Insight Robin Powers · July 11, 2011
Banks Ask for Margin Relief
The largest U.S. banks via a joint letter on June 29, 2011 asked the Commodities Futures Trade Commission (CFTC) to remove the requirement that overseas swap transactions be subject to margin requirements, regardless of whether the swap counterparty is an affiliate of a U.S. organization. This follows on the coattails of a letter written by seven large foreign financial firms in January who asked that their margin requirements be based on their home country regulation.
Insight Robin Powers · July 10, 2011
NYSE sees Growth in Derivatives in June
Uncertainty reigns in the derivatives market as regulators on either side of the Atlantic debate upcoming risk managements regulations, but this has hardly slowed the growth of the industry.
Insight Robin Powers · July 09, 2011
Britain and EU Differ over Derivatives Reform Rules
Last Monday, July 4, the EU announced that it won’t be prepared to make any decisions regarding derivatives regulation before September.
The European Market Infrastructure Regulation (EMIR) has hit a road block as a result of the inability of the European states to reach compromise on which types of derivatives should be cleared. The U.K. is in favor of a law requiring that all derivatives be cleared to mirror the requirements imposed by Dodd-Frank, while other EU states, and specifically the EU Parliament, have opined that legislation should only include off-exchange derivatives.
Insight July 08, 2011
Earlier this year in March, Amazon launched the Amazon Appstore, which was then a new avenue for buying Android apps. Almost immediately after the launch, Apple proceeded to file a trademark infringement suit against Amazon over the usage of the “Appstore” phrase. The case is contingent upon whether “app store” can be deemed a generic term that simply describes any app marketplace, as opposed to one of Apple’s trademarks – a unique, company-specific element that identifies the company’s brand and distinguishes its products and services from that of other companies.
Insight July 08, 2011
LegalZoom, as referenced in http://www.rimonlaw.com/blog/2011/05/31/e-law-firms-versus-document-mills, is an online service that allows people to economically generate their own legal documents, which are customized by a series of questions – think TurboTax for law. Though customized, the product is still based on a limited set of templates. LegalZoom is based in California, and was founded by Robert Shapiro, who is known for being part of O.J. Simpson’s defense team.
Insight Robin Powers · July 08, 2011
SEC and CFTC Differ in their Approach to Temporary Relief
Title VII of the Dodd-Frank Act gives authority to the Securities Exchange Commission (SEC) to regulate security-based swaps, while the Commodities Futures Trading Commission (CFTC) will generally be responsible for swaps markets. Both the SEC and CFTC have recently announced temporary relief will be available for some of the provisions under Title VII that are scheduled to go into effect July 16, 2011, though the agencies are not working in unison to create a comprehensive relief order for market participants.
The CFTC has categorized their relief order into four sections, ranging from those provisions that will automatically go into effect July 16, to those that cannot go into effect until express rule-making comes from the CFTC. The CTFC Order will expire December 31, 2011, absent further action from the CFTC.
Insight Robin Powers · July 07, 2011
Firms Oppose FDIC Claw Back Provision
On Wednesday (July 6, 2011), the Federal Deposit Insurance Corp. (FDIC) voted on a rule allowing the government to recover payments from both senior executives and directors who the FDIC determines to be “substantially responsible” for a financial firm’s failure. This rule, known as the “claw back provision,” is one of a many rules that the FDIC is responsible for drafting and implementing with respect to its new “post Dodd-Frank” liquidation powers. Dodd-Frank positioned the FDIC as supervisor over these firms and gave the FDIC authority to dismantle any large “too big to fail” institution before the need for government bailouts arises.
Insight Robin Powers · July 06, 2011
Dodd-Frank’s Impact on Private Equity Firms - Limited Private Fund Exemption
For hedge funds and private equity firms, anxiety over the new regulations brought by Dodd-Frank pivots on Title VII and a simple dilemma: new paperwork to be done and no one to do it. However, there is a loophole.
Dodd-Frank expands the requirements on US hedge funds and private equity firms to report directly to the Securities Exchange Commission (SEC). While over 3,000 private-fund advisors are already registered with the SEC, regulators anticipate that approximately 1,000 funds with be added to the SEC’s registry, nearly half of which will include large hedge funds and big private equity firms. Dodd-Frank not only extends the requirement on who must report, it also increases the amount of information that must be provided to regulators. Among the many additions, larger funds will now be mandated to report their total borrowings, the net asset value of every private fund, as well as monthly and quarterly performance.
Insight Robin Powers · July 05, 2011
Will SEC, CFTC Budget Cuts Impede Dodd-Frank?
It was not shocking to hear that both the SEC and the CFTC would have to extend their rulemaking deadlines, as their newly found responsibilities stemming from Dodd-Frank are certainly burdensome. It would have been nearly impossible for both agencies to cooperatively define key terms relating to the OTC derivatives market on top of creating hundreds of new rules in such a short time. Though the SEC and CFTC have both granted themselves extensions, many involved in the financial markets remain skeptical that either agency can accomplish their goals in time to meet even the extended deadline.
Insight Robin Powers · July 04, 2011
Fireworks over Dodd-Frank
As the United States celebrates her birthday amidst the financial reform that is Dodd-Frank, many people both at home and abroad are unhappy with the legislation and its potential repercussions.