Client Alerts & Publications Archive

In response to the COVID-19 pandemic, federal and state courts throughout the country are issuing general orders providing for important changes to procedures for pending and newly scheduled court hearings.

The SEC re‑proposed Rule 18f-4, a new exemptive rule designed to provide a more comprehensive approach to the regulation of funds’ use of derivatives and certain other transactions.

On February 18, the SEC issued an order approving a proposed MSRB rule change updating the MSRB’s Electronic Municipal Market Access system website.

On February 7, the SEC Office of Municipal Securities published Staff Legal Bulletin No. 21 that addresses the application of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934.

On January 13, 2020, the Delaware Supreme Court reversed, in part, an appeal from the Delaware Court of Chancery in BlackRock Credit Allocation Income Trust v. Saba Capital Master Fund, Ltd.

On February 10, the SEC’s Fixed Income Market Structure Advisory Committee approved a series of recommendations designed to improve the timeliness of disclosure in the municipal securities market.

This Client Alert covers the new rules that apply to decanting. It is the fifth installment in a six-part series on the new Illinois Trust Code.

The IRS has released a new Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds, along with new instructions. Form 8038-CP is used by issuers to claim payments from the federal government representing all or a portion of interest payable on direct pay bonds

The SEC's Office of Compliance Inspections and Examinations has released its 2020 Examination Priorities. This Client Alert includes a discussion of the exam priorities.

FINRA recently issued its 2020 Risk Monitoring and Examination Priorities Letter. The letter highlights the areas of focus for FINRA’s risk monitoring, surveillance and examination programs for 2020 and contain numerous links to Regulatory Notices, FINRA Reports and other resources to aid broker-dealers in complying with the priority areas.

On September 17, the SEC announced proposed rules to update the statistical disclosures that bank and savings and loan registrants provide to investors and eliminate disclosures that overlap with other SEC rules, U.S. GAAP or IFRS.

Late in 2019, as part of a spending package, President Trump signed into law the Setting Every Community Up for Retirement Enhancement Act of 2019 or the SECURE Act. The legislation provides changes to defined contribution plans (such as 401(k) plans) and defined benefit pension plans.

Late in 2019, Congress passed the Setting Every Community Up for Retirement Enhancement or the SECURE Act. With few exceptions, the provisions in the Act are effective for retirement plans, IRAs, contributions and distributions on or after January 1, 2020.

The California Consumer Privacy Act of 2018 went into effect on January 1, 2020 and imposes extensive disclosure and record-keeping requirements on businesses that handle personal information.

This Client Alert covers the new rules that apply to beneficiary representation. It is the fourth installment in a six-part series on the new Illinois Trust Code.

On November 22, in a fact-specific ruling, the U.S. Court of Appeals for the First Circuit held that two separate, but related Sun Capital Partners Inc. private equity investment funds were not liable for the multiemployer plan withdrawal liability of a bankrupt portfolio company that the two funds co-owned.

On November 25, the SEC re-proposed Rule 18f-4 under the Investment Company Act of 1940 as amended. Rule 18f-4 is intended to be a new exemptive rule that is designed to enhance the regulation of the use of derivatives by registered investment companies, including mutual funds, ETFs, closed-end funds, and BDCs notwithstanding the restrictions under the 1940 Act.

This article in Business Credit magazine discusses best practices that unsecured creditors consider in determining early-on whether or not a customer is in financial distress, assessing the circumstances, and taking appropriate action. 

On November 4, the SEC announced proposed amendments to Rules 206(4)-1 and 206(4)-3 under the Investment Advisers Act of 1940 to address investment adviser advertisements and payments to solicitors, respectively. 

On September 26, the SEC adopted final Rule 6c-11 under the Investment Company Act of 1940, and certain form amendments that standardize the regulatory regime governing exchange-traded funds.

Fund sponsors are increasingly considering two similar types of registered closed-end investment companies known as “interval funds” and “tender offer funds” as an attractive alternative to open-end mutual funds, ETFs and traditional closed-end funds.

This Alert covers the new rules that apply to the modification or termination of irrevocable trusts. It is the third installment in a six-part series on the new Illinois Trust Code.

On September 26, the SEC adopted Rule 6c-11 under the Investment Company Act of 1940 and amendments to Form N-1A and Form N-8B-2 that overhaul the patchwork regulatory framework that currently governs the $3.32 trillion ETF industry. The adopted rule and form amendments are largely similar, but not identical, to the versions that were proposed in June 2018.

In a case of first impression, the Seventh Circuit recently held that a UCC financing statement that incorporates a description of collateral by reference to an unattached security agreement sufficiently “indicates” the collateral, such that a separate and additional description of the collateral is not required to properly perfect a lender’s security interest.

This Alert covers the newly created powers granted to a trustee under the ITC, a well as the previously existing, but now codified, powers. This Alert is the second installment in a six-part series on the new Illinois Trust Code, a version of the Uniform Trust Code.

In a decision that upends the expectations of the municipal bond market, a three-judge panel of the U.S. Court of Appeals for the First Circuit has ruled that the “special revenue” provisions of the U.S. Bankruptcy Code do not compel the payment of debt service on certain municipal bonds during the pendency of a bankruptcy proceeding.

In a recent decision, the U.S. Bankruptcy Court for the Southern District of New York held that liquidated damages provisions calculating damages based upon stipulated loss value schedules designed to provide the lessor/owner participant with a return on investment of 4% (and not as a proxy for actual damages) violated New York public policy and were unenforceable as penalties.

On July 16, in an open meeting of the FDIC Board of Directors a memorandum and resolution regarding a Notice of Proposed Rulemaking on a Proposed Amendment to Securitization Safe Harbor Rule was passed. 

The First Circuit recently found that a UCC filing amendment naming the debtor contained an appropriate name and that, when coupled with a corrected collateral description in the amendment, the bondholders’ lien was perfected and therefore unavoidable under the “strong-arm” provisions of the Bankruptcy Code.

The US Court of Appeals for the Ninth Circuit is the latest court in a developing line of case law to find that the doctrine of equitable mootness applies to prevent an aggrieved creditor from unwinding a substantially consummated Chapter 9 municipal bankruptcy plan.

Last week, Governor Pritzker signed HB 1471, giving Illinois new trust laws as of January 1, 2020. This Alert is the first installment in a six-part series on the new Illinois Trust Code, a version of the Uniform Trust Code.

The Securities and Exchange Commission voted 3 to 1 to adopt highly anticipated new and amended rules, forms and guidance relating to registered investment advisers’ and broker-dealers’ conduct and interactions with retail customers.  

In a case of particular significance to parties that enter into forward contracts as means of hedging the future price of commodities used in their business, the U.S. Bankruptcy Court for the Northern District of Ohio has found that a “forward contract merchant” must be in the business of entering into forward contracts in order to generate a profit, not merely as a hedge.

On April 25, the U.S. District Court for the Southern District of New York reversed a bankruptcy court’s finding that a bank’s imposition of a freeze on a married couple’s bank account upon the filing of their Chapter 7 bankruptcy petition, pending instructions from the Chapter 7 trustee, violated the automatic stay.

Having failed in attempts to accelerate the termination of a CDO, an investor group holding senior notes filed an involuntary petition against an issuer to liquidate the CDO before its stated maturity under the U.S. Bankruptcy Code.

On March 28, the Securities and Exchange Commission charged the former controller of the College of New Rochelle, a New York-based not-for-profit college, with violating, and aiding and abetting violations of, the antifraud provisions of the federal securities laws.

Pension shortfalls. Crumbling infrastructure. Wage pressures. These are only a few of the budgetary pressures facing state and local governments. It’s no surprise that, with so many demands on limited tax dollars, funds needed to address social problems are being diverted.

On March 20, the Securities and Exchange Commission voted to propose amendments to existing rules and forms that, if adopted, would modify the registration, communication, offering and reporting processes applicable to registered closed-end investment companies and business development companies regulated under the Investment Company Act.

Insurance companies continue to look to alternative investment funds as a means to increase returns in this low interest rate environment and to add diversification to their portfolios. One impediment to increasing a concentration in alternative investments may be the higher risk-based capital requirements associated with alternative investments. Recently, various participants in the insurance, alternative investment, and rating agency industries have considered addressing that risk-based capital impediment by utilizing a bespoke rated-debt feeder fund structure.

In a break from other recent circuit court decisions, the Fifth Circuit ruled that amounts due under a make-whole provision contained in a note purchase agreement constituted unmatured interest and were not permitted to be paid to a creditor under the Bankruptcy Code.

In a case of constitutional importance, the US Court of Appeals for the First Circuit addressed whether members of the Financial Oversight and Management Board created by PROMESA are “Officers of the United States” subject to the US Constitution’s Appointments Clause.

This article outlines the features of proposals to adjust the applicability of certain capital and liquidity tests and certain enhanced prudential standards for bank holding companies.

Effective February 27, 2019, there are two new reportable events for which an issuer must provide notice to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (EMMA) website.

The SEC Rule 15c2-12 amendments will be effective on and after February 27, 2019 with the effect described in the Release. In addition, the Release describes the SEC’s position on certain material financial obligations that may have an impact on primary offerings in addition to disclosures of reportable events made in the future under Rule 15c2-12.

The Financial Industry Regulatory Authority, Inc. recently issued its 2019 Risk Monitoring and Examination Priorities Letter. The Risk Monitoring and Examination Priorities Letter also directs members to their 2017 and 2018 Reports on Examination Findings. This Client Alert provides brief summaries of some of the more significant issues FINRA’s letter raises.

In December 2017, Congress added a provision to the tax code that allows some taxpayers to defer some capital gain and eliminate other gain if the taxpayer invests in an Opportunity Zone and certain conditions are met. 

A recent decision of the United States District Court for the District of Delaware has provided further support within the Third Circuit for so-called “gift” plans (i.e., plans in which a secured creditor class “gifts” a portion of its plan distribution to a junior class).

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

On December 14, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations issued a Risk Alert reminding investment advisers of their recordkeeping obligations with respect to electronic messaging and summarizing their related observations from recent examinations.