Financial Services Spotlight

How Many Times Does the SEC Have to Repeat Itself Before the World Listens?

Posted by Joel S. Telpner on Dec 19, 2017 3:51:22 PM

Remember in July of this year when the Securities and Exchange Commission (SEC) said in its Decentralized Autonomous Organization (DAO) Report that "U.S. federal securities laws may apply to various activities, including distributed ledger technology, depending on the particular facts and circumstances, without regard to the form of the organization or technology used to effectuate a particular offer or sale"?[1] No? Well, apparently no one else did either.

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Topics: Munchee, blockchain, crypto currency, bitcoin

October and November Developments

Posted by Roy Andersen on Dec 8, 2017 8:40:22 AM


For the first time in my memory, the Congress passed a joint resolution to disapprove a final regulation of a federal agency—in this case the CFPB and the rule was related to arbitration clauses in contracts for consumer financial products. In addition, the agencies amended certain definitions under CRA and these changes should be reflected in CRA policies and procedures at banks. Both the OCC and FDIC published final rules on requirements for Qualified Financial Contracts and introduced required language for larger banks.

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Topics: CFPB, FDIC, Qualified Financial Contracts, Mortgage Servicing, QVC

Object Lesson on How Not to Respond to Consent and Enforcement Actions

Posted by Roy Andersen on Aug 31, 2017 11:53:18 AM

Last week, the DFS announced an enforcement action and charges against the NY Branch of Habib Bank, a Pakistani bank that had been doing business in NY for almost 40 years.

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May, June and July Developments

Posted by Roy Andersen on Aug 9, 2017 1:44:12 PM

With a straight face, President Trump has issued an executive order on June 20th that would expand Apprenticeship opportunities in the US in order to expand jobs. The CFTC has adopted some final rules on records administration and its whistleblower program. It has also introduced a new project to evaluate its system of rules to see where simplification is warranted. FinCEN is moving against a Chinese bank that helps North Korea.

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Topics: OFAC, CFTC, FDIC, FinCEN, Qualified Financial Contracts, NCUA, Consumer Financial Products

Proposed Fed Guidance for Bank Boards of Directors

Posted by Roy Andersen on Aug 7, 2017 10:05:29 AM

Yesterday the Fed published a proposed guidance document for its expectations for board of directors of banks. The release only applies to the boards of banks with over $50 billion in consolidated assets, but the intent of the Fed is to ease up on directors at all banks. The proposal was issued after an extensive review of the activities of bank boards and reflects independent directors’ dissatisfaction with the burdens that the regulators have been placing on bank directors.

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Topics: Banking, Bank Regulations, Supervision and Regulation, Federal Reserve

A Shot Across the Bow—and a Welcome One

Posted by Joel S. Telpner on Jul 27, 2017 11:09:07 AM

In the wild west of token sales, that some refer to as "initial token offerings," on July 25, the SEC finally jumped into the fray and said . . . well, actually, not that much. The SEC investigated, a decentralized autonomous organization (DAO) organized under German law, and issued a Report of Investigation in which the SEC concluded that violated U.S. federal securities laws in issuing its tokens because, in the view of the SEC, the tokens are securities under U.S. securities laws and were sold without being registered with the SEC or pursuant to an effective exemption from registration. 

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Topics: SEC, U.S. Securities Laws

Volcker Rule Developments

Posted by Roy Andersen on Jul 26, 2017 8:16:00 AM

Foreign Investment Funds

At the end of last week, the Fed and the other banking agencies issued an interpretation that applied to investments in certain foreign funds by foreign banking organizations that are subject to the Volcker rule. Such banks may control what is kno

wn as an excluded foreign fund until July 21, 2018, without having the investments made by such fund being subject to the Volcker rule. Under the Fed’s interpretation of the Volcker rule, certain investment funds sold exclusively outside the U.S. would be deemed subject to the Volcker rule if these funds were controlled by a foreign bank that was itself subject to the Volcker rule.

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Topics: Volcker Rule

Regulatory Relief for Foreign Banks in the Choice Act

Posted by Roy Andersen on Jun 9, 2017 12:00:00 AM

Just yesterday, the House of Representatives passed a version of a new banking bill (the “Choice Act”). The Choice Act makes scores of efforts to cut back on the regulatory regime created under Dodd-Frank Act. Many of the changes are of principal interest to domestic banks but the provisions dealing with regulatory relief will be of interest to foreign banks doing business in the U.S. 

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March and April 2017 Developments

Posted by Roy Andersen on May 26, 2017 12:00:00 AM


Donald Trump has made this newsletter obsolete. This covers two months and there are almost no new or even proposed rules. In fact, I am covering developments that in the past were deemed so picayune that I would have left them out. The CFPB has published 30 pages of corrections and elaborations to a rule that was “finalized” in 2015—will it ever end.

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Special Report on Donald Trump’s Effect on Regulatory Developments

Posted by Roy Andersen on Apr 28, 2017 9:21:00 AM

Donald Trump was not kidding when he said he was going to stem the tide of new regulations affecting American businesses. The effect in the banking area has been an astounding collapse in activity at the banking agencies. During the first four months of 2017 there has been a dramatic reduction in new and proposed regulations. A comparison to 2016 will highlight these differences across the 10 federal agencies that we follow in order to prepare the regulatory newsletter.

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About the Spotlight

The Financial Services Spotlight examines the regulatory and technology developments impacting banks, asset managers and other financial services providers—where challenges meet opportunities.


Meet the Authors

Roy C. Andersen, of counsel in Sullivan & Worcester's New York office, is a member of the Corporate Department. Mr. Andersen focuses on bank regulatory and compliance matters, including international banks and their branches and agencies in New York.

Joel Telpner, partner in the firm's New York office, is a seasoned advisor, strategist and problem solver. Mr. Telpner brings more than 30 years of legal experience in a career that includes time as an AmLaw 100 partner, the former U.S. general counsel of a global financial institution, and a venture capitalist. He is recognized for his ability to deftly manage complex financial transactions, especially those involving sophisticated structured finance and derivatives matters and has an extensive and unique combination of transactional and regulatory experience.

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