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Davis Polk Insights on Financial Regulation

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Earlier this month, SEC Chairman Jay Clayton and Division of Trading and Markets Director Brett Redfearn engaged in a public dialogue on equity market structure issues.  In addition to reviewing three equity market structure initiatives adopted by the SEC in 2018 (the transaction fee pilot, enhanced order handling disclosure requirements and new transparency requirements for alternative trading systems that trade NMS stocks), Clayton and Redfearn highlighted three areas for potential further rulemaking:…
On April 1, 2019, new cybersecurity requirements outlined in the NFA’s Interpretive Notice to NFA Compliance Rules 2-9, 2-36 and 2-49 will come into effect.  These new requirements apply to NFA Members, including registered futures commission merchants, commodity trading advisors, commodity pool operators, introducing brokers, retail foreign exchange dealers, and swap dealers.  Perhaps the most significant new obligation is the imposition of onerous breach notification requirements. The full blog post is available at our Cyber…
U.S. federal banking regulators plan to revive efforts to regulate financial institution incentive compensation, as required under Section 956 of the Dodd–Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act).  The Wall Street Journal reports that the current effort is in its “early stages” and is being led by “top officials” of at least the Federal Reserve, the FDIC and the OCC.  The article notes, “spokesmen for the Fed and OCC said their…
On March 4, 2019, the U.S. State Department announced that, for the first time, it would permit actions under Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996, Pub. L. 104-114 (the “Libertad Act”), which authorizes U.S. nationals that own claims to property confiscated by the Cuban government to sue for damages any person who traffics in such property.  The State Department’s determination, which is effective March 19, 2019, is…
As the new Congress gets underway, we have updated our brief deck summarizing the leadership and staffing changes among federal financial regulators, including announced nominations, confirmations, resignations and expiring terms.  The first slide summarizes the state of play for the agencies’ principals; the later slides provide a deeper look on an agency-by-agency basis, including select senior staff.  We intend to continue to update this resource from time to time. View as a PDF
Financial services regulatory reform continues to evolve in 2019.  As we observe the changing landscape, here is the New Congress Edition of our reference tool, which provides context and summarizes current developments across a range of key regulatory areas, agencies and actors.  We will continue to track these issues and will provide another update in the next quarter. The Davis Polk Financial Services Regulatory Reform Tool is available here.…
Cannabis legislation for banking is now getting more serious attention, as it should. On Wednesday, February 13, the Consumer Protection and Financial Institutions Subcommittee of the House Committee on Financial Services will convene a hearing entitled, “Challenges and Solutions:  Access to Banking Services for Cannabis-Related Businesses.” The hearing follows Chairwoman Maxine Waters’ remarks in November that “it’s inevitable we are going to have to talk about” banking the cannabis sector. Its timing is almost five…
The Federal Reserve, FDIC and OCC (the Banking Agencies) recently published a proposal to increase the thresholds associated with the “major assets” prohibition governing management official interlocks contained in the Depository Institutions Management Interlocks Act (DIMIA)[1] and implemented by Regulation L.  DIMIA permits the Banking Agencies to raise the statutory thresholds from time to time to take into account inflation or market changes.[2]  The thresholds have not been raised since 1996.[3] The…
On January 28, 2019, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) sanctioned Petroleos de Venezuela S.A. (“PdVSA”), Venezuela’s state-owned oil company, pursuant to Executive Order (“E.O.”) 13850 for operating in the oil sector of the Venezuelan economy, following a determination by the Secretary of the Treasury pursuant to E.O. 13850 that persons operating in Venezuela’s oil sector may be subject to sanctions.  As a result of the designation, all property and interests…
The Federal Reserve, FDIC and OCC (the Agencies) have each released proposed amendments to their respective stress testing rules for national banks, savings associations, state member banks and state non-member banks (collectively, IDIs) that would implement Section 401 of the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (the EGRRCPA) as it applies to supervisory and company-run stress testing requirements (the Proposals).[1]  The Proposals generally address company-run stress testing requirements for…