Client Alerts & Publications Archive

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." 

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.

On October 4, 2013, a Chicago bankruptcy court judge decided a case which establishes favorable precedent for the securitization market.

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.

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.

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.

Chapman's August 15 Client Alert on PCAOB proposed new auditing standards was published in the October 2013 issue of Financial Fraud Law Report. 

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.

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 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.

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.

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.

On September 20, 2013, the Environmental Protection Agency proposed regulations aimed at reducing carbon pollution from new fossil-fuel power plants.

On September 18, 2013, the Securities and Exchange Commission adopted final rules for registering municipal advisors.

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.

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.

On August 28, 2013, the Joint Regulators issued a comprehensive re-proposal of the risk retention rules required under Section 941 of Dodd-Frank.

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).

 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

On August 28, 2013, the Joint Regulators issued a comprehensive re-proposal of the risk retention rules required under Section 941 of Dodd-Frank. 

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.

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.

In this issue:

• Update on Telephone Consumer Protection Act Rules and Recent Cases
• Update on Fair Lending and Indirect Auto Lending
• Mortgage Rules Update

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.

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.

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.

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.

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.

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.

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.

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. 

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.

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.

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.

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.

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

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. 

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.

The US banking regulators have issued final Basel III-related capital rules.

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.

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.

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.

In this issue:

•  FRB Guidance on Communication of Supervisory Findings
•  Mortgage Rules Update

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.

In this issue:

• Rule Governing Garnishment of Deposit Accounts Containing Federal Benefit Payments
• Updates to the Mortgage Rules
• Senate Hearing on Private Student Loans

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).

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.