SEC and EU Supervisory Cooperation for Asset Management Industry

On July 19, the SEC announced that it signed various memoranda of understanding with the financial regulators of 25 member states of the EU and 3 regulators of the European Economic Area as part of a long-term strategy to improve oversight of certain entities in the asset management industry that operate across national borders. SEC Release. Cooperative Arrangements Fact Sheet.

Real Estate Mortgage Excess Servicing Spread is a Real Estate Asset for REIT Purposes

On July 12, the IRS released a private letter ruling issued on April 12, 2013, ruling that certain real estate mortgage excess servicing spread would constitute a real estate asset, and that income received from the spread would be treated as interest on obligations secured by mortgages on real property, for purposes of the tax rules governing REITs. This ruling is similar in many respects to another ruling issued in May 2012. Private letter rulings are not binding on the IRS other than with respect to the taxpayer to whom it is addressed, but REITs may find these rulings useful in analyzing tax issues associated with real estate mortgage excess servicing spreads. IRS Private Letter Ruling 201328018 (April 12, 2013). IRS Private Letter Ruling 201234006 (May 24, 2012).

Treasury and IRS Extend FATCA Deadlines

Notice 2013-43, released on July 12, 2013, announces the Internal Revenue Service's (the IRS) and the Department of the Treasury's intent to amend final Treasury regulations implementing the U.S. Foreign Account Tax Compliance Act (FATCA) to (i) extend certain implementation dates for withholding and account due diligence and (ii) specifically identify jurisdictions treated as having in force intergovernmental agreements (IGAs) for the implementation of FATCA, including jurisdictions that have signed IGAs but have not yet brought those IGAs into force. Orrick covered the topic in a recent alert. Notice 2013-43.

SEC Lifts Ban on General Solicitation, Adopts "Bad Actor" Disqualification Rules and Proposes Amendments to Form D Filings

On April 5, 2012, the Jumpstart Our Business Startups Act (the JOBS Act) was enacted. Title II of the JOBS Act mandated the Securities and Exchange Commission to amend applicable rules within 90 days of its enactment (i.e., July 5, 2012) in order to eliminate the prohibitions against general solicitation or general advertising in Rule 506 of Regulation D under the Securities Act of 1933, as amended, and under Rule 144A under the Securities Act. In August 2012, the Commission proposed a new Rule 506(c) and an amendment to Rule 144A to implement Title II. During an open meeting on July 10, 2013, the Commission issued two releases (33-9414 (bad actor) and 33-9415 (Rule 506, Rule 144A and Form D)) which adopted new rules. For more information on the adopted rules, please click here.