August 21, 2013

Lighting a Fire Under Dodd-Frank Implementation?

Independent financial regulators met at the White House on Monday to discuss the implementation of the Dodd-Frank Act, and as this Bloomberg article notes, the President conveyed a “sense of urgency” in fully implementing the yet-to-be-adopted Dodd-Frank rules. The participants included the Treasury secretary, Comptroller of the Currency, the Director of the Consumer Financial Protection Bureau,, the Acting Director of the Federal Housing Finance Agency, and the chairs of the Board of Governors of the Federal Reserve System, the CFTC, the FDIC, the NCUA, and the SEC.

In a statement released after the meeting, the White House noted that the topics discussed included progress on implementing Dodd-Frank to date and what remained to be completed, as well as potential improvements to the housing finance system. Not surprisingly, the participants discussed the challenges faced by the current budget environment and the importance of providing adequate funding for independent regulatory agencies to achieve their core missions.

Will this sort of meeting break the logjam on Dodd-Frank rulemaking at the various financial regulators? Maybe not, as the agencies have no doubt already felt the same sense of urgency that the President feels as we begin this fourth year after Dodd-Frank was passed. Much of what is left to be done includes the most difficult aspects of the legislation, and as we discuss in the just mailed May-June issue of The Corporate Counsel, the rulemaking process has never been harder.

FINRA Updates Private Placement Form

With the increased focus on private placements as Rule 506(c) of Regulation D comes online next month, FINRA recently published Regulatory Notice 13-26 to announce updates to FINRA’s Private Placement Form, which is required to be filed pursuant to FINRA Rules 5123 and 5122. The updates to the Form are consistent with FINRA’s efforts to improve member firm due diligence in private placements.

Nilene Evans notes in the MoFo Jumpstarter blog:

FINRA states that the Form assists FINRA in prioritizing its review of private placement reviews. It notes that firms can respond “unknown” to any of the questions, although we believe answering “unknown” is likely to trigger heightened scrutiny by FINRA, particularly because the questions address basic diligence questions. FINRA’s statistics show that since July 1, 2013, on average, 18% of filers have answered “unknown” to at least one of the six questions: of these, approximately 28% have answered “unknown” to the question regarding SEC, FINRA, or state disciplinary actions or proceedings or criminal complaints within the last 10 years; and approximately 8% have answered “unknown” to the question whether the issuer has independently audited financial statements available for its most recent fiscal year.

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Study: Impact of Dodd-Frank on Community Banks
– Three Recent Surveys Provide Insights On Corporate Governance
– More on “Director Access to Attorney-Client Privileged Communications”
– Director Access to Attorney-Client Privileged Communications
– “End-User Exception” for Swaps: Governance Action Items for Companies

– Dave Lynn