The European Securities and Markets Authority published the Memorandum of Understanding it entered into with the Hong Kong Securities and Futures Commission on December 19, 2014. The MoU was established further to the European Markets Infrastructure Regulation, under which ESMA is required to set out cooperation arrangements between ESMA and non-EU authorities whose legal and supervisory framework for CCPs are deemed to be equivalent to the European requirements. The MoU provides ESMA with the tools to monitor the ongoing compliance of CCPs with the recognition conditions under EMIR and deals with topics such as requests for information, on-site inspections and confidentiality. The MoU is effective from December 19, 2014.

View the MoU.

The OCC issued the "Litigation and Other Legal Matters" booklet of the Comptroller’s Handbook which replaces the booklet of the same title issued in February 2000. The revised booklet provides guidance to examiners assessing a bank’s litigation exposures, associated risks, and risk management practices.

View the booklet titled "Litigation and Other Legal Matters".

A consultation paper was published setting out proposals to reform the UK financial services trade association landscape. The proposals emerge from a steering committee set up to assess the UK trade association framework. The steering committee is made up of ten retail and commercial banks in the UK — Barclays, Clydesdale Bank, HSBC, Lloyds Banking group, Nationwide Building Society, Santander UK, The Co-operative bank, The Royal Bank of Scotland, TSB Bank and Virgin Money. The key proposal is for a single trade association representing the payments, mortgage, retail, wealth, SME and commercial banking sectors to be formed to ensure more effective and efficient service to the industry. Trade associations that would contribute to this effort include the Asset Based Finance Association, Association for Financial Markets in Europe, British Bankers’ Association, Council of Mortgage Lenders, Finance & Leasing Association, Intermediary Mortgage Lenders Association, Investment Management Association, Payments Council, Tax Incentivized Savings Association, TheCityUK, UK Cards Association and Wealth Management Association. Responses to the consultation are due by April 10, 2015 following which recommendations and a proposed action plan for implementing the changes will be published. A final recommendation is expected in May 2015.

View the consultation paper.

The European Banking Authority published its second impact assessment report for the liquidity coverage ratio requirements under the Capital Requirements Directive and Capital Requirements Regulation, together known as CRD IV. The report is based on data provided by 322 European banks and concludes that the LCR is not expected to have a material detrimental impact on the business and risk profile of EU-established institutions. This is mainly because EU institutions have significantly improved their compliance with LCR requirements and the potential for making adjustments to balance sheets to meet LCR requirements.

View the report.

The SEC announced that beginning on February 14, 2015, the rates applicable to most securities transactions will be set at $18.40 per million dollars. Each self-regulatory organization will continue to pay the SEC a rate of $22.10 per million for transactions occurring on charge dates through February 13, 2015 and will begin paying the new quoted rate on charge dates on or after February 14, 2015. The assessment on security futures transactions will remain unchanged at $0.0042 for each round turn transaction.

View the SEC order.

The US Federal Reserve Board and the US Federal Deposit Insurance Corporation made portions of resolution plans, for firms with generally less than $100 billion in qualifying nonbank assets, publically available. Certain banking organizations with total consolidated assets of $50 billion or more and nonbank financial companies designated for enhanced prudential supervision by the Financial Stability Oversight Council are required to periodically submit resolution plans to the Federal Reserve Board and the FDIC. A resolution plan contains both a public and confidential section describing the company’s strategy for rapid and orderly resolution in the event of material financial distress or failure of the company. The FDIC also released the public sections of the recently filed resolution plans of 22 insured depository institutions, the majority of which are subsidiaries of bank holding companies. The insured depository institution plans are mandated by a separate regulation issued by the FDIC requiring a covered insured depository institution with assets greater than $50 billion to submit a plan under which the FDIC might resolve the institution under the Federal Deposit Insurance Act.

View the public portions of resolution plans required by the Federal Reserve Board.

View the public portions of resolution plans required by the FDIC.

The FDIC announced the appointment of Charles Yi as the agency’s new general counsel.

The European Banking Authority published for consultation draft Implementing Technical Standards which set out the procedures, forms and templates for the preparation of resolution plans by resolution authorities. To obtain the information needed to prepare a resolution plan for a particular firm, the EBA is proposing that resolution authorities first request the information from the firm’s national regulator. If the national regulator does not have the relevant information or the information is not available in the required format, then the resolution authority may approach the firm directly for the information. When a firm provides the information to the resolution authority, it must do so using the proposed forms and templates. The forms and templates are in Excel format and cover organizational structure, governance and management, critical functions and core business lines, critical counterparties, structure of liabilities, funding sources, off-balance sheet, payment systems, information systems, interconnectedness, authorities and legal framework, in line with the required information under the Bank Recovery and Resolution Directive. The forms and templates will be the minimum set of harmonized information which group-level resolution authorities must share with the EBA, relevant EU resolution authorities and national regulators, as required under the BRRD. Responses to the consultation are due by April 14, 2015.

View the consultation paper.

The Office of the Comptroller of the Currency ("OCC") issued the "Retail Nondeposit Investment Products" booklet of the Comptroller’s Handbook which replaces a similarly titled booklet issued in February 1994. This revised booklet provides updated guidance to examiners on national banks and federal savings associations regarding the recommendation or sale of nondeposit investment products to retail customers. It includes an overview of bank delivery channels and the regulatory structure and requirements supplementary with banks offering these products. The revised booklet describes the risks inherent in offering such products and offers a framework for managing such risks.

The OCC issued the "Conflicts of Interest" booklet of the Comptroller’s Handbook which replaces a booklet of the same title issued in June 2000. This booklet has been revised to include the supervision of federal savings associations and includes updated guidance for examiners on risks and expected controls over conflicts of interest that may arise in asset management activities. The booklet explains the risks inherent in such conflicts and provides a structure for managing those risks.

View the booklet titled "Retail Nondeposit Investment Products".

View the booklet titled "Conflicts of Interest".
 

The US Securities and Exchange Commission ("SEC") adopted final rules regarding security-based swap data repository ("SDR") registration, duties and core principles in accordance with Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), which authorizes the SEC to regulate security-based swaps and to take steps to encourage accountability and transparency in this market. Adopted under the Securities Exchange Act of 1934, the final rule establishes a registration process for SDRs and requires SDRs to comply with certain duties and core principles regarding maintaining data and when and how a repository’s data could be accessed. It also establishes a requirement for SDRs to have a Chief Compliance Officer and other governance requirements. The SEC’s rules require all swaps to be reported within twenty-four hours until more study is done to refine the timing.

View the press release on the FDIC website.

View the related SEC Open Meeting Agenda.

The UK Payment Systems Regulator announced three new senior appointments: Carole Begent as head of legal from April 1, 2015; Mark Falcon as head of regulatory policy and strategy from March 2, 2015; and Louise Buckley as head of stakeholder engagement and communications from January 26, 2015.

HM Treasury published the Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) Regulations 2015 ("the Amending Regulations") together with an explanatory memorandum. The Regulations amend the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014, which implemented all of the capital buffers under the Capital Requirements Directive except for the Systemic Risk Buffer and the Other Sysemically Important Institutions buffer. The Amending Regulations introduce the SRB for banks and investment firms. Capital buffers require firms to hold additional amounts of capital on top of their minimum capital requirements. Under CRD, member states are able to decide which firms should meet the SRB and must notify the European Commission, European Systemic Risk Board, European Banking Authority and national regulators of the reasons for use of the SRB. The SRB would apply to banks and building societies with deposits of more than £25 billion (i.e. it will apply to ring-fenced banks under the bank structural reform requirements), The Financial Policy Committee of the Bank of England will be responsible for setting the SRB and the Prudential Regulation Authority will apply the SRB on an entity-by-entity basis. The SRB is applicable from January 1, 2019.

View the Regulations.

View the explanatory memorandum.

The UK Banking Standards Review Council appointed Alison Cottrell as its first Chief Executive from April 2015.

The participants of the US-EU Financial Market Regulatory Dialogue met to discuss key regulatory topics including the implementation of Basel III capital, leverage, derivatives reforms, benchmarks and developments on cross-border resolution. Amongst other issues, the Financial Stability Board’s proposals for an international minimum standard on total loss absorbing capacity were welcomed and EU participants raised concerns about the Volcker Rule’s effect on foreign funds. The participants included representatives of the European Commission, the European Securities and Markets Authority, the Securities Exchange Commission, US Treasury, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Commodity Futures Trading Commission. The next meeting will take place in Brussels, Belgium in July 2015.

View the joint US-EU Financial Market Regulatory Dialogue statement.

The European Securities and Markets Authority issued a report on its involvement with the supervisory colleges established under the European Market Infrastructure Regulation for the authorization and supervision of EU-based central counterparties. Supervisory colleges are the channels through which information between home and host authorities is exchanged and through which supervisory activity is coordinated. ESMA is required under EMIR to maintain a coordinating role between national regulators and colleges so as to encourage consistent supervisory practices.

View the report.

The SEC named Walter Jospin Regional as Director of its Atlanta Office.

The US Department of the Treasury (“US Treasury”), acting for the US Financial Stability Oversight Council (“FSOC”), issued a proposed rulemaking aimed to implement the Qualified Financial Contract (“QFC”) recordkeeping requirements of the Dodd-Frank Act. The proposed rules would apply to financial companies with $50 billion or more in consolidated assets, financial companies designated by the FSOC, as well as financial affiliates of these companies and would require recordkeeping of positions, counterparties, legal documentation and collateral. This information is needed to help the Federal Deposit Insurance Corporation (“FDIC”) as receiver to, among other things, decide whether to transfer QFCs, evaluate the consequences of decisions to transfer, disaffirm or permit the termination of QFCs with one or more counterparties, and conclude whether any financial systematic risks are posed by the transfer, disaffirmation or termination of such QFCs in the case of a distressed situation. The deadline for comments is April 7, 2015.

View the US Treasure press release.

View the Federal Register notice of proposed rulemaking.

The FDIC named Michael J. Dean as Atlanta Regional Director.

The Federal Reserve Board appointed Thomas Laubach as director of the Division of Monetary Affairs.

Three Delegated Regulations of Regulatory Technical Standards required under the Credit Ratings Agencies Regulation were published in the Official Journal of the European Union:

1. Delegated Regulation for the periodic reporting on fees charged by credit rating agencies for the purpose of ongoing supervision by the European Securities and Markets Authority. This applies from January 26, 2015. 

2. Delegated Regulation for the presentation of the information that credit rating agencies make available to ESMA. This applies from June 21, 2015. 

3. Delegated Regulation on disclosure requirements for structured finance instruments. This applies from January 1, 2017.

The objectives of the CRA Regulation include strengthening the existing EU legislation on credit rating agencies, reducing financial institution reliance on external credit ratings and improving competition in the credit ratings industry.

View the Regulations.

Pursuant to a notice published in the Federal Register on January 5, 2015, the US Commodity Futures Trading Commission reopened the comment period, and issued a clarification regarding the reopened comment periods, for two position limit rulemakings. On December 9, 2014, the CFTC Agricultural Advisory Committee convened to discuss, among other things, deliverable supply exemptions for hedging positions. To allow commenters enough time to respond to questions raised at the meeting, the CFTC extended the comment periods for an additional 45 days. The CFTC clarified that, in addition to commenting on agenda issues pertaining to agricultural commodities, comments may also include the issues raised at the meeting or in the associated materials posted to the CFTC’s website. The comment period closes January 22, 2015.

View the CFTC press release.

The FDIC issued a list of state non-member banks which were evaluated for compliance with the Community Reinvestment Act. The list relates to evaluation ratings that the FDIC assigned to institutions in October 2014. All of the banks rated received either satisfactory or outstanding ratings. The CRA was instituted in 1977 in order to encourage insured banks and thrifts to meet local credit needs, including those of low-income neighborhoods. Included in the Financial Institutions Reform, Recovery and Enforcement Act of 1989, Congress mandated that the public disclosure of the results of each bank and thrift that undergoes a CRA examination.

View the monthly list of banks examined for CRA compliance.

View the January 2015 list of banks examined for CRA compliance.

The SEC introduced a pilot program intended to simplify investor analysis and comparisons of public company financial statement data. The new program will organize data provided by companies into structured data sets which can be used for bulk downloads on the SEC’s website by investors. The SEC anticipates that such data sets will be expanded in 2015 to contain data in footnotes to the financial statements.

View examples of financial statement structured data sets.

The Board of Governors of the Federal Reserve along with other regulatory agencies responsible for implementing the Volcker Rule added an additional question under the Volcker Rule Frequently Asked Questions page relating to metrics reporting and confidentiality under the Freedom of Information Act. The updated FAQs indicate that the agencies will maintain the confidentiality of the reported information to the extent permitted by law and encourages entities subject to Appendix A of the Volcker Rule to evaluate potential exemptions and ask for confidential treatment if appropriate, including under Exemption 4 of the FOIA, which exempts confidential trade secrets and commercial information from disclosure. 

View the updated Volcker Rule FAQs.