On Nov. 1, 2019, the US federal banking regulators published three final rules for both US banks and non-US banks with banking operations in the United States regarding prudential standards, liquidity management and resolution planning. In this edition of her New York Law Journal International Banking column, Kathleen A. Scott discusses the history of the rulemaking process and the highlights of all three final rules.…

Following up on our past posts (available here and here) on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates denominated in other currencies (collectively with LIBOR, “IBOR”), we discuss in this post the US Internal Revenue Service’s (“IRS”) proposed “Guidance on the Transition From Interbank Offered Rates to Other Reference Rates,” (“Proposed Guidance”) published for comment on October 9, 2019. The proposed regulations would provide much-needed…

Following up on our previous post of earlier this week, in this update on the transition away from LIBOR (London Interbank Offering Rate) as the reference rate of choice for financial transactions, we discuss one such alternative, the Secured Overnight Financing Rate (SOFR) issued by the Federal Reserve Bank of New York (”FRBNY”). On November 4, 2019, the FRBNY released a statement that the FRBNY, in cooperation with the Treasury Department’s Office of Financial Research,…

Since its creation by the British Bankers Association in the 1980s, the London Interbank Offering Rate (“LIBOR”) has been used as a reference rate for borrowing costs between banks. The LIBOR calculation today is coordinated by the International Continental Exchange Benchmark Administration, which receives information on a daily basis from a group of global money market banks on what they would charge each other for interbank loans. However, over the years, LIBOR has become the…

The US Internal Revenue Service (“IRS”) on October 9, 2019, issued long-anticipated guidance on cryptocurrency transactions and federal tax rules in Revenue Ruling 2019-24, which focuses on “hard forks” and “air drops.” In 2014, the IRS issued a revenue ruling on the capital gains taxation treatment of purchases and sales of cryptocurrency. However, other questions remained regarding the tax treatment of cryptocurrencies. Since then, the IRS has made efforts to reach out to taxpayers…

On September 25, 2019, the US House of Representatives passed the Secure and Fair Enforcement Banking Act of 2019 (or the SAFE Banking Act). The bill, H.R. 1595, which was first introduced by Congressman Ed Perlmutter on March 7, 2019, generally prohibits US banking regulators from penalizing banks for providing financial services to legitimate cannabis-related businesses and other cannabis-related service providers. The purpose behind the Act is to grant US cannabis companies operating and abiding…

On October 11, 2019, the Financial Crimes Enforcement Network (FinCEN), the US anti-money laundering (AML) agency, along with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) (collectively, the “Agencies”) issued a joint statement on digital assets activities (“Statement”), reminding the businesses under their jurisdictions that digital assets activities may be subject to AML obligations under the primary US AML statute known as the “Bank Secrecy Act”(BSA). The BSA authorizes the…