Corporate & Securities Law

Mississippi Proposes Permanent

Posted on February 16, 2010
Mississippi Proposes Permanent Securities RulesWhile temporary rules are in effect from January 1, 2010, Mississippi has proposed permanent rules to align with the new Mississippi Securities Act that took effect on January 1, 2010. The anticipated effective date for the proposed rules is April 13, 2010 following a hearing on the rules March 9, 2010 at 9:00 a...

IASB Abandons IFRS Convergence

Posted on February 15, 2010
IASB Abandons IFRS Convergence as Independent ObjectiveThe IASB oversight committee has abandoned the convergence of IFRS and GAAP as an independent objective in favor of a strategy of promoting and facilitating the adoption of IFRS. The new approach was announced as part of comprehensive changes to the governance of the IASB...

Code of Conduct Adopted for German

Posted on February 15, 2010
Code of Conduct Adopted for German Investment CompaniesThe German Federal Financial Supervisory Authority (BaFin) has approved a Code of Conduct for investement companies. A main principle of the code is that all German investment companies must act in the sole interest of investors and the integrity of the markets...

Legal and Corporate Communities

Posted on February 15, 2010
Legal and Corporate Communities Ask Supreme Court for Uniform Federal Rule on IRS Discovery of Tax Accrual Work PapersTwo Fortune 500 companies and a global law firm have asked the Supreme Court to hear the Textron appeal and provide national consistency and certainty on when the IRS can discover attorney tax accrual work papers used to inform the audit firm preparing the company?s financial statements...

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Washington State Proposes Amendments

Posted on February 12, 2010
Washington State Proposes Amendments to Mortgage Paper Securities RulesRules providing optional registration for mortgage paper securities would be amended by the Washington Department of Financial Institutions to strengthen investor suitability requirements; revise the formula for calculating the number of investors that may participate in a loan; revise net worth and bonding requirements to better protect investors; address concerns regarding agreements with escrow agents who hold payments for purchasing mortgage paper securities; set forth requirements for servicing and participation agreements; clarify the fiduciary duties of mortgage broker-dealers and investors' rights to receive and access records and information concerning their investments; codify the requirement for including a disclaimer in mortgage paper security advertisements; and clarify that expired mortgage broker-dealer and mortgage broker-dealer representative licenses terminate if not renewed before the expiration of the issuer's securities registration...

Fate of Bi-Partisan Reform Legislation

Posted on February 12, 2010
Fate of Bi-Partisan Reform Legislation Hangs on Freshman Senator from Tennessee With talks between Senate Banking Committee Chair Chris Dodd (D-Conn) and Ranking Member Richard Shelby (R-Ala) having reached an impasse, Senator Bob Corker (R-Tenn) has agreed to work with Chairman Dodd to see if a bipartisan approach to a financial regulatory reform bill in the Senate is possible...

Jobs Bill Would Establish New Reporting

Posted on February 11, 2010
Jobs Bill Would Establish New Reporting Regime for Foreign Financial Institutions with US Investors, Including Hedge Funds and Private Equity FundsThe Chair of the Senate Finance Committee and the Ranking Member have agreed to the Hiring Incentives to Restore Employment Act (HIRE) and this legislation is on the fast track...

Securitization ``Skin in the Game''

Posted on February 11, 2010
Securitization ``Skin in the Game'' Requirement in Reform Legislation May Be ProblematicA bedrock principle of legislative efforts to reform the securitization markets is that loan originators should be required to retain a percentage of the packaged asset-back securities...

European Commission Allows Exchange

Posted on February 10, 2010
European Commission Allows Exchange of Audit Work Papers with Swiss, Japanese and Canadian Audit Overseers; Now Looks to PCAOBThe European Commission has decided to allow EU audit oversight authorities to exchange audit work papers with the audit oversight boards in Japan, Canada and Switzerland, while hoping to ultimately bring the US into such an arrangement...

Global Consensus Building For Legislation

Posted on February 10, 2010
Global Consensus Building For Legislation to Reform and Restart Securitization MarketsWith the US House having passed legislation reforming securitization as part of broader regulatory reform, there is a growing global consensus that restarting private-label securitization markets under a reformed regulatory regime is critical to limiting the fallout from the credit crisis...

Two CFOs Named to IASB to Bring

Posted on February 09, 2010
Two CFOs Named to IASB to Bring Practical Experience in Preparing Financial StatementsTwo chief financial officers have been named members of the International Accounting Standards Board. Dr. Elke König of Germany and Darrel Scott of South Africa will begin their five-year terms as full-time members of the IASB in July and October 2010 respectively...

Hedge Fund Industry Supports EU

Posted on February 09, 2010
Hedge Fund Industry Supports EU OTC Derivatives Legislation; Wants CCP Global CompetitionThe hedge fund industry generally supports the broad concepts for derivatives legislation set forth by the European Commission as the EU commits to the passage of legislation this year...

UK Supreme Court Rules Market Value

Posted on February 09, 2010
UK Supreme Court Rules Market Value of Managing Director's Securties Did Not Have to Account for Special Employment-Related PriceGiving an objective meaning to the term market valuation, the UK Supreme Court ruled that a managing director who sold his employment-related securities at a special price pursuant to a subscription agreement when all of the company?s shares were purchased was properly taxed at ordinary income rather than capital gains for the difference between the special price and what a hypothetical purchaser would have paid...

Hong Kong SFC Official Examines

Posted on February 09, 2010
Hong Kong SFC Official Examines Investor Protection Proposals and Outlines Renminbi-Denominated DerivativesThe Hong Kong Securities and Futures Commission has received broad support for its proposed rulemaking to enhance disclosure to investors about derivatives and other unlisted structured financial products...

Irish Officials Urge Systemic Approach

Posted on February 08, 2010
Irish Officials Urge Systemic Approach to Corporate Governance while Retaining Comply or Explain CodeSenior officials of the Irish Stock Exchange recently emphasized that it is critical that Ireland look at corporate governance in a more systemic and holistic way and not merely as a check-box-exercise...

UK FSA Proposes Enhanced Corporate

Posted on February 08, 2010
UK FSA Proposes Enhanced Corporate Governance RegimeThe UK Financial Services Authority has proposed significant enhancements to its corporate governance rules centering on an enhance role of non-executive directors and board risk committees. Under the Financial Services and Markets Act, the FSA is empowered to regulate persons who have a significant influence on a firm?s affairs...

NASAA Opens Registration for 25th

Posted on February 05, 2010
NASAA Opens Registration for 25th Annual Public Policy ConferenceThe North American Securities Administrators Association (NASAA) has now opened registration for its 25th Annual Public Policy Conference. The conference, which examines key public policy issues by bringing together securities regulators, financial service industry representatives, and consumer groups, will be held at the Washington Court Hotel in Washington, D...

SEC Amends Money Market Fund RulesThe

Posted on February 03, 2010
SEC Amends Money Market Fund RulesThe SEC has amended the rules for money market funds and SEC Chair Mary Schapiro said the new rules are only the beginning. The SEC is continuing to consider more fundamental changes to the structure of money market funds, including a floating net asset value, real time disclosure of shadow net asset values and a private liquidity facility for money market funds to use in times of market stress...

Obama-Volcker Proposals Separating

Posted on February 02, 2010
Obama-Volcker Proposals Separating Banks and Hedge Funds Gain International BackingThere is a growing international consensus that the recent proposals by President Barack Obama and former Fed Chair Paul Volcker to separate core commercial banking from some higher-risk securities and hedge fund activities in financial conglomerates and to place a moratorium on further consolidation could help to avoid a new financial crisis by resolving some major risks inherent to the current financial system...

Industry Groups Ask Supreme Court

Posted on February 01, 2010
Industry Groups Ask Supreme Court to Overturn Ruling that IRS Can Obtain Tax Work Papers for Financial StatementsFinancial industry groups have asked the US Supreme Court to review a First Circuit ruling that tax accrual work papers are discoverable by the IRS since they are done for SEC-mandated financial statements and not litigation...

SEC, FSA Officials Meet to Continue

Posted on February 01, 2010
SEC, FSA Officials Meet to Continue Strategic DialogueSEC Chairman Mary Schapiro met with U.K. Financial Services Authority Chairman Adair Turner and Chief Executive Hector Sants in London as part of the SEC-FSA Strategic Dialogue. The purpose of the Dialogue, established in 2006, is to engage at the senior levels of the two agencies on current matters affecting the U...

2nd Circuit Affirms Fund Conflicts

Posted on January 28, 2010
2nd Circuit Affirms Fund Conflicts DismissalThe 2nd Circuit upheld the dismissal of actions brought by shareholders of two mutual funds affiliated with Morgan Stanley. According to the complaints, the Morgan Stanley broker-dealers affiliated with the funds suffered from internal conflicts of interest...

Commission Strengthens Money Market

Posted on January 28, 2010
Commission Strengthens Money Market RegulationsThe SEC adopted new rules designed to significantly strengthen the regulatory requirements governing money market funds. The new rules are intended to increase the resilience of money market funds to economic stresses and reduce the risks of runs on the funds by tightening the maturity and credit quality standards and imposing new liquidity requirements...

SEC Staff Updates Interpretations

Posted on January 27, 2010
SEC Staff Updates Interpretations under Reg. S-K and Enhanced Proxy Dislcosure TransitionThe SEC Division of Corporation Finance has updated its compliance and disclosure interpretations to add new questions and answers under Regulation S-K and the proxy disclosure enhancements transition...

FSA Chair Says Bank Fair Value

Posted on January 25, 2010
FSA Chair Says Bank Fair Value and Loan Loss Accounting Can Add to Systemic Risk; Notes Tension Between Banking and Securities RegulatorsFair value mark-to-market accounting and accounting for loan losses as applied to banks can increase pro-cyclicality and pose a systemic risk, said UK Financial Services Authority Chair Adair Turner, and thus is linked to macro-prudential risk regulation...

Oral Argument Set and Merits Brief

Posted on January 25, 2010
Oral Argument Set and Merits Brief Filed in Supreme Court Case Involving Extraterritorial Reach of US Securities LawsThe US Supreme Court has scheduled oral argument for March 29, 2010 on the extraterritorial reach of the US federal securities laws in what appears to be the first foreign cubed case to ever reach the Court...

Financial Stability Board Welcomes

Posted on January 25, 2010
Financial Stability Board Welcomes Obama Proposal on Bank Proprietary Trading As It Readies Similar Proposal for G-20The Financial Stability Board welcomes the Obama Administration?s proposals for reducing the risk of moral hazard by prohibiting banks and financial institution that contain a bank from owning, investing in or sponsoring a hedge fund or a private equity fund, or engaging in proprietary trading operations unrelated to serving customers for their own profit...

Financial Crisis Inquiry Commission

Posted on January 24, 2010
Financial Crisis Inquiry Commission Hearings Reveal Broad Support for Legislation to Regulate OTC DerivativesRecent hearings of the Financial Crisis Inquiry Commission revealed deep and broad support among regulators and financial industry leaders for federal legislation regulating OTC derivatives...

Audit Firm Governance Code Adopted

Posted on January 24, 2010
Audit Firm Governance Code Adopted in UKA working group sponsored by the UK Financial Reporting Council has adopted a governance code for the auditors of listed company financial statements. The Audit Firm Governance Code will cover global audit firms that audit the accounts of 95 per cent of the companies listed on the London Stock Exchange...

Claim that Hedge Funds Filed False

Posted on January 23, 2010
Claim that Hedge Funds Filed False 13Ds with SEC as Part of Creeping Takeover Goes Forward in Delaware CourtAn acquiring company stated a claim for common law fraud against hedge funds that engaged in a creeping takeover of a target company under the cover of allegedly false Section 13 beneficial ownership filings...

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