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State Street’s 2021 Proxy Voting Agenda

By Betty Moy Huber & Paula H. Simpkins

January 15, 2021

State Street Global Advisors (SSGA) released its eagerly awaited 2021 proxy voting agenda earlier this week and, unsurprisingly, climate change risk and the lack of racial and ethnic diversity are among the investor’s top priorities. In the annual letter from the President and CEO Cyrus Taraporevala (CEO’s Letter), companies are urged to increase their transparency around racial and ethnic diversity. “The preponderance of evidence demonstrates clearly and unequivocally that racial and ethnic inequity is a…

FinReg

SEC Takes No-Action Position on Custody of Digital Asset Securities by Special Purpose Broker-Dealers

By Zachary J. Zweihorn, Joseph A. Hall, Jai R. Massari, Mark A. Sater & Alba Baze

January 14, 2021

A recent SEC conditional no-action position (the “No-Action Statement”) has further opened the regulatory door to trading of digital asset securities (“DAS”), by allowing certain limited purpose DAS-only broker-dealers to maintain custody of these securities on behalf of customers. Efforts to meet the SEC staff’s prior guidance that broker-dealers generally could not custody DAS for customers triggered somewhat cumbersome workaround attempts. While not a complete solution, the No-Action Statement offers certain broker-dealers another alternative that…

FinReg

The Road Ahead for Financial Regulatory Reform in a Time of Democrats in Control

By John Banes, Luigi L. De Ghenghi, Randall D. Guynn, Jai R. Massari, Daniel Stipano, Gabriel D. Rosenberg, Margaret E. Tahyar, Zachary J. Zweihorn, Kyoko Takahashi Lin & Veronica M. Wissel

January 13, 2021

Today, we released our deck “The Road Ahead for Financial Regulatory Reform in a Time of Democrats in Control.” This deck describes our view of the road ahead for financial regulatory reform under a Biden Presidency, and updates the deck we published shortly after the 2020 election to reflect the Democratic majority in both houses of Congress. The deck is available here. Associates Tyler Senackerib and Jessica Walker and Legal Assistants Eliza Hering,…

FinReg

The Anti-Money Laundering Act of 2020 – Key Takeaways

By Greg D. Andres, Robert A. Cohen, Luigi L. De Ghenghi, Tatiana R. Martins, Jai R. Massari, Paul J. Nathanson, John B. Reynolds, Will Schisa, Daniel Stipano & Margaret E. Tahyar

January 4, 2021

The Anti-Money Laundering Act of 2020 implements the most extensive revisions to anti-money laundering law since the USA PATRIOT Act of 2001. The changes will affect both traditional financial institutions and FinTechs, including a new beneficial ownership provision that requires shell companies to submit ownership information to a non-public FinCEN registry, new incentives and protections for anti-money laundering whistleblowers and a number of other changes that will affect AML programs and procedures. Please see our …

FinReg

OFAC Belatedly Releases FAQs Regarding Ban on Investments by U.S. Persons in Companies Linked to the Chinese Military, Leaves Key Questions Unanswered

By John B. Reynolds, Martin Rogers, Joshua Friedman, Will Schisa, Jane Faulkner & Yuan Zheng

December 30, 2020

On December 28, 2020 the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) released Frequently Asked Questions (FAQs) relating to Executive Order 13959, “Addressing the Threat from the Securities Investments that Finance Communist Chinese Military Companies,” issued on November 12, 2020 (E.O. 13959 or the Order), which bans, beginning on January 11, 2021, certain transactions by any United States person (U.S. person) in publicly traded securities of specified entities determined to be…

Briefing: Governance

ISS Releases Its Compensation-Related Policy FAQs for 2021

By Kyoko Takahashi Lin, Betty Moy Huber, Alicyn L. Gilbert & Paula H. Simpkins

December 23, 2020

On December 21, 2020, ISS released its updated compensation-related FAQs for 2021. For U.S. companies, this set of guidance consists of ISS’ Compensation Policies FAQ, Equity Compensation Plans FAQ, Pay-for-Performance Mechanics and Peer Group FAQ. As we previously discussed, ISS released its 2021 U.S. Proxy Voting Benchmark Policy Recommendations in November. The updated policies and FAQs are effective for shareholder meetings occurring on or after February 1, 2021. ISS’ FAQs are…

FinReg

FDIC Issues Final Rule on Supervision of ILC Holding Companies

By John Banes, Luigi L. De Ghenghi, Randall D. Guynn, Margaret E. Tahyar, Daniel E. Newman, Dana E. Seesel & Ledina Gocaj

December 23, 2020

The FDIC has issued a final rule to formalize longstanding expectations it has had for the parent company of a new industrial loan company (ILC). The FDIC adopted the proposed rule issued in March 2020 with few changes. The final rule requires a new ILC to enter into a written agreement with the ILC parent and the FDIC, and requires prior FDIC approval for certain changes at the ILC level. Fintechs and other nontraditional firms seeking…

FinReg

Banking Agencies Propose Cyber Reporting Rule: Implications for Cybersecurity Compliance

By Greg D. Andres, Robert A. Cohen, Gabriel D. Rosenberg, Margaret E. Tahyar, Matthew J. Bacal, Daniel F. Forester, Matthew Kelly & Will Schildknecht

December 22, 2020

On December 15, 2020, the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corporation issued a notice of proposed rulemaking that would require substantially faster notification of cybersecurity incidents involving banking organizations, expand the list of triggering events, and impose first-of-its kind notification requirements for bank service providers. Banking organizations and their service providers should consider reviewing their incident response plans for compliance with the proposed rule and should…

Briefing: Governance

DOL Finalizes Proxy Voting and Shareholder Rights Rule

By Betty Moy Huber, Charles Shi & Paula H. Simpkins

December 18, 2020

The U.S. Department of Labor (“DOL”) issued a final rule on December 11, 2020 to clarify how and when the ERISA fiduciary duties apply to the exercise of shareholder rights, including proxy voting, proxy voting guidelines and the use of proxy advisory firms. The final rule requires fiduciaries to put the economic interest of plan participants and beneficiaries first and to ensure that voting decisions advance these interests. Accordingly, the final rule will make it…

Briefing: Governance

SEC Proposes Amendments to Modernize Rule 701 and Form S-8 and Temporary Rules to Allow for “Platform Worker” Participation

By Kyoko Takahashi Lin & Alicyn L. Gilbert

December 8, 2020

On November 24, 2020, the SEC released proposed amendments and proposed temporary rules relating to the federal securities laws that govern the issuance of equity securities to service providers pursuant to compensatory arrangements. Each proposal will be subject to a 60-day public comment period following publication in the Federal Register. First, the SEC proposed amendments to modernize the framework for securities offerings and sales to workers under Rule 701 of the Securities Act of 1933…

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State Street’s 2021 Proxy Voting Agenda

SEC Takes No-Action Position on Custody of Digital Asset Securities by Special Purpose Broker-Dealers

The Road Ahead for Financial Regulatory Reform in a Time of Democrats in Control

The Anti-Money Laundering Act of 2020 – Key Takeaways

OFAC Belatedly Releases FAQs Regarding Ban on Investments by U.S. Persons in Companies Linked to the Chinese Military, Leaves Key Questions Unanswered

ISS Releases Its Compensation-Related Policy FAQs for 2021

FDIC Issues Final Rule on Supervision of ILC Holding Companies

Banking Agencies Propose Cyber Reporting Rule: Implications for Cybersecurity Compliance

DOL Finalizes Proxy Voting and Shareholder Rights Rule

SEC Proposes Amendments to Modernize Rule 701 and Form S-8 and Temporary Rules to Allow for “Platform Worker” Participation

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