January 30th marked the ten-and-one-half year anniversary of the Sarbanes Oxley Act. Securities and Exchange Commission ("SEC") Commissioner Daniel M. Gallagher, in an address before the 2013 Directors Forum, called that law "the most significant federal intervention into corporate governance matters in decades, perhaps since the passage of the Securities Act and Exchange Act in the 1930s." Gallagher further remarked on the "federalization" of corporate governance, noting the increasing number of disclosure requirements for social and political issues.

One of the social and political issues to which Gallagher obliquely referred is the Dodd-Frank Wall Street Reform and Consumer Protection Act's (the "Dodd-Frank Act") conflict minerals provision. While the SEC's rules implementing that provision remain under judicial review, Celia Taylor, blogging for theRacetotheBottom, noted that the Organization for Economic Cooperation and Development ("OECD") has published a report on the implementation of the OECD's "Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas." See OECD conflict minerals webpage. Taylor discusses the guidance's relevance for issuers subject to SEC reporting requirements, noting that the guidance is intended to help companies put in place a due diligence process that meets the SEC's conflict mineral disclosure requirements.

In a subsequent blog post, Taylor discusses the increased corporate interest in adopting sustainable practices and disclosure, and the surprising inverse relationship between that interest and public perception; while sustainability awareness has risen in the corporate world, the public view of corporate sustainability performance has fallen. Taylor suggests that the divergent perspective is due, at least in part, by the failure of firms to adequately explain their activities to shareholders and the public. The benefits of sustainability adoption have been recounted by Bloomberg. A study conducted by MIT's business school and the Boston Consulting Group reported that more than one-third of survey respondents profited from their sustainability programs. While the survey was conducted on a global basis, the study also found that North American companies have been slow both to adopt sustainable practices and reap the benefits.

Addressing corporate governance in the financial industry, the American Banker highlighted the Federal Reserve Board's December 17, 2012 supervisory letter concerning risk-based supervision of complex financial institutions. American Banker explains the Federal Reserve Board's new emphasis on the role played by corporate boards, which is expected to take an active role in promoting compliance.

• OCC Publishes Community Development Investments Newsletter.

On February 7th, the Office of the Comptroller of the Currency (the "OCC") published the latest edition of its Community Development Investments electronic newsletter, "The State Small Business Credit Initiative." The newsletter describes how national banks and federal savings associations can implement the Treasury Department's State Small Business Credit Initiative to increase the amount of credit available for small businesses. OCC Press Release.

• OCC Bulletins.

The OCC published Bulletins regarding:

• Truth in Lending Act and Consumer Leasing Act: Dollar Thresholds for Exempt Consumer Credit and Lease Transactions;

• Home Mortgage Disclosure Act: CFPB Final Rule for Reporting Thresholds; and

• Truth in Lending Act: Annual Dollar Trigger for Certain Home Mortgages.

• New Iranian Sanctions.

On February 6th, the Treasury Department announced several actions that tighten sanctions on Iran's access to its oil revenues in accordance with the Iran Threat Reduction and Syria Human Rights Act of 2012. The Act expands the scope of sanctionable transactions with the Central Bank of Iran and designated Iranian financial institutions by restricting Iran's ability to use oil revenue held in foreign financial institutions as well as preventing repatriation of those funds to Iran. The Treasury Department also designated one individual and four entities for their involvement in the Iranian government's censorship activities. Treasury Department Press Release.

• Unblocking Notices.

On February 6th, the Treasury Department's Office of Foreign Asset Control ("OFAC") published the names of three individuals whose property and interests in property have been unblocked pursuant to Executive Order 12978, "Blocking Assets and Prohibiting Transactions with Significant Narcotics Traffickers." Separately, OFAC published the names of 22 individuals and 13 entities whose property and interests in property have been unblocked pursuant to the Foreign Narcotics Kingpin Designation Act.

• Designations.

On February 5th, the Treasury Department announced the designation of Filemon Garcia Ayala, and two of his companies located in Mexico, pursuant to the Foreign Narcotics Kingpin Designation Act for their links to Los Zetas, a Mexican drug cartel. In addition to the entities located in Mexico, the Treasury Department also identified three U.S. companies affiliated with Filemon Garcia Ayala as blocked property pursuant to the Kingpin Act. Treasury Department Press Release.

• Temporary Exemptive Relief in Connection with the Definition of "Security" to Encompass Security-Based Swaps.

On February 7th, the SEC extended to February 11, 2014 the temporary exemptive relief (provided on July 1, 2011) from compliance with certain provisions of the Securities Exchange Act of 1934 (as amended, the "Exchange Act") in connection with the revision of the Exchange Act definition of "security" to encompass security-based swaps. SEC Release No. 34-68864.

• Structured Notes.

On February 7th, Bloomberg discussed the SEC's efforts to clarify rules governing structured note disclosures. Clarity.

• Shortened Timeline for Filing Form 13F Sought.

On February 6th, BusinessWeek reported NYSE Euronext has asked the SEC to amend its Form 13F timeline to require investment managers to file their quarterly report within two days instead of the current 45 days. Form 13F.

• Decimalization Roundtable.

On February 5th, Reuters summarized the comments made at the SEC's roundtable discussion on decimalization. Exchanges presented proposals aimed at increasing liquidity for the shares of small and mid-sized companies. For these companies tick sizes would be increased while tick sizes for highly liquid companies could be lowered. Decimalization Roundtable. Others, however, disagreed with the proposal. MarketWatch cited those who believe an increase in tick size would simply increase costs to investors. Instead, critics of increased tick sizes suggested that transaction fees be raised in order to generate the revenue needed for research coverage of smaller firms. Transaction Fees.

• Conflicted Commissioners.

On February 4th, the Wall Street Journal discussed the conflict of interests which prevent SEC Commissioners from voting on enforcement matters, a problem that will grow as the agency's enforcement pace increases. Conflicts.

• Judge Overseeing FCPA Case Narrows Document Request.

On February 4th, Reuters reported that U.S. District Court Judge Richard Leon has narrowed his demand that IBM produce documents as a condition to his approving a $10 million settlement of Foreign Corrupt Practices Act charges filed by the SEC. Narrowed Request.

• Open Meeting.

The SEC will hold an open meeting on February 13, 2013 to consider the Public Company Accounting Oversight Board's budget and related accounting support fee. Meeting Notice.

• trueEx Proposes DCM Amendment.

On February 5th, the Commodity Futures Trading Commission (the "CFTC") requested comment on trueEx LLC's request to amend its order of designation to allow intermediated trading on its platform. Comments should be submitted on or before March 1, 2013. CFTC Press Release.

• Commodity Futures Trading Commission

February 11, 2013 – Clearing Requirement Determination Under Section 2(h) of the Commodity Exchange Act. 77 FR 74283.

• Consumer Financial Protection Bureau

February 7, 2013 – Electronic Fund Transfers (Regulation E) 77 FR 50243. 77 FR 40459. (Correction) 77 FR 6194.

• Federal Housing Finance Agency

February 11, 2013 – Relocation of Regulations. 78 FR 2319.

• National Credit Union Administration

February 19, 2013 - Definition of Troubled Condition. 78 FR 4026.

February 19, 2013 - Designation of Low-Income Status; Acceptance of Secondary Capital Accounts by Low-Income Designated Credit Unions. 78 FR 4030.

February 19, 2013 - Prompt Corrective Action, Requirements for Insurance, and Promulgation of NCUA Rules and Regulations. 78 FR 4032.

• Securities and Exchange Commission

February 4, 2013 – Extension of Exemptions for Security-Based Swaps. 78 FR 7654.

March 25, 2013 - Lost Securityholders and Unresponsive Payees. 78 FR 4768.

• Amendments Regarding Auctions of Exchange-Listed Securities are Approved.

On January 31st, the SEC approved BATS Exchange's proposed amendments to BATS Rule 11.23, which governs auctions conducted by the Exchange for securities listed on the Exchange. The amendments change the definition of "Collar Price Range," how the BATS Exchange determines the price for Exchange Auctions, the information to be published in connection with IPO and Halt Auction Data, and clarify the execution of a Regular Hours Only order. SEC Release No. 34-68788.

• Amendment to Competitive Liquidity Provider Program Proposed.

On January 31st, the SEC provided notice of BATS Exchange's filing of a proposed rule change modifying the competitive liquidity provider program to, among other things, modify the calculation of size event tests. Comments should be submitted on or before February 27, 2013. SEC Release No. 34-68789.

• FINRA Oversight.

On February 7th, Reuters reported the Financial Industry Regulatory Authority ("FINRA") will suspend its efforts to obtain regulatory authority over the investment manager industry. Suspension.

• FINRA Proposes Reduction in Trade Reporting Time.

On February 6th, the SEC provided notice of FINRA's filing of a proposed amendment to FINRA trade reporting rules that would require members to report over-the-counter ("OTC") transactions in NMS stocks and OTC Equity Securities, and cancellations of such transactions, to FINRA as soon as practicable, but no later than 10 seconds, following execution (or cancellation, as applicable). Comments should be submitted within 21 days after publication in the Federal Register. SEC Release No. 34-68842.

• Customer CDS Clearing Model Approved.

On February 1st, the SEC approved ICE Clear Europe's proposed rule change to provide for a customer clearing model for CDS products and to amend, clarify and consolidate certain rules and procedures. SEC Release No. 34-68812.

• Longer Period Designated to Consider Proposed Settlement Changes.

On February 5th, the SEC designated April 4, 2013 as the date by which it will approve, disapprove, or institute disapproval proceedings concerning National Securities Clearing Corporation's ("NSCC") proposed elimination of the offset of NSCC obligations with institutional delivery transactions that settle at the Depository Trust Company for the purpose of calculating the NSCC clearing fund under Procedure XV of NSCC's Rules & Procedures. SEC Release No. 34-68829.

• Court Lacked Subject Matter Jurisdiction over Claims Asserted against Failed Bank.

On February 5th, the United States Court of Appeals for the Seventh Circuit dismissed for lack of subject matter jurisdiction claims alleging that InBank violated state law by applying an allegedly illusory index rate to the loans it made to plaintiffs. After plaintiffs filed suit, InBank collapsed and the Federal Deposit Insurance Company (the "FDIC") was appointed its receiver. Although plaintiffs' loans were assumed by a successor institution, potential liability under the lawsuit was not. Plaintiffs' claims, therefore, were against the FDIC and the Financial Institutions Reform, Recovery and Enforcement Act ("FIRREA") applied. Because plaintiffs failed to exhaust their administrative remedies in accordance with FIRREA, subject matter jurisdiction is lacking. Farnik v. FDIC.

• Securities Fraud Claims against Drug Firm are Reinstated.

On February 4th, the United States Court of Appeals for the First Circuit partially reinstated securities fraud claims stemming from a secondary offering of stock made by defendant, a pharmaceutical company. When read in context, the complaint plausibly pleads defendants made Securities Act Item 303 and 503 omissions by failing to disclose 23 serious adverse effects, including one death, two life-threatening reactions and 14 hospitalizations. Silverstrand Investments v. AMAG Pharmaceuticals, Inc.

• Investors in Failed Mutual Bank Cannot Convert Investment into a Deposit.

On February 4th, the United States Court of Appeals for the Seventh Circuit affirmed the dismissal of claims brought by plaintiffs, who controlled a mutual bank before it collapsed, against the FDIC as both regulator and as receiver. The Administrative Procedures Act (the "APA") claim against the FDIC as regulator, which seeks money damages and an order directing the FDIC to treat $23.6 million in subordinated debt as bank deposits, is a claim for substitute relief barred by the APA. The APA claim against the FDIC as receiver is barred because plaintiffs did not seek administrative review under the Financial Institutions Reform, Recovery and Enforcement Act. And the FIRREA claim is barred because it challenges the FDIC's actions as a regulator. Veluchamy v. FDIC.

• Senate Banking Committee to Hold Dodd-Frank Act Hearings.

The Senate Banking Committee will hold an open meeting on February 14, 2013 on the implementation of the Dodd-Frank Act. The Committee will hear testimony from the Treasury Department, Federal Reserve Board, FDIC, OCC, Consumer Financial Protection Bureau, SEC, and CFTC. Hearings Notice.

• Broker-Dealer Duties.

On February 8th, Reuters excerpted its interview with Boston University Law School professor Tamar Frankel on the duties owed by broker-dealers. Duties.

• European Parliament Adopts Derivatives Rules.

On February 7th, the European Parliament approved proposed technical standards for the implementation of new derivatives rules. Michel Barnier, E.C. Commissioner for Internal Markets and Services, said that the rules are equivalent to those in the U.S. The rules' application to end-users will occur over the course of a three-year phase in period. Barnier Statement.

• Tax Notes.

On February 6th, Bloomberg discussed Representative Dave Camp's tax proposals for financial products. Tax Proposals. DealBook summarized the arguments in favor of a financial transaction tax, which Senators Tom Harkin and Peter DeFazio plan to reintroduce. Robin Hood Tax.

• Payments Risk Committee Makes Central Counterparty Recommendations.

On February 5th, the Payments Risk Committee of the Federal Reserve Bank of New York ("PRC") released a report recommending that central counterparties make certain information on their risk management practices available to their clearing members. The PRC believes that CCP reporting of risk management practices will assist clearing members conduct their own due diligence on the risks they face. PRC Press Release.

• A Growing Problem.

On February 4th, Bloomberg noted that after the financial crisis the largest banks got bigger, not smaller, prompting some to suggest additional measures to address the risks those banks pose. Proposals include higher capital levels, limiting deposit insurance and discount-window access, and further revising the FDIC's resolution authority. Proposals. On February 5th, the Washington Post presented the opposing side, summarizing a paper which argues in favor of large banks. Counterproposal.

• Crowdfunding for Established Companies.

On February 4th, CFO.com considered whether established companies will be able to avail themselves of the JOBS Act's crowdfunding provisions. Using the launch of the on-line portal ConfidentCrowd as an example, CFO.com concludes that established companies can benefit from crowdfunding. Crowdfunding.

• Crowdfunding for Whistleblowers.

On February 1st, Forbes columnist Edward Siedle touted his Whistleblower Forensic Opportunity Trust, his RocketHub crowdfunding site seeking investors to support financial fraud whistleblowers. Whistleblowers and Crowdfunding.

• Winston & Strawn to Sponsor 14th Annual Kellogg Private Equity & Venture Capital Conference.

Winston & Strawn will sponsor and Oscar David will speak at Kellogg School of Management's 14th Annual Kellogg Private Equity & Venture Capital Conference. This event will take place on February 20, 2013 in Chicago. The theme of this year's conference is "Evolution: The Ever-Changing Landscape of Private Equity and Venture Capital Investment."

• Antitrust and Competition—The EU Weekly Briefing, Vol. 1, Issue 14.

Antitrust and Competition — The EU Weekly Briefing is designed to provide timely updates on recent European Union competition law by including a short description of, and links to, recent developments.

• Contact Us.

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