On November 20, 2013, in a broadcast streamed live on the internet, the CFPB unveiled the long awaited final rule that contains the Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (“RESPA”), Regulation X, and the Truth-In-Lending Act (“TILA”), Regulation Z.
CFPB Unveils New Integrated Disclosures Under RESPA and TILA
IM Guidance Update Clarifies Stance on Aggregating the Investments of Certain Investors Across Funds to Satisfy Qualified Client Standard
In November 2013, the Division of Investment Management of the Securities and Exchange Commission (the “SEC”) issued an IM Guidance Update regarding the status of certain investors in private funds (including hedge funds and private equity funds) as “qualified clients” as defined in Rule 205-3 under the Investment Advisers Act of 1940 (the “Advisers Act”).
A Compilation of Enforcement and Non-Enforcement Actions
SEC Focused on Compliance Programs
The Securities and Exchange Commission (SEC) continues to be very focused on compliance programs, and is bringing more enforcement actions to drive home the importance of maintaining a good compliance program. This means the relationship between a board of directors and the fund’s chief compliance officer is of utmost importance.
FDCPA & More: CFPB Considers “Modern” Methods of Consumer Communications
On November 12, 2013, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) published an advance notice of proposed rulemaking (“ANPR”) in the Federal Register seeking information from the public about the operations, disclosures and practices used by debt collectors as well as creditors selling and collecting on their own consumer debts. The ANPR follows the CFPB’s July 2013 issuance of two guidance bulletins (“July 2013 Bulletins”) that address debt collection practices. The CFPB continues to explore ways to uniformly apply federal debt collection requirements to both creditors and debt holders—which are generally exempted from the requirements of the Fair Debt Collection Practices Act (“FDCPA”) when collecting on their own debts—and third- party debt collectors.
SEC Proposes Rules for Crowdfunding Intermediaries
As described in our Client Newsflash entitled “SEC Proposes Crowdfunding Rules under JOBS Act,” the Securities and Exchange Commission (“SEC”) recently proposed rules under the JOBS Act (the “Proposed SEC Rules”) that would permit certain private issuers to raise investment capital through “crowdfunding”—a process of enabling a large number of investors to each make relatively small investments in an issuer via the Internet.
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Antitrust Lessons Drawn from the Challenges Contacts of the AMR/US Air Merger
Introduction
The proposed merger of the bankrupt AMR Corporation (parent company of American Airlines – hereinafter American) with US Airways Group, Inc. (parent company of US Airways – hereinafter US Airways) to create the new American Airlines was announced in February 2013. Despite the European Commission’s (EC) August 5 clearance of the merger with minimal commitments, the Antitrust Division of the U.S. Department of Justice (DOJ), joined by seven states and the District of Columbia, brought suit to permanently enjoin the merger on August 13. United States v. US Airways Group, Inc., 1:13-cv-01236 (D.D.C. Filed Aug. 13, 2013). The content of the DOJ’s complaint (Complaint) demonstrate the DOJ’s modus operandi for litigating a merger.
Summary of Selected Issues of the SEC Municipal Advisor Rule that Affect Broker-Dealers Intending to be Underwriters
Dodd Frank Act Definition of “Municipal Advisor”
A “municipal advisor” is a person (including a firm or an associated person) (but not including a municipal entity or an employee of a municipal entity) who (1) provides “advice” to “municipal entities” or “obligated persons” on the “issuance of municipal securities” or “municipal financial products,” or (2) undertakes a “solicitation of a municipal entity.”
Selling Your Company: Deal Structure to Unlock Additional Value
Most sellers know that preparing for a sale requires certain homework, such as cleaning up business and corporate records, and considering key employee retention arrangements. Another important way to prepare for a sale is to be ready to negotiate deal structure.
Prospectus Disclosure Regime in Europe — the Proportionate Disclosure Regime and Supplementary Prospectuses
Regulators have recently clarified two important aspects of the prospectus regime that applies across the European Economic Area pursuant to the Prospectus Directive (Directive 2003/71/EC as amended by Directive 2010/73/EU). The Prospectus Directive provides the overarching European regulatory framework for the publication of prospectuses in connection with debt and equity securities being offered to the public or admitted to trading on regulated markets in the EEA.
SEC Investor as Purchaser Subcommittee Issues Recommendations Related to Broker-Dealer Fiduciary Duty
The Investor as Purchaser Subcommittee (the “Subcommittee”) of the SEC’s Investor Advisory Committee (the “Committee”) issued two principal recommendations (the “Recommendations”) regarding SEC adoption of a uniform standard of duty for investment advisers and broker‑dealers engaged in the delivery of personalized investment advice to retail investors.