On August 21st, Risk.net summarized a letter sent to the Financial Stability Board signed by SEC Chair Mary Jo White on behalf of the OTC Derivatives Regulators Group. The letter asks the FSB to unambiguously request countries to remove privacy laws requiring firms to mask counterparty identification information. Unmasking.
On August 21st, New York Times columnist Floyd Norris discussed the conflicts of interest present in the auditing and credit rating industries and the difficulties regulators have faced in addressing those conflicts. Conflicting Conflicts. On August 18th, CFO.comreported on the SEC’s efforts to adopt conflict of interest rules for credit rating agencies. Credit Raters.
On August 21st, Reuters summarized what the G20 hopes to accomplish at its November meeting. Issues include capital cushions, termination agreements for derivatives, and repo reforms. Global Agenda.
Labor Department Seeks Information on Brokerage Windows
On August 20th, the Department of Labor issued a request for information (“RFI”) on the use of brokerage windows, self-directed brokerage accounts and similar features in 401(k)-type plans. The RFI seeks information concerning the scope of investment options typically available through a window; demographic and other information about participants who commonly use brokerage windows; the process of selecting a brokerage window and provider for a plan; the costs of brokerage windows; and what kind of information about brokerage windows and underlying investment options typically is available and disclosed to participants. Comments should be submitted on or before November 19, 2014. Department of Labor Press Release.
On August 20th, Reuters reported the asset management industry is reevaluating its international lobbying approach in light of indications that the Financial Stability Board (“FSB”) may impose market restrictions on asset managers in times of financial crisis. The FSB had originally considered designating the largest asset managers as systemically important. But when the industry objected to using size as the sole measurement, the FSB opened the possibility of regulating activities. Backfire.
Berkshire Hathaway to Pay $896,000 for Hart-Scott-Rodino Violations
On August 20th, the Federal Trade Commission announced Berkshire Hathaway Inc. has agreed to pay $896,000 in civil penalties to resolve allegations that it violated the Hart-Scott-Rodino Act’s (“HSR”) premerger reporting laws in connection with the 2013 acquisition of voting securities in USG Corporation. According to the FTC’s complaint, Berkshire Hathaway changed convertible notes it owned in USG into 21.4 million voting securities on December 9, 2013. As a result of the conversion, the value of its USG holdings exceeded $283.6 million, the premerger reporting threshold under the HSR Act at the time. The company subsequently made a corrective filing, and acknowledged that the transaction should have been reported under the HSR Act. Just six months prior, Berkshire Hathaway made a corrective filing in connection with a June 2013 acquisition of $41 million of voting securities in Symetra Financial Corporation, a transaction that resulted in Berkshire Hathaway holding Symetra voting securities valued at more than $283.6 million. The FTC took no action against Berkshire Hathaway following its first HSR Act violation, and relied on the firm’s assurances that it would implement appropriate HSR monitoring procedures going forward. FTC Press Release.
New York Fed Questions SEC’s Money Market Rules
On August 18th, the New York Federal Reserve Bank’s Liberty Street Economics blog discussed a recent New York Fed staff report which found that the possible imposition of restrictions on a financial intermediary’s ability to fulfill redemption requests may promote “preemptive runs.” Redemption Gates.