The Financial Stability Oversight Council’s (FSOC) recently revised guidelines (the 2019 Guidelines) on how it will identify and address financial stability risks are a major shift from the guidelines it issued in the immediate aftermath of the Financial Crisis.  The 2019 Guidelines draw upon lessons learned from FSOC’s ultimately fruitless attempts to designate nonbank financial companies as systematically important.  Instead, the 2019 Guidelines focus on identifying and regulating systemically important activities rather than entities, conducting…

The U.S. banking agencies have completed one of the most important steps towards rebalancing the U.S. bank regulatory framework since the Dodd-Frank Act was passed in the wake of the 2007 – 2008 financial crisis.  The agencies have adopted final rules to tailor enhanced prudential standards and U.S. Basel III capital and liquidity requirements for large banking organizations. These final tailoring rules implement section 401 of the Economic Growth, Regulatory Relief and Consumer Protection Act…

The Federal Reserve has finalized its rules to further tailor the regulatory framework for enhanced prudential standards and the U.S. Basel III capital and liquidity requirements applicable to domestic banking organizations and foreign banking organizations (Final Tailoring Rules).  Compared to the proposed rules that the U.S. banking agencies issued in October 2018 (for domestic firms) and in April 2019 (for foreign firms), the Final Tailoring Rules make very few changes. We will publish visual memoranda…

In a long-awaited milestone, the SEC has proposed an update of Guide 3, the industry guide for banking organizations.  The proposal eliminates a number of the current requirements under Guide 3 and streamlines many of those that remain.  The three “new” credit quality ratios in the proposal are, in practice, already included in most registrants’ disclosures, and thus are not significant new requirements. Our memorandum includes a table comparing the disclosures under Guide 3 with…

The Financial Standards Accounting Board (FASB) voted on Wednesday to propose delaying the implementation date of the Current Expected Credit Losses accounting standard (CECL) until 2023, for all companies other than larger SEC filers.  The proposal would reduce the number of implementation dates from three to two. Under the proposal, companies that must file or furnish financial statements with the SEC and which, in the most common fact pattern, have a market capitalization of more…

As 2018 came to a close, U.S. financial regulators continued to pursue anti-money laundering (“AML”) enforcement actions against financial institutions, announcing monetary penalties against and resolutions with three U.S. broker-dealers.  The Financial Crimes Enforcement Network (“FinCEN”), the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) announced on December 17, 2018 that they had issued parallel fines against UBS Financial Services Inc. (“UBSFS”) totaling $14.5 million for willful failures to comply with…

On December 19, 2018 the European Commission published the legislative proposals and delegated acts (the “Package”) which it had previously outlined in its Contingency Action Plan of November 13, 2018 to prepare for a “no-deal” scenario whereby the UK exits the EU on March 29, 2019 without a ratified withdrawal agreement in place. The Package includes 14 measures in a number of areas where a no-deal scenario may create major disruption for citizens…