On May 3, 2019, the International Accounting Standards Board (“IASB”) proposed amendments (“Exposure Draft”) to two accounting standards in response to concerns raised by the transition away from the London Interbank Offered Rate (“LIBOR”). Specifically, the Exposure Draft addresses International Financial Reporting Standard (“IFRS”) 9 Financial Instruments and International Accounting Standard (“IAS”) 39 Financial Instruments: Recognition and Measurement. The IASB is accepting comments on the Exposure Draft until June 17, 2019 and plans to issue…

In April 2019, the International Swaps and Derivatives Association, Inc. (“ISDA”) published the results of its latest survey of the margin amounts collected by market participants. The publication identifies key themes derived from a 2018 survey of firms that are subject to the Prudential Regulator or U.S. Commodity & Futures Trading Commission (“CFTC”) initial margin (“IM”) requirements. In this post, we summarize themes presented in the survey summary in the context of the margin requirements.…

The International Swaps and Derivatives Association (ISDA) has published the first in a series of guidelines for what it colloquially refers to as “smart derivatives contracts” (the Guidelines).* A smart derivatives contract is a derivative that incorporates software code to automate aspects of the derivative transaction and operates on a distributed ledger, such as a blockchain. This series of papers is intended to “provide high-level guidance on the legal documentation and framework that currently governs…

FINRA has made it official.  Earlier today, FINRA published Regulatory Notice 19-05, delaying TBA margin requirements until March 25, 2020.  FINRA explained: FINRA is issuing this Notice to announce that FINRA is extending by an additional year, until March 25, 2020, the effective date of the margin requirements that otherwise would have become effective on March 25, 2019. As we explained in a January 29th post, the purpose of this delay is to…

Both the SEC and FINRA recently released their 2019 Examination priorities, (available here and here) highlighting primary areas of focus for 2019.  While there are no surprises, there are some items that have a unique twist that warrant attention.  In this post we provide an overview of the regulators focus on Reg SHO and short selling. Both regulators will continue to focus on aspects of Reg SHO compliance.  FINRA will be focused on the…

On January 29th, FINRA released the following statement: Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend, to March 25, 2020, the implementation date of the amendments to FINRA Rule 4210 (Margin Requirements) pursuant to SR-FINRA-2015-036, other than the amendments pursuant to SR-FINRA-2015-036 that were implemented on December 15, 2016.  FINRA has indicated that it will file the proposed rule…

On December 21, 2018, the U.S. Securities and Exchange Commission (“SEC”) announced enforcement actions against two robo-advisers, Wealthfront Advisors LLC (“Wealthfront”) and Hedgeable Inc. (“Hedgeable”), for making false statements about investment products and publishing misleading advertising. “Robo-advisers” are investment advisers that provide automated, software-based portfolio management services. In a press release related to these actions, the Chief of the SEC Enforcement Division’s Asset Management Unit stated that “[t]echnology is rapidly changing the way investment advisers…