Financial Services Update______August 23, 2010
Volume 5, No. 31



IN THIS ISSUE

Insights from Winston & Strawn

In the News

Banking Agency Developments

Treasury Department Developments

Joint SEC-CFTC Action

Commodity Futures Trading Commission

Securities and Exchange Commission

Exchanges and Self-Regulatory Organizations

Judicial Opinions

Rules Effective Dates

Winston & Strawn Speaking Engagements and Publications


Insights from Winston & Strawn [Top]

As government agencies are busy formulating the rules that will make up much of the substance of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the public has been provided opportunities to put its stamp on this historical financial reform. The Administrative Procedure Act (5 U.S.C. §§ 551-553) requires agencies to publish notice of proposed regulations in the Federal Register, followed by an opportunity for interested persons to participate in the rulemaking through written data, views, or arguments. When Congress considered the Administrative Procedure Act in 1945, the Attorney General's Committee explained the rationale behind requiring agencies to seek public comment: "An administrative agency...is not ordinarily a representative body....Its deliberations are not carried on in public and its members are not subject to direct political controls as are legislators....Its knowledge is rarely complete, and it must always learn the viewpoints of those whom its regulations will affect....[Public] participation...in the rule-making process is essential in order to permit administrative agencies to inform themselves and to effect safeguards to private interests." (Pat McCarran of S. Comm. on the Judiciary, 79th Cong., Administrative Procedure Act (Comm. Print 1945)). In the rulemaking following the passage of the Dodd-Frank Act, agencies are embracing this sentiment by providing not only the opportunity to comment on proposed regulations, but opening up public comments before specific regulations have even been proposed. However, it is important to note that, in some cases, this window of opportunity may be closing soon.
As previously reported, on Aug. 12, 2010, the Federal Deposit Insurance Corporation issued a press release announcing its "open door policy" for the FDIC's rulemaking process as the agency implements provisions of the Dodd-Frank Act. Under this new, more open policy, the FDIC first will hold a series of roundtable discussions regarding the implementation of the Dodd-Frank Act. The FDIC will make these discussions available for public viewing through webcasts. Additionally, the FDIC announced it intends to publish the names and affiliations of private-sector individuals who meet with senior FDIC officials, as well as the subject matters of those meetings. The public may communicate with the FDIC about the implementation process by requesting meetings with FDIC staff members or making comments via e-mail.
The Securities and Exchange Commission also has gone beyond its duties under the Administrative Procedure Act. On July 27, 2010, just days after the Dodd-Frank Act was signed into law, the SEC opened the comment process. On its Web site, the SEC has provided a list of its rulemaking initiatives under the act, with each initiative accompanied by links for comments or e-mails, as well as a link to view comments already submitted. The SEC also has requested comments on specific regulations, as well. On Aug. 13, 2010, the SEC and the Commodity Futures Trading Commission issued a joint release requesting comments on the regulation of mixed swaps and the definitions of key terms associated with such regulation. These comments must be submitted by Sept. 20, 2010. The SEC previously requested comments regarding a study evaluating the current standards of care for brokers, dealers, investment advisers, and associated persons providing personalized investment advice and recommendations about securities to retail investors. The due date for comments regarding this study is rapidly approaching, as all comments must be received by Aug. 30, 2010. As noted above, however, commenters need not wait for such an invitation to share their views on specific proposed regulations, as the SEC has created a forum on its Web site for submitting views on many of its rulemaking initiatives under the Dodd-Frank Act. The list of the SEC's rulemaking initiatives and the links for comments are available on the SEC's Web site, at http://www.sec.gov/spotlight/regreformcomments.shtml.
We again encourage anyone affected by the Dodd-Frank Act's subsequent rulemaking to review the areas of proposed regulations and offer comments where appropriate. Additionally, interested parties should continue to keep their eyes open for further opportunities to participate and comment as the rulemaking under this act progresses. See also below additional opportunities for public comment on proposed regulations unrelated to the Dodd-Frank Act.
In the News [Top]
  • Basel Committee Proposes Mandatory Conversion of Capital Instruments to Address "Moral Hazard".
On August 19th, the Basel Committee on Banking Supervision issued a proposal that would require the contractual terms of capital instruments to include a provision allowing, at the option of the pertinent regulatory authority, that the instrument be written off or converted to common shares in the event that a bank is unable to support itself in the private market in the absence of such conversions. Comments should be submitted on or before October 1, 2010. Basel Committee Press Release.
  • Blame Game.
On August 19th, the New York Times reported the arguments offered by the various elements of the home mortgage industry to affix and avoid responsibility for non-performing loans. Blame Game.
  • Reports on the Impact of Basel III Released.
On August 18th, the Financial Stability Board and Basel Committee on Banking Supervision published reports regarding the new bank capital and liquidity standards, and advising of transition arrangements for implementation of the new standards. The two reports are "An Assessment of the Long-Term Economic Impact of Stronger Capital and Liquidity Requirements" and "Assessing the Macroeconomic Impact of the Transition to Stronger Capital and Liquidity Requirements". Together, the reports provide an assessment of both the net economic impact of stronger capital and liquidity reforms once implementation is complete, and the macroeconomic implications during the transition to full implementation. BIS Press Release.
  • Massachusetts Administrative Judge Sanctions Madoff Feeder Fund.
On August 18th, the Boston Globe reported that a Massachusetts administrative judge has found that Cohmad Securities Corp. failed to cooperate with state investigators examining the firm's relationship with Bernard Madoff. The administrative judge further found that Cohmad failed to supervise its agents and engaged in unethical conduct. Cohmad.
  • Court Approves Justice Department Agreement with Barclays Bank.
On August 18th, the federal district court approved the Justice Department's proposed deferred prosecution agreement with Barclays Bank Plc. The Justice Department alleges Barclays engaged in illegal transactions with financial institutions in Cuba, Iran, Libya, Sudan, and Myanmar. Justice Department Press Release. See also Federal Reserve Board Press Release. The court's approval of the agreement was delayed after the court expressed concern for the agreement's terms and the failure to hold any individual responsible. Deferred Prosecution.
  • The Dodd-Frank Act and Executive Compensation.
On August 16th, the Washington Post reported on the possible implications of the Dodd-Frank Act's provisions concerning executive compensation. Executive Compensation.
  • Vehicle Registration Fees and Municipal Bonds.
On August 16th, Bloomberg reported that a bankruptcy court will review a California law which allows municipalities to use vehicle registration fees to pay bondholders in the event of default. Vehicle Registration Fees.
  • Lehman's Bankruptcy Estate Pursues Market Manipulation Claims.
On August 16th, the New York Times reported that the Lehman Brothers bankruptcy estate is seeking to pursue market manipulation claims against those who allegedly sold Lehman stock short. Short Sellers.
  • European Commission Proposes New Rules for Conglomerates.
On August 16th, Reuters reported that the European Commission has issued proposed rules for the regulation of financial conglomerates, including non-EU institutions. Conglomerates.
  • Record Failure Rate for CFA Level III Exam.
On August 16th, Bloomberg reported that a record number of candidates failed the Level III portion of the Chartered Financial Analyst exam. Failure Rate.

Banking Agency Developments [Top]
  • CRA Data Available.
On August 19th, the four federal banking agency members of the Federal Financial Institutions Examination Council, the Federal Reserve Board, FDIC, OCC, and OTS made available data on small business, small farm, and community development lending reported by certain commercial banks and savings institutions, pursuant to the Community Reinvestment Act. FFIEC Press Release.
  • OCC Issues Bulletin on FinCEN Advisory Concerning Iran.
On August 19th, the OCC issued a Bulletin on the Financial Crimes Enforcement Network's Advisory FIN-2010-A008, which supplements information previously provided on the serious threat of money laundering, terrorism finance, and proliferation finance emanating from the Islamic Republic of Iran and provides guidance to financial institutions regarding United Nations Security Council Resolution (UNSCR) 1929.
  • Modified Effective Date for Electronic Fund Transfer Act Disclosures.
On August 17th, the Federal Reserve Board published amendments to Regulation E, which implements the Electronic Fund Transfer Act, and the official staff commentary to the regulation, in order to implement legislation that modifies the effective date of certain disclosure requirements in the gift card provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009. The interim final rule is effective August 22, 2010. Comments should be submitted on or before September 16, 2010. 75 FR 50683.
  • Banking Regulators Provide Guidance on Reverse Mortgage Products.
On August 16th, the federal banking regulatory agencies issued final guidance entitled, "Reverse Mortgage Products: Guidance for Managing Compliance and Reputation Risks". Institutions are expected to use the guidance in their efforts to ensure that their risk management and consumer protection practices adequately address the compliance and reputation risks raised by reverse mortgage lending. The guidance is effective October 18, 2010. FFIEC Press Release; OCC Bulletin.
  • Federal Reserve Board Home Mortgage Rulemaking Actions.
On August 16th, the Federal Reserve Board released a series of proposed, interim, and new final rules regarding home mortgage origination and refinancing. The Federal Reserve Board:
  • Announced final rules to protect mortgage borrowers from unfair, abusive, or deceptive lending practices that can arise from loan originator compensation practices. Under the new rule, a loan originator may not receive compensation that is based on the interest rate or other loan terms. The final rule also prohibits a loan originator that receives compensation directly from the consumer from also receiving compensation from the lender or another party. Additionally, the final rule prohibits loan originators from directing or "steering" a consumer to accept a mortgage loan that is not in the consumer's interest in order to increase the originator's compensation. The new rules are effective April 1, 2011. Loan Origination Compensation Practices Press Release.
  • Announced final rules implementing an amendment to the Truth in Lending Act requiring that consumers receive notice when their mortgage loan has been sold or transferred. Covered parties may continue to follow the November 2009 interim rules until the mandatory compliance date for the final rules, which is January 1, 2011. Mortgage Loan Sale or Transfer Press Release.
  • Issued an interim rule that revises the disclosure requirements for closed-end mortgage loans under Regulation Z (Truth in Lending). The interim rule implements provisions of the Mortgage Disclosure Improvement Act that require lenders to disclose how borrowers' regular mortgage payments can change over time and to disclose certain features, such as balloon payments, or options to make only minimum payments that will cause loan amounts to increase. Although lenders must comply with the interim rule for applications they receive on or after January 30, 2011, they may do so earlier. Comments on the interim rule must be submitted within 60 days after publication in the Federal Register. Closed-End Mortgage Loans Press Release.
  • Proposed a rule to revise the escrow account requirements for higher-priced, first-lien "jumbo" mortgage loans. The proposed rule would increase the annual percentage rate threshold used to determine whether a mortgage lender is required to establish an escrow account for property taxes and insurance for first-lien jumbo mortgage loans. Comments should be submitted within 30 days after publication in the Federal Register. Jumbo Mortgage Loans Press Release.
  • Proposed enhanced consumer protections and disclosures for home mortgage transactions. The proposed amendments include significant changes to Regulation Z (Truth in Lending) and represent the second phase of the Board's comprehensive review and update of the mortgage lending rules in the regulation. The amendments would improve the disclosures consumers receive for reverse mortgages and impose rules for reverse mortgage advertising to ensure advertisements contain accurate and balanced information; prohibit certain unfair practices in the sale of financial products with reverse mortgages; improve the disclosures that explain a consumer's right to rescind certain mortgage transactions and clarify the responsibilities of the creditor if a consumer exercises the right; and ensure that consumers receive new disclosures when the parties agree to modify the key terms of an existing closed-end mortgage loan. Comments should be submitted within 90 days after publication n the Federal Register. Regulation Z Amendments Press Release (with links to related documents).
Treasury Department Developments [Top]
  • Iranian Sanctions Regulations.
On August 16th, the Treasury Department issued the Iranian Financial Sanctions Regulations implementing subsections 104(c) and 104(d) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. Treasury Department Press Release.
Joint SEC-CFTC Action [Top]
  • SEC and CFTC Request Comment on How to Define Terms.
On August 13th, the SEC and CFTC jointly requested comment on how to define certain key terms relating to swaps and security-based swaps, as required by the Dodd-Frank Act. Comments should be submitted on or before September 20, 2010. SEC Release No. 34-62717; Joint Press Release.
Commodity Futures Trading Commission [Top]
  • CFTC Withdraws Position Limits Proposal.
On August 18th, the CFTC withdrew its proposed energy position limits in light of the Dodd-Frank Act's provisions requiring broader limits. The CFTC will issue a notice of rulemaking proposing position limits for regulated exempt commodity contracts, including energy commodity contracts, in accordance with the Dodd-Frank Act. 75 FR 50950. On August 19th, Reuters reported the new position limits the CFTC proposes will likely be based upon the withdrawn proposed energy limits. Proposed Limits.
  • CFTC Staff Allows Turkish Derivatives Exchange's Futures Contract.
On August 18th, the CFTC announced that its Office of General Counsel issued a no-action letter permitting the offer and sale in the United States of Turkish Derivatives Exchange's futures contract based on the Istanbul Stock Exchange 30 Stock Index. CFTC Release No. PR5874-10.
  • CFTC Issues Letter to CME Regarding ELX EFF Rule.
On August 13th, the CFTC sent a letter to CME Group, Inc. regarding a Chicago Board of Trade self-certified Market Regulation Advisory Notice issued on October 19, 2009. In that notice, CBOT stated that its rules do not permit the execution of exchange of futures for futures transactions. The notice was issued shortly after the CFTC approved an ELX Futures rule authorizing participants on ELX to carry out EFF transactions. The CFTC has reviewed the matter and has found that ELX's EFF transactions are not wash sales and are consistent with Commission precedent. The Commission also has directed staff to separately analyze whether CBOT's October 19, 2009 notice was consistent with the requirements of CEA Core Principle 18 (antitrust considerations). CFTC Release No. PR-5872-10.
Securities and Exchange Commission [Top]
Requests for Comments
  • SEC Seeks Comment on IFRS Issues.
On August 12th, the SEC requested comment on behalf of the staff on topics related to its ongoing consideration of incorporating International Financial Reporting Standards into the financial reporting system for U.S. issuers. SEC Release No. 33-9133 seeks comment on: U.S. investors' current knowledge of IFRS and preparedness for incorporation of IFRS into the financial reporting system for U.S. issuers; how investors educate themselves on changes in accounting standards and the timeliness of such education; and the extent of, logistics for, and estimated time necessary to undertake changes to improve investor understanding of IFRS; and the related education process to ensure investors have a sufficient understanding of IFRS prior to potential incorporation. SEC Release No. 33-9134 seeks comment on: issuers' compliance with contractual arrangements that require the use of U.S. GAAP; issuers' compliance with corporate governance requirements; and the application of certain legal standards tied to amounts determined for financial reporting purposes. Comments should be submitted on or before October 18, 2010.
Other Developments
  • Open Meeting.
The SEC announced that the SEC Commissioners will hold an open meeting where they are scheduled to consider whether to adopt changes to the federal proxy and other rules to facilitate director nominations by shareholders. Open Meeting Notice.
  • New and Proposed Disclosure Requirements.
On August 18th, CFO.com published a chart summarizing new SEC disclosure requirements mandated by the Dodd-Frank Act, and proposed new disclosure requirements included in pending legislation. Disclosure.
  • Senators Seek Improved Off-Balance Sheet Disclosure.
On August 13th, Reuters reported six Senators have asked the SEC to consider promulgating new rules governing off-balance sheet disclosures. Disclosures.

Exchanges and Self-Regulatory Organizations [Top]
Financial Industry Regulatory Authority
  • FINRA Proposes Consolidated Rules 2090 (Know Your Customer) and 2111 (Suitability).
On August 13th, the Financial Industry Regulatory Authority proposed FINRA Rule 2090 (Know Your Customer) and FINRA Rule 2111 (Suitability), to be part of the Consolidated FINRA Rulebook. The proposed rules are based in large part on Incorporated NYSE Rule 405(1) (Diligence as to Accounts) and NASD Rule 2310 (Recommendations to Customers (Suitability)) and their related interpretative materials, which would be deleted. Comments should be submitted on or before September 9, 2010. SEC Release No. 34-62718.
  • FINRA Issues Guidance on Trade Modifier.
On August 19th, the Financial Industry Regulatory Authority issued new guidance on the use of the weighted-average price/special pricing formula (.W) trade modifier for reporting certain types of OTC trades in NMS stocks to FINRA. Firms must make the systems changes necessary to properly modify trades in accordance with this guidance no later than October 18, 2010. FINRA Trade Reporting Notice.
  • FINRA Provides Guidance on New Short Sale Delivery Requirements.
On August 16th, the Financial Industry Regulatory Authority issued a Regulatory Notice addressing new FINRA Rule 4320 (Short Sale Delivery Requirements) which is effective October 15, 2010. FINRA Regulatory Notice 10-35.
  • Conflicts of Interest Rule Approved for Inclusion in Consolidated Rulebook.
On August 12th, the SEC approved the Financial Industry Regulatory Authority's proposal to adopt FINRA Rule 5121 (Public Offerings of Securities With Conflicts of Interest) in the consolidated FINRA rulebook. SEC Release No. 34-62702.
International Securities Exchange
  • ISE Proposes Listing and Trading in Mini DAX.
On August 12th, the SEC provided notice of the International Securities Exchange's proposal to permit trading in options on a reduced value DAX Index, including long-term options. Comments should be submitted on or before September 8, 2010. SEC Release No. 34-62703.
Municipal Securities Rulemaking Board
  • MSRB Proposes Subscription Service to SHORT System.
On August 17th, the SEC provided notice of the Municipal Securities Rulemaking Board's proposal to establish a subscription to the information collected by the MSRB's Short-term Obligation Rate Transparency System. The SHORT System is a facility of the MSRB for the collection and dissemination of information about securities bearing interest at short-term rates. Currently, these securities consist of Auction Rate Securities and Variable Rate Demand Obligations. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of August 23rd. SEC Release No. 34-62734.
  • SEC Approves Proposed Amendments and Interpretations.
On August 13th, the SEC granted accelerated approval to the Municipal Securities Rulemaking Board's proposed amendment to Rule G-8 (Books and Records to be Made by Brokers, Dealers and Municipal Securities Dealers), Rule G-9 (Preservation of Records), and Rule G-11 (New Issue Syndicate Practices); proposed interpretation of Rule G-17 (Conduct of Municipal Securities Activities); and proposed deletion of a previous Rule G-17 Interpretive Notice. Comments should be submitted on or before September 8, 2010. SEC Release No. 34-62715.
NASDAQ OMX BX
  • Proposed Strike Price Intervals are Immediately Effective.
On August 13th, the SEC granted immediate effectiveness to NASDAQ OMX BX's proposed strike price intervals for options on Trust Issued Receipts, including Holding Company Depository Receipts, in $1 or greater intervals where the strike price is $200 or less, and $5 or greater where the strike price is greater than $200. Comments should be submitted on or before September 9, 2010. SEC Release No. 34-62719.
NASDAQ Stock Market
  • NASDAQ Proposes Definition of "Professional".
On August 16th, the SEC provided notice of the NASDAQ Stock Market's filing of a proposed rule change adopting a definition of Professional and requiring that all Professional Orders be appropriately marked. Comments should be submitted on or before September 10, 2010. SEC Release No. 34-62724.
National Futures Association
  • NFA Petitions for Amendment of CFTC Regulation 4.5.
On August 18th, the National Futures Association petitioned the CFTC to amend CFTC Regulation 4.5, which provides an exclusion from the definition of the term "commodity pool operator" for otherwise regulated persons operating certain qualifying entities. The NFA requests the restoration of the pre-2003 requirement that persons claiming the exclusion file a notice of eligibility and represent, in part, that the person will not market participations to the public; and will use commodity futures or commodity options contracts solely for bona fide hedging purposes and, with respect to positions held for non-bona fide hedging purposes, the aggregate initial margin and premiums required to establish such positions will not exceed five percent of the liquidation value of the qualifying entity's portfolio, after taking into account unrealized profits and unrealized losses on any such contracts it has entered into. NFA Petition.
New York Stock Exchange/NYSE Amex
  • NYSE and NYSE Amex Propose Co-Location Prices.
On August 16th, the SEC provided notice of the New York Stock Exchange's and NYSE Amex's proposed amendments to their respective price lists to identify fees pertaining to co-location services, which allow users to rent space on exchange-controlled premises in order to locate their electronic servers in close physical proximity to each exchange's trading and execution systems. The exchanges plan to begin operating data centers in Mahwah, New Jersey, from which they will offer such co-location services. In addition, the exchanges will offer services related to co-location, including cross connections, equipment and cable installation, and remote "hot-hands" services. Comments on each proposal should be submitted on or before September 10, 2010. SEC Release No. 34-62732(NYSE); SEC Release No. 34-62731 (NYSE Amex).

Judicial Opinions [Top]
  • The Fraud-on-the-Market Theory of Reliance.
On August 20th, the Seventh Circuit affirmed a district court's finding that shares issued by Conseco qualify for the fraud-on-the-market presumption of reliance in a class action securities fraud lawsuit against Conseco's executives. In doing so, the Court discussed the economic basis for the theory's applicability to cases involving stock price decreases, and the inclusion of short sellers in a certified class. The Seventh Circuit also held that trial courts need not consider materiality or falsehood prior to class certification, disagreeing with the Fifth and First Circuits. Schleicher v. Wendt.
  • Court Addresses Attorney Fee Awards.
On August 18th, the Ninth Circuit addressed the manner in which attorney fees should be reviewed in settled class action securities fraud cases. It held that a schedule that requires class members to file objections to class counsel's fee petition before the fee motion itself is filed denies the class the full and fair opportunity to examine and oppose the motion, in violation of Fed.R.Civ.Pro. 23(h). In re: Mercury Interactive Corp. Securities Litigation.
  • Fair Credit Reporting Act Preempts Portion of California Credit Reporting Act.
On August 18th, the Ninth Circuit held that the federal Fair Credit Reporting Act preempts a California statute governing how consumer credit reporting bureaus investigate and report a disputed credit report. The Court further held that plaintiff's reinvestigation claims were not the proper vehicle for collaterally attacking the legal validity of her consumer debts. Carvalho v. Equifax Information Services.
  • Court Contemplates the Meaning of "Sue".
On August 17th, the Ninth Circuit discussed the meaning of "sue" as used by the Credit Repair Organization Act. A credit card issuer marketed credit cards to subprime consumers. A divided panel of the Ninth Circuit held that the mandatory arbitration clause of the credit card agreement violated the Credit Repair Organization Act's provision disallowing any waiver of a consumer's right to sue in court for CROA violations. In doing so, the Ninth Circuit disagreed with the Third and Eleventh Circuits. Greenwood v. CompuCredit Corp.
  • Third Circuit Rejects "Fraud Created the Market" Theory.
On August 16th, the Third Circuit, addressing an issue of first impression in that Circuit, rejected the "fraud created the market" theory for establishing reliance in a securities fraud action. It affirmed a trial court's denial of class certification in a case against an issuer's auditor who allegedly issued deficient audits. Discussing the three categories of cases recognizing the fraud created the market theory - legal, economic, and factual - the Third Circuit found that the theory "lacks a basis in any of the accepted grounds for creating a presumption [of reliance]." Malack v. BDO Seidman, LLP.
  • Appellants' Actions Violated FTC Acts.
On August 16th, the Ninth Circuit affirmed the entry of summary judgment finding appellants civilly liable for making material misrepresentations and engaging in deceptive business practices in violation of the Federal Trade Commission Act and the FTC's Franchise Rule in their sale of internet kiosk business opportunities. The Court also affirmed the imposition of equitable monetary relief upon the companies and a constructive trust over a portion of fees paid to appellants' attorneys. FTC v. Network Services Depot, Inc.
  • Securities Fraud Lawsuit Dismissed.
On August 16th, a federal district court dismissed a putative class action securities fraud complaint alleging that defendants made material misrepresentations about the adequacy of a subsidiary's loss reserves and the quality of its loan portfolio. Most of the alleged misstatements were general statements of optimism or non-actionable puffery. The remaining misrepresentations fall for plaintiffs' failure to adequately plead scienter. Woodward v. Raymond James Financial, Inc.
  • Attorney Fees Awarded Under the FDCPA are Affirmed.
On August 16th, the Tenth Circuit affirmed an attorney fee award to a class representative after settlement of a case alleging violations of the Fair Debt Collection Practices Act. The Court also awarded plaintiff her fees and costs incurred on appeal. Anchondo v. Anderson, Crenshaw & Assoc., LLC.
Rules Effective Dates [Top]
  • Amendments to the Informal and Other Procedures, Rules of Organization and Program Management, and Rules of Practice; Interim Commission Review of Public Company Accounting Oversight Board Inspection Reports and Regulation P - Effective September 7th, 2010.
The Securities and Exchange Commission is amending its Informal and Other Procedures to add a rule to facilitate interim SEC review of Public Company Accounting Oversight Board ("PCAOB") inspection reports under Section 104(h) of the Sarbanes-Oxley Act of 2002, and its Rules of Organization and Program Management and Rules of Practice to delegate authority to the Chief Accountant related to these reviews. The SEC is also establishing a subpart in its Informal and Other Procedures -- Regulation P -- to include procedural rules relating to the PCAOB. 75 FR 47444.
  • Political Contributions by Certain Investment Advisers - Effective September 13th, 2010.
The Securities and Exchange Commission is adopting a new rule under the Investment Advisers Act of 1940 that prohibits an investment adviser from providing advisory services for compensation to a government client for two years after the adviser or certain of its executives or employees make a contribution to certain elected officials or candidates. The new rule and rule amendments address "pay to play" practices by investment advisers. The new rule also prohibits an adviser from providing or agreeing to provide, directly or indirectly, payment to any third party for a solicitation of advisory business from any government entity on behalf of such adviser, unless such third parties are registered broker-dealers or registered investment advisers, in each case themselves subject to pay to play restrictions. Additionally, the new rule prevents an adviser from soliciting from others, or coordinating, contributions to certain elected officials or candidates or payments to political parties where the adviser is providing or seeking government business. The SEC also is adopting rule amendments that require a registered adviser to maintain certain records of the political contributions made by the adviser or certain of its executives or employees. 75 FR 41017.
  • Amendments to Form ADV - Effective October 12th, 2010.
The Securities and Exchange Commission is adopting amendments to Part 2 of Form ADV, and related rules under the Investment Advisers Act, to require investment advisers registered with the SEC to provide new and prospective clients with a brochure and brochure supplements written in plain English. These amendments are designed to provide new and prospective advisory clients with clearly written, meaningful, current disclosure of the business practices, conflicts of interest and background of the investment adviser and its advisory personnel. Advisers must file their brochures with the SEC electronically and the SEC will make them available to the public through its website. The SEC also is withdrawing the Advisers Act rule requiring advisers to disclose certain disciplinary and financial information. 75 FR 49233.

Winston & Strawn Speaking Engagements and Publications [Top]
  • Winston Sponsors Thomson's 16th Annual LPC Loan Pricing Conference.
Winston & Strawn partners Michael Mullins and Kent Walker will be speaking during the 16th Annual Thomson Reuters LPC Loan Conference, titled: "You Say You Want an Evolution: Redefining the Loan Market," to be held September 22, 2010, in New York. Winston & Strawn is also serving as a sponsor for this event. Event.
  • Winston & Strawn Sponsors TMA's Annual Convention.
Winston & Strawn is proud to sponsor the TMA Annual Convention to be held October 6-8, 2010, at the JW Marriott in Orlando, Florida. TMA is a premier professional organization dedicated to corporate renewal and turnaround management. This convention is for professionals who share a common interest in strengthening the economy through the restoration of corporate value, including turnaround practitioners, appraisers, attorneys, investment bankers, equity investors, liquidators, venture capitalists, as well as workout specialists and outsourcing professionals. Event.

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