Since the last issue of our IM Update we have also published the following separate Client Alerts of interest to the investment management industry:
July 18, 2013
On July 12, 2013, the Internal Revenue Service issued Notice 2013-43, postponing a number of deadlines under the Foreign Account Tax Compliance Act (“FATCA”).
July 15, 2013
On July 10, 2013, the SEC adopted an amendment to Rule 506 of Regulation D (“Rule 506”) to allow issuers to engage in “general solicitation” and “general advertising” in certain offerings made under Rule 506, promulgated pursuant to the Jumpstart Our Business Startups Act (the “JOBS Act”). Also on July 10, 2013, the SEC adopted amendments to Rule 506 to disqualify issuers and other market participants from relying on Rule 506 if “felons” and other “bad actors” participate in the Rule 506 offering.
July 12, 2013
On July 12, 2013, the CFTC adopted final guidance regarding the cross border application of the new derivatives requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”), as well as an interim final exemptive order that phases in the relevant requirements.
July 3, 2013
On June 13, 2013, the SEC filed an order settling administrative proceedings against eight former directors of five Regions Morgan Keegan open- and closed-end funds that had been heavily invested in securities backed by subprime mortgages in the lead-up to the 2008 financial crisis. In the Order, the SEC found that the Directors caused the Funds to violate Rule 38a-1 under the Investment Company Act of 1940, which requires funds to adopt and implement written policies and procedures reasonably designed to prevent violations of the federal securities laws.
July 1, 2013
In a case of first impression, the U.S. Court of Appeals for the Second Circuit ruled on June 27, 2013 that litigation time limits known as “statutes of repose” are not “tolled” or extended by the fact that a would-be plaintiff holding an alleged claim is an unnamed class member in a pending securities class action.
June 26, 2013
A pair of recent enforcement actions brought by the SEC reflect the agency’s continued focus on China-based issuers listed in the U.S. In the most recent case filed against a China-based issuer, the SEC charged China Media Express and its Chairman and CEO on June 20, 2013 with fraudulently misrepresenting its financial condition to investors in SEC filings dating back to November 2009. The China Media action comes on the heels of the SEC’s May 15, 2013 filing against RINO International Corporation (“RINO”), a China-based manufacturer and servicer of equipment for the Chinese steel industry, and its Chairman and CEO. Both companies initially listed on U.S. exchanges via reverse takeover transactions.
June 14, 2013
On June 5, 2013, the SEC voted unanimously to propose significant new reforms for money market funds primarily in response to the risk of runs on money market funds during times of economic stress.
June 5, 2013
In a three-count indictment unsealed on May 28, 2013, the U.S. Attorney’s Office for the Southern District of New York alleged that the owners, founders and managers at Liberty Reserve, an online currency exchange, conspired to launder six billion dollars over the last seven years. The indictment followed a coordinated effort by law enforcement agencies in seventeen countries around the world as part of the largest international money laundering prosecution in history.
June 4, 2013
On May 16, 2013, the CFTC adopted several rules relating to swap execution. These much-anticipated rules make three significant changes to the regulatory framework for derivatives: first, they create a new regulated entity – the registered swap execution facility (“SEF”); second, they detail the minimum trading functionality required of SEFs; and, third, they implement a trade execution requirement that mandates that certain swaps be executed on a SEF or a designated contract market (“DCM”). Collectively, these rules, together with the mandatory clearing requirement for certain derivatives, will transform how swaps and other derivatives are traded.