Dodd-Frank Updates: A Legal Roundup – August 2011

For your reference, an August reading list of recent Dodd-Frank Act news, updates, and analysis published by law firms on JD Supra:

…On Investment Advisers

Summary and Analysis of Dodd-Frank Rules for Investment Advisers Registration Requirements, Exemptions, Family Offices, Performance Fee Eligibility (Katten Muchin Rosenman LLP):

“…the Securities and Exchange Commission on June 22 adopted rules defining three new exemptions from investment adviser registration (the Exemptive Rules) mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank). Dodd-Frank raised the threshold of assets under management required for SEC registration to $100 million, and the SEC also has adopted rules (the Implementing Rules) to implement that and other changes related to the registration process, including amendments to Form ADV and the transition to state registration for certain advisers.” Read more»

SEC Finalizes Dodd-Frank Rules Affecting Non-U.S. Investment Advisers (Reed Smith):

“Currently, non-U.S. advisers with fewer than 15 U.S. clients are generally exempt from registration and recordkeeping requirements under the Act. Advisers to private funds can generally count each fund as a single client; thus, most private equity and hedge fund managers are able to rely on this exemption. Dodd-Frank repealed this so-called ‘private adviser exemption’ and replaced it with, among other things, (a) a ‘foreign private adviser exemption,’ and (b) an exemption for advisers to private funds with aggregate assets under management of less than $150 million (the ‘private fund adviser exemption’).” Read more»

SEC Adopts Final Rules Regarding Investment Advisers Act Registration and Exemptions (Miller & Martin PLLC):

“The Final Rules provide an extension of the registration deadline for private fund advisers that are required to register as a result of the enactment of Dodd-Frank until March 30, 2012. The extension applies to private fund advisers that were exempt from registration with the SEC under the ‘private adviser’ exemption under Section 203(b) of the Advisers Act, which, until repealed by Dodd-Frank, provided an exemption to advisers who had fewer than fifteen clients and who did not hold themselves out to the public as investment advisers.” Read more»

…On Credit Ratings

Credit Ratings and Credit Risk: Frequently Asked Questions in Structured Thoughts – Volume 2, Issue 12 – August 25, 2011 (Morrison & Foerster LLP):

“Over the past two years, there has been a considerable amount of regulatory activity related to credit ratings and rating agencies. Each of these developments has impacted in some way the structured products industry. However, the frequency of these developments has made it difficult for many people to track them.” Read more»

SEC Adopts New Rules to Replace Use of Credit Ratings in Determining Eligibility for Forms S-3 and F-3 (Dechert LLP):

“Effective September 2, 2011, the Securities and Exchange Commission (the ‘SEC’) will remove credit ratings as eligibility criteria for registration statements on Forms S-3 and F-3 and replace them with new eligibility requirements, as required by Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (‘Dodd-Frank’). The new rules include a grandfather provision for issuers that would have qualified to use Forms S-3 and F-3 under the old rules until September 2, 2014.” Read more»

…On Executive Compensation

SEC Delays Planned Adoption Date for Several Executive Compensation Provisions Under the Dodd-Frank Act (Morgan Lewis):

“On July 29, the Securities and Exchange Commission (SEC) extended its timeline for issuing rules with respect to various Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) provisions applicable to executive compensation. …  It is now unclear which requirements, if any, will become effective in time for the 2012 proxy season.” Read more»

Dodd-Frank Act Means No Summer Vacation for Compensation Committees (Manatt, Phelps & Phillips, LLP):

“While the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) is largely directed at reforms within the financial services industry, Congress did not miss its opportunity to adopt regulations on corporate governance and compensation practices applicable to all public reporting companies.” Read more»

Additional Legal Analysis

SIFI Resolutions and Living Wills: The Financial Stability Board Proposal (and some U.S. and UK observations) (Morrison & Foerster LLP):

“On July 19, 2011, as part of a broad program to enhance the regulation of systemically important financial institutions (‘SIFIs’), the Financial Stability Board (‘FSB’) published a consultative document, “Effective Resolution of Systemically Important Financial Institutions” (the ‘FSB Paper’). The paper proposes several additions to and improvements in domestic and cross border resolution regimes, including the preparation of Recovery and Resolution Plans (‘RRPs’).” Read more»

Dodd-Frank Wall Street Reform Act: Changes And Challenges For The Municipal Market (McNees Wallace & Nurick LLC): 

“Municipal securities have historically been subject to less supervision than other publicly traded securities. The SEC requires publicly traded companies to make large annual disclosures that have never been required for municipal securities. The Act is an effort to reform the municipal securities market, along with the rest of the financial system.” Read more»

Regulators Consider Whether Stable Value Contracts Should Be Subject to Regulation as Swaps under the Dodd-Frank Act and Solicit Public Comment (Sutherland Asbill & Brennan LLP):

“The definition of swap contained in Section 1a(47) of the Commodity Exchange Act (the CEA), as amended by the Dodd-Frank Act, and the definition of security-based swap contained in Section 3(a)(68) of the Securities Exchange Act (the Exchange Act), as amended by the Dodd-Frank Act, are very broad and could encompass a number of commercial instruments, including insurance and annuity products, that historically have not been considered swaps.” Read more»

Recent Ruling Provides Roadmap For Potential Dodd-Frank Challenges (Womble Carlyle Sandridge & Rice, PLLC):

“Last month’s ruling by the U.S. Court of Appeals for the District of Columbia Circuit (the ‘Court’) in the closely watched case of Business Roundtable v. SEC not only overturned the landmark Securities and Exchange Commission (the ‘SEC’) shareholder proxy access rule, but also created a potential roadmap for businesses and industry groups seeking to challenge many other rules to be issued by the SEC and other federal regulators under the Dodd-Frank Wall Street Reform and Consumer Protection Act (‘Dodd-Frank’).” Read more»


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