Client Alerts & Publications Archive

The Securities and Exchange Commission recently approved the Municipal Securities Rulemaking Board’s rule proposals that focus on fair dealing obligations of dealers in municipal securities.

The Court in the City of Detroit municipal bankruptcy proceeding has issued a decision granting the City’s motion to disband the Official Committee of Unsecured Creditors that had previously been appointed in the case by the U.S. Trustee.

Both House Ways and Means Committee Chairman Dave Camp and President Obama have recently released proposed changes to certain pension and retirement plans in the Internal Revenue Code.

The following is a summary of certain proposed changes to the Real Estate Investment Trust provisions of the Internal Revenue Code included in recent legislative proposals.

Legislative proposals by House Ways and Means Committee Chair Dave Camp would expand the scope of the unrelated business taxable income rules so that state and local pension funds would be subject to tax on certain investment income, including, in some instances, income from investment funds.

Recently proposed legislation would generally (i) require sale treatment when a C corporation elects to become a regulated investment company or transfers assets to a RIC, (ii) treat certain RIC shares as United States real property interests subject to tax by non-U.S. persons on disposition, and (iii) provide that RIC dividends received through foreign corporations would not be eligible for a dividends received deduction.

On March 10, the Division of Enforcement of the Securities and Exchange Commission announced its Municipalities Continuing Disclosure Cooperation Initiative.

Both Representative Camp, Republican Ways and Means Committee Chair, and President Obama have recently released far reaching proposed changes to the U.S. taxation of cross-border financial transactions.

Plaintiffs in a recent California Federal district court decision and in lawsuits in process against large health care systems in four other jurisdictions have argued that the ERISA exemption for “church plans” should be limited to plans of actual churches.

The Tax Reform Act of 2014 intends to simplify and consolidate the individual taxation scheme by consolidating, changing, or eliminating a variety of current tax benefits and the tax rates.

In March 2014, the U.S. Department of the Treasury released its general explanation of the tax proposals in the Obama administration’s proposed fiscal year 2015 budget.

Federal income tax reform has been the subject of numerous congressional discussions and committee hearings over the last year.

Legislative proposals by House Ways and Means Committee Chair Dave Camp would repeal the 4% LIHTC and change the way LIHTCs are allocated by the States.

In this issue:

• Financial Literacy
• OCC Guidance Regarding Secured Consumer Debt Discharged in Bankruptcy
• Mortgage Rules Update

On February 26, 2014, Representative David Camp, chair of the House Ways and Means Committee, released draft legislation referred to as the Tax Reform Act of 2014 that proposes to amend major portions of the Internal Revenue Code to provide for comprehensive tax reform.

On February 26, 2014, Representative David Camp, chair of the House Ways and Means Committee, released draft legislation referred to as the Tax Reform Act of 2014 that proposes to amend major portions of the Internal Revenue Code to provide for comprehensive tax reform.

If your firm is a registered investment adviser that has never been examined by the Securities and Exchange Commission, you might want to prepare to see SEC examiners in the near future.

Without reaching a consensual agreement with its various creditors, on Friday, February 21, 2014, the City of Detroit filed its Chapter 9 Plan for the Adjustment of Debts with the U.S. Bankruptcy Court for the Eastern District of Michigan.

This afternoon, Commissioner Michael S. Piwowar released a Statement supporting the SEC's decision to re-open the comment period on Regulation AB II, noting that market practices have continued to evolve since the financial crisis and the importance of obtaining the most recent data and information possible to inform and guide the SEC's decision-making process.  

Today, the SEC announced that it is re-opening the comment period on Regulation AB II to solicit further public comment on an approach to disseminate potentially sensitive asset-level data.

For the first time in its history the Municipal Securities Rulemaking Board has proposed a “best execution” rule for municipal securities transactions.

The Banking Law Journal published a Chapman-authored article. The article outlines the reasons website disability access should be addressed by banks—not only as good business practice, but to mitigate litigation risk, reputational damage, regulatory enforcement action and the potential new Department of Justice regulations expanding the coverage of the Americans with Disabilities Act to websites.

In this issue:

• Making a Virtual Bank ADA Compliant
• Incident Response Plan for Privacy and Data Security Breaches
• Telephone Consumer Protection Act Update
• FinCEN Issues New Guidance on Virtual Currencies

The Securities and Exchange Commission recently published a notice seeking comments on the Municipal Securities Rulemaking Board’s rule proposal on fair pricing obligations of dealers in municipal securities.

The staff of the Securities and Exchange Commission recently issued a no-action letter providing that brokers that facilitate certain merger and acquisition transactions of privately-held companies could receive transaction-based compensation without being required to register with the SEC as a broker-dealer.

The right of a secured creditor to “credit bid” (i.e., to bid the amount of debt owed rather than cash) in a debtor’s sale of assets, once thought to be rock solid, is again under attack.

On February 12, 2014, 17 members of the House of Representatives Committee on Financial Services, including the chair, Maxine Waters, wrote a letter to the federal regulators implementing the Volcker Rule asking that interpretive guidance be issued with respect to the treatment of certain CLO debt securities.

The SEC has announced that it is removing Regulation AB II off the agenda for its February 5th open meeting.  

Equity sponsors holding a controlling interest in a distressed portfolio company have sometimes purchased substantial amounts of the company’s debt in order to gain advantage or profit.

In this issue:

• Mortgage Rules Update
• FFIEC Issues Final Guidance On Social Media

The SEC has announced that it is holding an open meeting at 3:00 pm on Wednesday, February 5th to adopt Regulation AB II.

The January 17th proposed guidelines from the Office of the Comptroller of the Currency seeks to establish minimum standards for financial institutions to design and implement a Risk Governance Framework and standards for the oversight and participation by an institution’s board of directors and internal audit department.

Under current bankruptcy law, units of local government cannot voluntarily petition for municipal bankruptcy under Chapter 9 without express and specific authority from the state. 

With fixed income markets already in decline in May 2013, speculation regarding Federal Reserve action reached a pinnacle in the last half of June, sparking a bond market selloff of historic proportions.

On January 9, 2014, the Municipal Securities Rulemaking Board proposed Rule G-42, defining the fiduciary duties of municipal advisors to municipal entity clients and the duties and responsibilities owed to all municipal advisory clients.

On January 10, 2014, the Staff of the Office of Municipal Securities of the Securities and Exchange Commission released additional guidance on the SEC’s registration rules for municipal advisors in the form of responses to Frequently Asked Questions.

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.

On January 14, 2014, five federal agencies approved an interim final rule to permit banks to retain certain collateralized debt obligations backed primarily by trust preferred securities (TruPS CDOs) from the investment prohibitions of the Volcker Rule.  

The IRS recently published final regulations concerning the new Medicare tax, imposed beginning with tax year 2013 at a rate of 3.8 percent on net investment income.

Today the Securities and Exchange Commission announced that it is delaying until July 1, 2014 the compliance date of the recent final rule requiring registration of municipal advisors under the Dodd-Frank Act.

On January 12, 2014, the Basel Committee on Banking Supervision (BCBS) issued a consultative document proposing revisions to the Net Stable Funding Ratio (NSFR) under Basel III.

On January 12, 2014, the Basel Committee on Banking Supervision published guidance to assist national banking supervisions in implementing the liquidity ratio requirement (LCR) under Basel III.

On January 12, 2014, the Basel Committee on Banking Supervision issued final requirements for banks' disclosures relating to the liquidity coverage ratio.

The Securities and Exchange Commission has released interpretive guidance on the final rules for the registration of municipal advisors.

The Municipal Securities Rulemaking Board has released its proposed rule on the duties of municipal advisors. 

In accordance with provisions of the Jumpstart Our Business Startups Act, enacted in 2012, the staff of the Securities and Exchange Commission recently published a report on its review of disclosure requirements under SEC Regulation S-K.

Industry participants are concerned that the Volcker Rule's prohibition of banks acquiring or retaining "ownership interests" of CLO covered funds will prohibit banks from owning rated debt securities that include the right to replace the collateral manager for cause and appoint a replacement.  

A Chapman Insights article was posted by the Harvard Law School Forum on Corporate Governance and Financial Regulation. 

Technology continues to take an expanded role in banking and the way consumers and businesses manage their money and lives.