.
- Client Alert
On March 1, 2013, President Obama issued an order for certain automatic cuts to federal spending. President Obama issued the order under a “sequestration” law previously enacted by Congress.
- Government Finance Review
The ability of state and local governments to incur debt in order to finance structure, or other essential governmental services is well established and fundamental to their basic operation.
- Client Alert
If Congress does not act soon to postpone or avoid automatic cuts to federal spending, the federal government may implement certain automatic spending cuts under a “sequestration” law previously enacted by Congress.
- Client Alert
The Internal Revenue Service generally requires issuers (or their agents) to file Form 1097-BTC, Bond Tax Credit, for each tax credit provided by the following tax credit bonds: (i) Clean Renewable Energy Bonds, (ii) New Clean Renewable Energy Bonds, (iii) Qualified Energy Conservation Bonds, (iv) Qualified Zone Academy Bonds and (v) Qualified School Construction Bonds.
- Bank Regulatory Newsletter
In this issue:
- Mobile Privacy Disclosures: Building Trust Through Transparency Federal Trade Commission Staff Report
- Corporate Account Takeover
- CFPB Issues Guidance on Mortgage Servicing Transfers
- Client Alert
On January 17, 2013, the IRS released the long-awaited final regulations under Code §§ 1471-1474, generally referred to as the Foreign Account Tax Compliance Act provisions.
- Client Alert
The Internal Revenue Service has announced that it will begin to include questions concerning post-issuance compliance procedures and the implementation of such procedures in the information document requests that it sends to issuers of tax-exempt and tax-advantaged bonds.
- Bank Regulatory Newsletter
The Consumer Financial Protection Bureau released its final loan originator compensation rule implementing certain provisions of the Dodd-Frank Wall Street Reform Act.
- Client Alert
On February 8, 2013, the governor of the State of Illinois signed into law legislation amending the Illinois Conveyances Act providing that the provisions regarding the form of a mortgage are, and have always been, permissive.
- Bank Regulatory Newsletter
In this issue:
- Important Changes for Business Associates to the Privacy, Security, Breach Notification and Enforcement Rules Implementing Health Insurance Portability and Accountability Act
- CFPB Seeks Information on Financial Products Marketed to Students
- In re Crane: An Update
- To the Point!
The Consumer Financial Protection Bureaui ssued its final mortgage servicing rules under the Truth in Lending Act and the Real Estate Settlement Procedures Act.
- Client Alert
In 2012 the Commodity Futures Trading Commission significantly narrowed the CFTC Rule 4.5 exclusion from the definition of commodity pool operator available to operators of investment companies registered under the Investment Company Act of 1940.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently issued a revised proposal to consolidate its rules governing markups, markdowns, commissions and fees. FINRA originally published a rule proposal in March 2011 that would consolidate and materially revise several NASD and NYSE rules.
- Client Alert
On January 7, 2013, the Basel Committee on Banking Supervision (Committee) issued major revisions to the “liquidity coverage ratio” (LCR) it published in 2010.
- Bank Regulatory Newsletter
In this Issue:
- FFIEC Proposed Guidance on Social Media
- Mortgage Servicing Rules
- Mandatory Escrow Accounts for Higher-Priced Mortgages
- Bank Regulatory Newsletter
The Consumer Financial Protection Bureau’s new Ability-to-Repay and Qualified Mortgage Standards Rule is lengthy and complicated. It is not a disclosure rule but instead requires a creditor to revise loan products and its origination and underwriting practices, including compensation to its employees and third party loan originators. Following is a summary of significant parts of the Rule. The Rule provides compliance options, each which should be analyzed based on the creditor’s customers and its operational capabilities.
- Chapman Client Alert
The beginning of each year provides an opportunity for investment advisers to review annual compliance and regulatory matters, including issues related to private investment funds and commodity pools. This alert briefly summarizes some of the primary issues that advisers might consider in their 2013 annual review and update processes. Many of these issues apply to unregistered advisers as well as registered advisers.
- Bank Regulatory Newsletter
In this issue:
- Ability to Repay and Qualified Mortgage Rule
- Illinois Consumer Installment Loan Act and Payday Loan Reform Act Amendments
- CFPB and Five States Bring Action Against Debt Relief Service Provider
- Deposit Account Disclosures
- Bank Regulatory Newsletter
In this issue:
- Remittance Transfer Rule
- Request for CARD Act Comments
- Project Catalyst and the Trial Disclosures Program
- Client Alert
On December 18, 2012 the Basel Committee on Banking Supervision published a consultative document entitled “Revisions to the Securitisation Framework.” The paper contains the Committee’s proposed revisions to the securitization framework following its “fundamental review” of the existing framework.
- Client Alert
In a brief, unanimous decision released this week, the Supreme Court clarified in its decision in Los Angeles County Flood Control District v. Natural Resources Defense Counsel, Inc., Case No. 11-460, that the "flow of water from an improved portion of a navigable waterway into an unimproved portion of the very same waterway does not qualify as a discharge of pollutants" under the Clean Water Act.
- Chapman Client Alert
Late in the evening of January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012, avoiding the tax portion of the so-called “fiscal cliff.” President Obama signed ATRA into law on January 2, 2013.
- Chapman Client Alert
After several years of proposed changes to the rules governing broker-dealer communications with the public, the Financial Industry Regulatory Authority, Inc. announced in June 2012 that the final, modified rule will be effective as of February 4, 2013. FINRA received a number of questions since the announcement and recently released additional guidance on the Advertising Regulation page of its website. This Client Alert summarizes several of the issues addressed in the latest guidance.
- Bank Regulatory Newsletter
In this issue:
- Advertising Rewards
- In re Crane: An Update
- FTC Revises the Children’s Online Privacy Protection Rule
- Chapman Clint Alert
By letter dated December 7, 2012, the Division of Swap Dealer and Intermediary Oversight of the Commodity Futures Trading Commission released interpretive guidance significantly expanding the scope of its October 11, 2012 interpretive letter. The October 11 Letter confirmed that securitization vehicles that satisfy five criteria, including a requirement that they operate consistent with either Regulation AB or Rule 3a-7 under the Investment Company Act of 1940, should not be “commodity pools” as a result of holding a swap nor should their operators be required to register as “commodity pool operators” under the Commodity Exchange Act and CFTC rules.
- Chapman Client Alert
New Financial Industry Regulatory Authority, Inc. rules governing broker-dealer “know your customer” and suitability obligations (FINRA Rules 2090 and 2111) became effective July 9, 2012. FINRA recently issued additional guidance on the scope of the terms “customer” and “investment strategy”. FINRA also recently created a suitability website that aggregates questions and answers with respect to FINRA Rule 2111. This Client Alert summarizes the issues addressed in the latest guidance.
- Bank Regulatory Newsletter
In this issue:
- Debt Collection
- Mortgage Banking
- Expiration of the Temporary Unlimited Deposit Insurance Coverage of Noninterest-Bearing Transaction Accounts
- 2013 Dollar Annual Threshold Adjustments
- Chapman Client Alert
In This Issue: Expenditure of Build America Bond Proceeds on Bond Insurance Is a Capital Expenditure, IRS Revises Instructions to Form 8038-G, Treasury’s 2012-2013 Priority Guidance Plan
- Client Alert
A recent ruling from the federal district court in Minnesota reinforces the idea that an employer needs to take active steps to assure that an employee does not take otherwise confidential or privileged documents when the employee leaves the company, or the confidentiality or privilege is likely to be waived. In today’s world of electronically stored information and documents, this becomes increasingly difficult.
- Bank Regulatory Newsletter
In this issue:
- General Purpose Reloadable Pre-paid Cards
- “Commercially Reasonable” Online Banking Security Procedures
- Servicemember’s Civil Relief Act Updates
- Chapman Client Alert
Earlier this month, the Treasury published its 2012-2013 Priority Guidance Plan for the twelve-month period from July 2012 through June 2013. The 2012 - 2013 Priority Guidance Plan represents projects the Treasury and the Internal Revenue Service intend to work on actively during the twelve month period covered by the plan, but does not place any deadline on completion of such projects. The Treasury intends to periodically update and republish the 2012-2013 Priority Guidance Plan during the plan year to reflect additional items that the Treasury publishes during the plan year. Section references below are to the Internal Revenue Code.
- Dispatch
Brent Feller and Anjali Vij wrote an article entitled Employee Costs Related to Capital Projects, Can you Finance Them with Tax-exempt Bond Proceeds?, which was recently published in the October issue of the Dispatch, from the Illinois Government Finance Officers Association.
- Publications
This Country Survey aims to provide a balanced view of the equipment finance and leasing market in the US. Although the economic background is universally well documented, some brief indicators are provided regarding the conditions for business.
- Client Alert
By letter dated October 11, 2012, the Division of Swap Dealer and Intermediary Oversight of the Commodity Futures Trading Commission 1 released interpretive guidance confirming that certain securitization vehicles should not be included within the definition of “commodity pool” and that operators of such vehicles should not be included within the definition of “commodity pool operator” under the Commodity Exchange Act and CFTC rules. Separately, in a no-action letter dated October 11, 2012, the Division conditionally extended the deadline for registration as a commodity pool operator from October 12, 2012 to December 31, 2012 for vehicles that are commodity pools solely by virtue of their involvement with swaps.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently issued a revised rule proposal to address debt research conflicts of interest. FINRA originally published a concept proposal on debt research in March 2011 followed by a formal rule proposal in February 2012. FINRA now seeks comment on a revised rule proposal that includes amended exemptions for research distributed to certain institutional investors and for firms with limited principal debt trading activity. The revised proposal also includes other changes in response to comments on the prior proposal.
- Client Alert
In this issue:
1. Treasury Report Highlights Increased Bond Examination Activity by the IRS
2. Possible Cuts to Federal Subsidies for Build America Bonds and Tax Credit Bonds
3. Management of Electric Transmission and Distribution System Does Not Result in Private Business Use - Client Alert
On August 10th, the Governor signed into law two bills (former HB 4662, now Public Act 97-0920, and former HB 4663, now Public Act 97-0921), making Illinois one of a growing number of states with statutes that address trust decanting and directed trusts. The new statutes will go into effect January 1, 2013. This client alert covers the trust decanting statute. Our prior client alert addressed the directed trust statute.
- Client Alert
On Friday, September 14, 2012, the Office of Management and Budget sent a report to Congressional lawmakers discussing major cuts in federal payments to issuers of Build America Bonds and other direct-pay bonds that will have to be made if Congress is forced to make $1.2 trillion in across-the-board cuts to the federal fiscal 2013 budget under the Congressionally- mandated sequestration process.
- Client Alert
The Securities and Exchange Commission recently proposed rules to eliminate the prohibition against general solicitation and general advertising in securities offerings conducted in reliance on Rule 506 of Regulation D and Rule 144A under the Securities Act of 1933, as directed by the Jumpstart Our Business Startups Act. The proposed rules are intended to create increased opportunities for private companies, including private funds, to reach a larger and broader potential investor audience. Comments on the proposed rules are due by October 5, 2012.
- Client Alert
The U.S. Treasury recently released a report from the Treasury Inspector General for Tax Administration that states that the Internal Revenue Service more than doubled the number of bond examinations conducted per year from the number of examinations it conducted during previous reporting periods.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently announced the new FINRA Rule 5123 will be effective December 3, 2012. The new rule requires FINRA member firms to file copies of any offering documents used in non-public offerings of securities. The new rule includes several key exemptions, such as offerings solely to certain institutional investors, very high net worth individuals and employees as well as offerings made pursuant to Rule 144A under the Securities Act of 1933.
- Bank Regulatory Newsletter
In this issue:
- Using Customer Cell Phone Numbers
- Collection
- Payments Using Mobile Devices
- Arbitration
- Client Alert
On August 10th, the Governor signed Public Act 97-0921 (former HB 4662 and 4663) making Illinois one of a growing number of states with statutes that address directed trusts and trust decanting. These new statutes will go into effect January 1, 2013. This client alert covers the directed trust statute.
- Client Alert
On June 22, 2012, the Second District Illinois Appellate Court entered a ruling affirming the judgment of the DuPage County Circuit Court awarding summary judgment in favor of Elgin Community College District No. 509, thereby striking down plaintiffs!/tax objectors! allegations that the District had issued certain of its bonds at excessive interest rates and with an unlawful premium.
- Client Alert
The Municipal Securities Rulemaking Boards Interpretative Guidance on Underwriter Fair Dealing Obligations contained in Notice 2012-25 will become effective for bonds sold on or after August 2, 2012. The Notice imposes expansive code of conduct and disclosure requirements on underwriters of municipal securities under the “fair dealing” provisions of MSRB Rule G-17, which provides in pertinent part:
“In the conduct of its municipal securities activities, each broker, dealer and municipal securities dealer shall deal fairly with all persons and shall not engage in any deceptive, dishonest, or unfair practice.”
- Client Alert
In this issue:
1. IRS Provides New Financial Restructuring Resources on Its Website
2. Joint Committee on Taxation Releases Report on State and Local Government Finance 3. IRS Releases Guidance Addressing Qualified Energy Conservation Bonds
4. Strategic Alliance Agreement Does Not Create Private Business Use - Client Alert
The Internal Revenue Service recently released Notice 2012-44, which provides guidance concerning qualified energy conservation bonds. QECBs are taxable bonds that can be issued by state or local governments to finance certain energy conservation projects, including: (i) reducing energy consumption in publicly owned buildings by at least 20 percent; or (ii) implementing green community programs. QECBs may also be issued to finance certain electricity-producing facilities, such as wind facilities and solar facilities.
- Client Alert
The Securities and Exchange Commission recently approved the Municipal Securities Rulemaking Boardʼs proposed interpretative notice on the obligations of underwriters to municipal securities issuers under the fair dealing and anti-fraud provisions of MSRB Rule G-17. The Notice establishes a comprehensive code of conduct for underwriters in their dealings with municipal entities and imposes detailed disclosure obligations relating to the underwriterʼs role, compensation, and conflicts of interest, as well as the risks associated with complex municipal securities financings. The Notice takes effect on August 2, 2012.
- Client Alert
The Internal Revenue Service recently released Notice 2012-44, which provides guidance concerning qualified energy conservation bonds. QECBs are taxable bonds that can be issued by State or local governments to finance certain energy conservation projects, including: (i) reducing energy consumption in publicly-owned buildings by at least 20 percent; and (ii) implementing green community programs. QECBs may also be issued to finance certain electricity-producing facilities, such as wind facilities and solar facilities.
The Securities and Exchange Commission recently adopted a new rule requiring that national securities exchanges establish listing standards for public company boards of directors and compensation advisers.
- Bank Regulatory Newsletter
In this issue:
- Debt Suspension Agreements
- Elder Financial Abuse
- UDAAP
- Bank Regulatory Newsletter
In this issue:
- Fair Lending - Disparate Impact
- CFPB Enforcement
- Overdrafts
- Client Alert
With slightly less than six months remaining before the reappearance of the lower $1 million exemption from US gift tax, we are resending our June 2011 Client Alert regarding the advantages of using part or all of the $5 million (now $5.12 million) gift tax exemption before it expires at year-end.
Please contact your Chapman and Cutler LLP Trust and Estate attorney to discuss how and whether you may benefit from this unprecedented gifting opportunity.
- Client Alert
The Securities and Exchange Commission recently approved the Municipal Securities Rulemaking Board rule proposals governing the conduct of brokerʼs brokers. The new rules consist of (a) new MSRB Rule G-43 governing the municipal securities activities of brokerʼs brokers and certain alternative trading systems; (b) amendments to MSRB Rules G-8, G-9, and G-18 concerning recordkeeping, record retention, and agency trades by brokerʼs brokers; and (c) interpretive notice on the duties of dealers that use the services of brokerʼs brokers. The new rule, amendments, and interpretive notice become effective on December 22, 2012.
- Client Alert
Over the course of the last few years, the Financial Industry Regulatory Authority, Inc. has proposed changes to the rules governing broker-dealer communications with the public. After receiving significant comments on earlier proposals, FINRA recently announced that the Securities and Exchange Commission has now approved the proposed rule change, as modified by Amendments Nos. 1, 2, and 3, and will be effective as of February 4, 2013.
- Bank Regulatory Newsletter
In this issue:
- Deposit Account Agreements
- Regulatory Enforcement Landscape Has Changed
- Dispute Resolution
- Holder in Due Course Rule
- Client Alert
In 2012, the Securities and Exchange Commission adopted Rule 206(4)-5 and related amendments to certain other rules under the Investment Advisers Act of 1940. These rule changes are intended to prevent “pay to play” practices by investment advisers seeking to manage funds for state and local governments.
- Presentation
On June 7, 2012, the Board of Governors of the Federal Reserve System released final rules relating to “Risk Capital Guidelines: Market Risk” to be issued jointly with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. The FDIC approved the rule on June 12, 2012 and the OCC will likely approve the rule within the week.
- U.S. Basel III Standardized Approach and Advanced and Market Risk Approaches NPRs and Securitization
On June 12, 2012, the Federal Deposit Insurance Corporation Board of Directors met to consider three notices of proposed rulemaking regarding the standardized approaches rule and the Basel III general and advanced approaches rules. The Board of Governors of the Federal Reserve System proposed these rules at their June 7, 2012 meeting.
The comment period for the NPRs ends September 7, 2012.
- Client Alert
On May 22, 2012, the Illinois General Assembly passed House Bill 4687, amending the Illinois Open Meetings Act. Once the Governor signs the bill, it will become effective January 1, 2013.
- Client Alert
New Financial Industry Regulatory Authority, Inc. rules governing broker-dealer “know your customer” and suitability obligations become effective July 9, 2012. In response to several requests, FINRA recently issued Regulatory Notice 12-25 providing additional guidance on implementing the suitability rule. This Client Alert highlights several of the key issues addressed in the guidance.
- Client Alert
The Municipal Securities Rulemaking Board (“MSRB”) recently issued a notice seeking comments on a concept proposal that would require underwriters and municipal advisers to publicly disclose on the MSRBʼs Electronic Municipal Market Access (“EMMA”) system whether they have made or received certain payments in connection with new issues of municipal securities.
- Client Alert
The United States Supreme Court issued its decision in the RadLAX Gateway Hotel v. Amalgamated Bank case on May 29, 2012, closing the door on a debtorʼs end-around a secured creditorʼs right to credit bid.1 In a unanimous decision delivered by Justice Scalia, the Supreme Court found its answer to be “an easy case,” rejecting recent decisions allowing a debtor to sell secured property free and clear of all liens without providing for the secured partyʼs credit bid rights when the sale was pursuant to a plan of reorganization.2 The decision provides secured creditors with predictability and consistency whether its collateral is being sold pursuant to a proposed plan or a sale during the bankruptcy case.
- Client Alert
On May 4, 2012, the Securities and Exchange Commission approved the Municipal Securities Rulemaking Boardʼs proposed interpretative guidance on the obligations of underwriters to municipal securities issuers under the fair dealing and anti-fraud provisions of MSRB Rule G-17. The guidance establishes a comprehensive code of conduct for underwriters in their dealings with municipal entities and imposes detailed disclosure obligations relating to the underwriterʼs role, compensation, and conflicts of interest, as well as the risks associated with complex municipal securities financings. The guidance also addresses underwritersʼ representations to issuers, review of official statements, and compensation, as well as fair pricing retail order periods. The guidance will be effective on August 2, 2012.
In an effort to help begin the dialogue of what should be the best provisions in statute statutes and state constitutions to protect the interests of the municipalities and their access and costs in the market as well as to provide protection to the investors, this book seeks to recognize what state supervision, oversight and assistance is most desired and what, if any, access to municipal bankruptcy, if any, makes sense for both the municipality and the investors in their debt.
- Practical Compliance & Risk Management for the Securities Industry
The Financial Industry Regulatory Authority, Inc. has delayed the implementation date of its new rules governing “know your customer” and suitability to July 9, 2012, to allow broker/dealers to better supervise and educate associated persons regarding the modified obligations. As it does not appear that any further reprieves will be forthcoming, this article will outline the scope of both Rules and the practical effects of the Rules on registered representatives, supervisors and compliance professionals.
President Obama signed into law today the Jumpstart Our Business Startups Act, which is designed to facilitate public and private company access to the capital markets through a number of separate initiatives. These provisions are expected to have a favorable impact on smaller private companies and, in some instances, private investment funds.
- Client Alert
The American Recovery and Reinvestment Act of 2009 allowed the issuance of taxable municipal bonds, called build America bonds, which provide the issuer of such bonds with a direct payment from the federal government equal to 35 percent of the interest payable on such bonds. One of the tax law requirements for these bonds is that 100 percent of bond proceeds (other than amounts spent on costs of issuing the bonds) must be allocated to capital expenditures.
In this issue:
1. 2012 IRS Tax Exempt Bonds Work Plan
2. IRS and MSRB Enter into Memorandum of Understanding
3. Administration Proposes BAB Reinstatement and Other Bond Changes
4. Current Refundings of Tax-Exempt Bonds in Certain Disaster Relief Bond Programs- Client Alert
The Securities and Exchange Commission recently released a notice of proposed Municipal Securities Rulemaking Board rule changes governing the conduct of brokerʼs brokers. The proposed definition of “brokerʼs broker” generally includes a broker, dealer, or municipal securities dealer that principally effects transactions for other broker-dealers or that holds itself out as a brokerʼs broker.
- Client Alert
The Commodity Futures Trading Commission (the “CFTC”) recently issued final rule changes:
• narrowing the exclusion from the definition of commodity pool operator (“CPO”) available to mutual funds and other registered investment companies (“RICs”) and their advisers;
• eliminating an exemption from CPO registration available to private fund operators (but keeping another exemption that had also been proposed to be eliminated);
• narrowing and rescinding certain exemptions from commodity trading advisor (“CTA”) registration;
• adding certain risk disclosure statements for CPOs and CTAs with respect to swaps; and
• making certain changes to reporting and certification obligations for entities required to register as CPOs and
• CTAs and entities relying on exclusions and exemptions from registration.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently announced that the previously approved rule change relating to the “best execution” obligation of broker-dealers will become effective on May 31, 2012. The Securities and Exchange Commission approved the rule change earlier this year, but FINRA did not announce an effective date at that time. New FINRA Rule 5310 and related Supplementary Material replace current NASD Rule 2320.
- Client Alert
The Securities and Exchange Commission and Commodity Futures Trading Commission recently proposed rules and guidelines that would require certain entities to develop and implement a written identity theft prevention program that is designed to detect, prevent, and mitigate identity theft in connection with certain existing accounts or the opening of new accounts.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently issued a revised rule proposal to apply objectivity safeguards and disclosure requirements to the publication and distribution of debt security research reports. Current FINRA rules related to research reports apply only to equity securities.
- Client Alert
The Securities and Exchange Commission recently adopted amendments to the dollar amount tests for the “qualified client” definition in Rule 205-3 under the Investment Advisers Act of 1940. Rule 205-3 provides exemptions from the general Advisers Act prohibition on performance-based compensation for registered investment advisers. The revised rule changes the current $750,000 assets under management test to $1 million and changes the current $1.5 million net worth test to $2 million
- Client Alert
The US Department of Treasury has released its general explanation of the tax proposals in the Obama administrationʼs proposed fiscal year 2013 budget. The administrationʼs proposals include provisions that, if enacted, would reinstate and expand the build America bond program and provide various changes to the tax provisions relating to municipal bonds.
- Client Alert
In a recent opinion of the Supreme Court of the State of Utah (Carter v. Lehi, 2012 UT 2 (2012)), the court abandoned the prior framework it used for determining whether a matter is a proper use of the peopleʼs initiative power and set forth a new framework.
- Client Alert
On February 8, 2012, the IRS released proposed regulations under Code §§ 1471-74 (generally referred to as the FATCA provisions). The proposed regulations clarify, expand, and relax the requirements of the earlier FATCA Notices. This Client Alert briefly summarizes the most significant changes.
- Client Alert
The beginning of each year provides an opportunity for investment advisers to review annual compliance and regulatory matters, including issues related to private investment funds and commodity pools. This Alert briefly summarizes some of the primary issues that advisers might consider in their 2012 annual review and update processes. Many of these issues apply to unregistered advisers as well as registered advisers.
- Client Alert
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires the Securities and Exchange Commission (“SEC”) to conduct a study of legal and regulatory requirements applicable to broker-dealers, investment advisers, and associated persons who provide personalized investment advice and recommendations about securities to retail customers.
The Municipal Securities Rulemaking Board recently filed a proposed rule change with the Securities and Exchange Commission which would:
• amend MSRB Rule G-14 and its Real-time Transaction Reporting System Procedures to add inter- dealer yield data to the MSRBʼs Electronic Municipal Market Access website; and
• amend the RTRS information system and subscription service to remove certain outdated information and infrequently used reporting, add an RTRS-calculated yield, and require dealers to submit dollar prices for certain trades.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently issued guidance to members concerning the supervision of complex products — securities or investment strategies with novel, complicated, or intricate derivative-like features such as structured notes, inverse or leveraged exchange-traded funds, hedge funds, and securitized products. FINRA believes that such features may make it difficult for retail investors to understand the essential characteristics of complex products and their risks. As discussed below, FINRA also identified characteristics that may render a product “complex” for purposes of determining whether such product should be subject to heightened supervisory and compliance procedures.
- Client Alert
The Securities and Exchange Commission recently approved a rule change proposed by the Financial Industry Regulatory Authority, Inc. relating to the “best execution” obligation of broker-dealers.
- Client Alert
The Office of Compliance Inspections and Examinations of the Securities and Exchange Commission (“SEC”) recently issued a National Examination Risk Alert (the “Risk Alert”) on the use of social media by investment advisers. The Risk Alert provides guidance on the application of the Investment Advisers Act of 1940 (the “Advisers Act”) and its rules to the use of social media technologies.
- Client Alert
Over the course of the last few years, the Financial Industry Regulatory Authority, Inc. has proposed changes to the rules governing broker-dealer communications with the public. After receiving significant comments on earlier proposals, FINRA recently filed Amendment No. 2 to the proposed rule changes and a rebuttal letter regarding the comments received.
- Client Alert
The annual continuing disclosure deadline to file financial information and operating data with EMMA is rapidly approaching. Each School District should check its own bond documentation, but for most Districts the annual filing deadline is 210 days after the close of the Districtʼs fiscal year. For this reporting period the deadline is on or about January 26, 2012. If you are unsure of your filing deadline or requirements, please check with us or with your underwriter or financial advisor. We have recently seen increased scrutiny by the Securities and Exchange Commission (the “Commission”) with respect to such filings, and it is important that you comply with the requirements of each of your Continuing Disclosure Undertakings.
- Publications
On July 21, 2010, President Obama signed into law The Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Act makes significant changes to the existing financial services legal framework, affecting nearly every aspect of the industry. This summary highlights many of the provisions of the Dodd-Frank Act that matter most to the asset management industry—investments advisers, broker- dealers, registered investment companies, hedge funds, private equity funds and other alternative investment funds.
- Client Alert
The transition to 2012 has brought two important developments in federal Clean Air Act rules that may affect power plants across the US. In late December, the US Environmental Protection Agency finalized the new power plant emissions standards for mercury, acid gases, and non-mercury metallic toxic pollutants (including arsenic, chromium, nickel, and others) for new and existing coal- and oil-fired utility steam generating units. Dubbed the “Utility MACT,” these new standards apply in all 50 states and will affect many of the nationʼs 1,400 oil- and coal-fired electric steam generating units at approximately 600 power plants throughout the country. This marks the first time that EPA has set national emissions limits on mercury from power plants
- Client Alert
The Financial Industry Regulatory Authority, Inc. issued Regulatory Notice 10-57 to alert member firms that it expects broker-dealers to develop and maintain robust funding and liquidity risk management practices.
