Client Alerts & Publications Archive

To kick off the Memorial Day weekend, the Federal Reserve Board announced a proposal to include certain state and municipal general obligation bonds in the calculation of High Quality Liquid Assets, the numerator of the new Liquidity Coverage Ratio requirement to which large banks are subject. 

On December 8, 2014, the American Bankruptcy Institute Commission to Study the Reform of Chapter 11 released its Final Report and Recommendations for amendment to the current Bankruptcy Code. The proposals are significant, and on the whole, largely harmful to the rights of secured creditors.

The Financial Industry Regulatory Authority recently released a Regulatory Notice in which it proposed changes to certain aspects of the FINRA rules governing member firms’ communications with the public. This Client Alert is a summary of the proposed changes.

This Client Alert summarizes the Securities and Exchange Commission proposed changes to certain aspects of the reporting, disclosure, and recordkeeping obligations of registered investment advisers. 

This Client Alert summarizes the Securities and Exchange Commission proposed changes to certain aspects of the disclosure and reporting obligations of registered investment companies. 

The Financial Industry Regulatory Authority recently issued an interpretive letter that allows distributors of mutual funds to include related performance information in communications with institutional investors, including registered broker-dealers and investment advisers.

On May 20, 2015, the Securities and Exchange Commission proposed changes to certain aspects of reporting and disclosure obligations of registered investment advisers and investment companies. 

On May 18, 2015, the Board of Governors of the Federal Reserve System issued guidance indicating when a banking organization that determines its risk-based capital using the advanced approaches may apply the simplified supervisory approach rather than the supervisory formula approach when determining the risk weight of a securitization exposure for risk-based capital purposes.

The United States District Court for the Southern District of New York recently affirmed the Bankruptcy Court’s decision in In MPM Silicones, LLC, establishing Judge Drain’s “prime plus” formula as the appropriate interest rate required in connection with new notes issued to secured creditors under a cramdown plan of reorganization in the Southern District of New York.

This is the fifth installment of Chapman and Cutler LLP’s discussion of the proposals contained in the Final Report and Recommendations of the American Bankruptcy Institute’s Commission to Study the Reform of Chapter 11.

In this edition:

• U.S. Supreme Court Will Not Hear CashCall Case – Uncertainty for Marketplace Lenders?
• FinCEN Current Priorities
• Guidance on Youth Savings Programs
• Overdraft Update – CFPB Enforcement Action

In order to avoid future intercreditor disputes, investors can learn from past mistakes and draft or revise their intercreditor agreements accordingly. In this Client Alert, we attempt to highlight a number of specific considerations that may improve intercreditor agreements, to better achieve their intended purpose of delineating the respective priorities and rights of senior and junior secured creditors while avoiding intercreditor conflict.

On May 4, 2015, the U.S. Commodity Futures Trading Commission published a letter providing clarification of an issue that has been of acute interest to the auto and equipment securitization industry. Section 2(h)(7)(A) of the Commodity Exchange Act permits certain qualifying entities to elect not to clear a swap that is otherwise subject to a Clearing Determination.

The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance for registered investment advisers and registered investment companies related to cybersecurity preparedness in their business practices. 

The Securities and Exchange Commission staff recently announced an initiative to conduct examinations of registered investment company complexes that have not previously been examined. 

On March 31, 2015, the U.S. Commodity Futures Trading Commission issued no-action relief stating that, with respect to certain legacy special purpose vehicle swaps, swap dealers would be exempt from complying with certain CFTC regulations. These Specified Regulations relate to external business conduct standards and swap trading documentation that swap dealers would otherwise be required to adhere to.

In this issue: 

• CFPB Arbitration Study: First Step to Restricting their Use?
• 7th Circuit Requires Servicers to Credit Payments on the Day Authorized
• Target Data Breach Settlement

On March 16, 2015, the United States Environmental Protection Agency announced its new voluntary “Safer Choice” labels, which are intended to inform consumers about chemicals present in household and industrial products.

This Chapman and Cutler white paper provides a summary of, and practical guide to, the principal requirements of federal securities laws relating to municipal bonds. Much of the information discussed in this white paper applies to both higher education bonds and other municipal securities, while certain sections focus on securities laws as applied to the high education sector, in particular.

Out-of-court debt restructurings may face greater hurdles to success in light of two recent federal court decisions out of New York broadly expanding dissenting bondholders’ rights under the Trust Indenture Act.

The Corporate Board published an article written by Chapman attorneys.

Insights: The Corporate & Securities Law Advisor published an article based off a Chapman Insights article.

As indicated in our January 20, 2015 Client Alert, the Obama Administration previously announced in general terms its Fiscal Year 2016 budget plans with respect to the maintenance and improvement of US public infrastructure.

The staff of the Securities and Exchange Commission recently issued guidance to remind affiliates of registered investment companies that the receipt of gifts or entertainment may violate Section 17(e)(1) of the Investment Company Act of 1940.

The Harvard Law School Forum on Corporate Governance and Financial Regulation posted an article based on a recent Chapman Insights. 

In order to maintain the global private placement market as an attractive market for both issuers and investors, the American College of Investment Counsel undertook to update its Model Form Note Purchase Agreement last year and released its Transaction Process Management Committee Updated Model X Form No. 2, draft dated April 15, 2014.

Pratt's Journal of Bankruptcy Law recently published an article based on a recent Chapman Client Alert.

On February 18, 2015, the European Commission issued two publications which begin a three-month consultation with member states, capital market participants, and other stakeholders towards the development of an action plan for a fully functioning European Capital Markets Union by 2019. 

The Banking Law Journal published an article based on a recent Chapman Client Alert.

On February 6, 2015, the U.S. District Court for the District of Puerto Rico issued a decision holding Puerto Rico’s Public Corporations Debt Enforcement and Recovery Act unconstitutional, noting that it was “not a close case.”

While proxy access did not garner significant attention over the past two proxy seasons, it has struck 2015 with a vengeance and is one of the most notable early developments of this proxy season.

On January 13, 2015, the IRS published Notice 2015-4 to specify that the performance and quality standards applicable to small wind energy property intended to qualify for the investment tax credit are those established by the American Wind Energy Association or the International Electrotechnical Commission.

As discussed in our previous client alert on this subject, litigation over whether $1.5 billion in prepetition loans to GM were secured or unsecured has been pending before the Second Circuit Court of Appeals. The Second Circuit recently issued a decision upholding the termination. 

As part of its charge to promote a fair and efficient municipal securities market, the Municipal Securities Rulemaking Board issued regulatory notice 2015-03 on January 29, 2015, calling for timely disclosure of bank loans extended to municipal borrowers, whether in the form of the direct purchase of bonds or notes, a loan agreement, or any other type of financing with the municipal borrower.

This is the fourth installment of Chapman’s discussion of the proposals contained in the American Bankruptcy Institute’s Final Report and Recommendations to amend the Bankruptcy Code. 

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued its 2015 Regulatory and Examinations Priorities Letter.

The Financial Industry Regulatory Authority, Inc. recently issued its Regulatory and Examinations Priorities Letter. In this alert are brief summaries of some of the more significant issues FINRA’s letter raises.

One of the well-known benefits of bankruptcy is that assets can be sold free and clear of claims and interest in the property. But unknown future claims have presented difficulties for purchasers of assets in bankruptcy sales and courts have struggled to devise a clear rule for dealing with such claims.

The Securities and Exchange Commission recently issued a no-action letter which grants relief to broker-dealers, allowing them to rely on investment advisers to perform some or all of their Customer Identification Program obligations under federal anti-money laundering legislation.

On January 21, 2015, the FDIC proposed a rule that would clarify the requirements of its Securitization Safe Harbor Rule regarding retention of an economic interest in the credit risk of securitized financial assets upon and following the effective date of the credit risk retention regulations adopted under Section 15G of the Securities Exchange Act.  

On January 16, 2015, the Obama Administration announced in general terms its plans with respect to the maintenance and improvement of public infrastructure, including roads, bridges, ports, water purification plants, and reservoirs, all of which are deemed critical services by the Administration for consumers and businesses alike.

As discussed in our first two installments, the American Bankruptcy Institute released its Final Report and Recommendations containing proposals to modify the Bankruptcy Code, many of which will have significant and negative implications for secured creditors. 

In this edition:

• Student Loan Servicing—Unfair or Deceptive Acts or Practices
• OCC Revises Its Truth in Lending Handbook
• FFIEC Releases Revised BSA/AML Examination Manual
• NACHA Same-Day ACH Processing Proposal

The beginning of each year provides an opportunity for investment advisers to review annual compliance and regulatory matters, including issues related to private investment funds and commodity pools.

As discussed in our first installment, the American Bankruptcy Institute released its Final Report and Recommendations containing proposals to modify the Bankruptcy Code, many of which will have significant and negative implications for secured creditors.

Pratt's Journal of Bankruptcy Law published an article based on a recent Chapman Sidebar.

Director tenure, board entrenchment, and board refreshment are corporate governance buzzwords that increasingly are becoming hot-button issues for institutional investors, proxy advisory firms, shareholder activists, and other governance advocates.

The final credit risk retention rule was published in the Federal Register today, December 24, 2014, setting the compliance dates for the final rule.

Can a lender use evidence outside the four corners of a security agreement to prove that it has a valid security interest against the bankruptcy trustee?