SEC Chairman Jay Clayton Released a Statement on Cybersecurity In the statement Chairman Clayton recognized that the most diligent cybersecurity efforts will not address all risks, but that a successful program must include assessment, prevention, mitigation, resilience and recovery. You can read the full text of Chairman Clayton's statement here.
Risk Alert Highlights Improper Use of Gross Returns Among Other Advertising Infractions In its September Risk Alert, the SEC's National Examination Program addresses the most frequent advertising rule compliance issues seen in examinations. Highlights are (i) misleading performance results (ii) misleading one-on-one presentations (iii) misleading claim of compliance with voluntary performance standards (iv) cherry-picked profitable stock selections (v) misleading selection of recommendations and (vi) compliance policies and procedures. The alert also highlights specific results from the SEC's touting initiative. The full text of the alert can be found here.
SEC Issues Report Highlighting Digital Assets May be Treated as Securities SEC's enforcement division found that DAO (Decentralized Autonomous Organization) tokens are securities under the Securities Act of 1933 and the Securities Exchange Act of 1934, and warns those issuing blockchains that they should take appropriate steps to ensure compliance with U.S. federal securities laws. The full report can be reviewed here.
The CFTC's Enforcement Director Discusses Self-Reporting and Cooperation CFTC Division of Enforcement Director James McDonald announced a series of self-reporting and cooperation advisories. In the advisories, the Division sets forth the factors it will consider if a person chooses to self-report a violation and/or cooperate with the Division. The Advisories can be reviewed here.
CFTC Chairman Giancarlo Discusses Regulatory Initiatives In two recent speeches, the CFTC Chairman discussed his views on likely regulatory reform efforts relating to swaps over the course of the year, as well as regulatory comparability among commodity interest products. The full speeches can be reviewed here.
OCC Releases Bank Supervision Plan for FY 2018 The OCC released its bank supervision operating plan for fiscal year 2018, which includes the following areas: (i) cybersecurity and operational resiliency; (ii) commercial and retail credit loan underwriting, concentration risk management, and the allowance for loan and lease losses; (iii) business model sustainability and viability and strategy changes; (iv) Bank Secrecy Act/anti-money laundering (BSA/AML) compliance management; and (v) change management to address new regulatory requirements. The plan can be found here.
Banking Agencies Propose Simplifying Regulatory Capital Rules The federal banking agencies proposed a rule intended to reduce regulatory burden by simplifying several requirements in the agencies' regulatory capital rule. The proposed rule would primarily apply only to banking organizations that are not subject to the "advanced approaches" in the capital rule, which are generally firms with less than $250 billion in total consolidated assets and less than $10 billion in total foreign exposure. The proposed rule simplifies the capital treatment for certain acquisition, development, and construction loans, mortgage servicing assets, certain deferred tax assets, investments in the capital instruments of unconsolidated financial institutions, and minority interest. The proposed rule can be read here.
Senate Confirms Quarles as Fed's Top Bank Regulator On October 5, 2017, the Senate voted to confirm Randal Quarles as the first-ever vice chairman for supervision of the Federal Reserve Board of Governors. The position of vice chairman for supervision was created by the Dodd-Frank Act to oversee the largest U.S. banks, but has never before been filled. Read here.