Asset Securitization

Chapman wrote the book on the marketplace lending regulatory landscape that the entire industry has come to rely upon. First published in 2013, the 2024 update covers a vast array of topics affecting the marketplace lending industry.

Chapman is a proud sponsor of the Fund Finance Association (FFA) 13th Annual Global Fund Finance Symposium

Chapman is a proud sponsor of SFVegas 2024, hosted by the Structured Finance Association, bringing together capital markets participants from around the world.

On November 27, 2023, the US Securities Exchange Commission (“SEC”) adopted final Securities Act Rule 192 (“Final Rule 192”) prohibiting certain conflicts of interest in securitization transactions. In general, Final Rule 192 prohibits a “securitization participant” with respect to an “asset-backed security” (“ABS”) from directly or indirectly engaging in any “conflicted transaction” during the applicable prohibition period.

The Corporate Transparency Act (CTA) went into effect January 1, 2024. Under the CTA, all newly created entities are now required to file a report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of formation, unless an entity qualifies under one of 23 exemptions. That means, unless an exemption applies, any newly formed LLC, limited partnership, corporation, statutory trust, or other organization that is created by filing with a secretary of state has an additional federal filing requirement. All existing entities formed prior to January 1, 2024, that do not qualify for an exemption have until the end of 2024 to file a Report.

Our December 6, 2023 Client Alert described very generally important aspects of the “Basel III Endgame” NPR (NPR) that proposed replacing two “subparts” of the existing US Basel III rule. In that Alert, we indicated we would issue a separate Client Alert describing in more detail how the Standardized Approach “risk weights” in Section 32 and “credit conversion factors” (CCFs) in Section 33 of the US Basel III rule differ from the risk weights and CCFs proposed in the NPR (which would be contained in proposed Sections 111 and 112 of the US Basel III rule).

On July 27, 2023, the three federal banking agencies jointly issued a “notice of proposed rulemaking” captioned “Regulatory Capital Rule: Large Banking Organizations and Banking Organizations With Significant Trading Activity” (NPR) that is more commonly described as “the Basel III endgame.”

On August 23, 2023, the Securities and Exchange Commission (the “Commission”) voted 3 to 2 to adopt new and amended rules under the Investment Advisers Act of 1940 (the “Advisers Act”) requiring advisers to private funds to provide additional disclosures to investors in such funds, restrict certain types of preferential treatment to investors, and impose new requirements related to fund audits, books and records, and adviser-led secondary transactions.

On July 27, 2023, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued a joint Notice of Proposed Rulemaking (the “NPR”) proposing significant changes to the US bank capital regulations. The NPR proposes several changes to the regulations for determining required capital for bank securitization exposures and additional changes that will impact securitization exposure capital charges. While the proposed changes impact banks originating both traditional and synthetic securitization of their own assets, and securitization exposures in the form of derivatives, and provide a new method for determining the risk weights of exposures to Non-performing Loan (“NPL”) securitizations, this Client Alert focuses on the impact of the proposed rules on banks investing in securitization transactions (other than NPL securitizations), both by buying asset-backed securities with the intent to hold such securities and by providing financing of securitizations by making loans or entering into asset purchase facilities, either directly or through credit and liquidity facilities provided to asset-backed commercial paper (“ABCP”) conduits.

Chapman welcomes partner Peter Morreale to our Asset Securitization Department. Peter represents issuers, underwriters, servicers, and other entities in connection with asset finance transactions, bank loans, public and private agency and non‐agency MBS and ABS offerings, CLOs, CDOs, private equity transactions, structured finance transactions and purchases, sales and financings of various types of financial assets, and related servicing arrangements. 

The International Comparative Legal Guide - Securitisation 2023, now in its sixteenth edition, is a leading legal text spanning the global securitization market, providing insights into the US and EU CLO market, cross-border trade receivables, taxation, and other topical issues and jurisdictions. Chapman partners David Nirenberg and Steven Kopp, recognized authorities on the tax treatment of US securitization transactions, co-authored the chapter entitled, "U.S. Withholding on Asset-Backed and Structured Securities."

On March 14, 2023, an announcement from the CEO of the newly-created, full-service FDIC-operated Bridge Bank was posted on the Silicon Valley Bank website indicating that the Bridge Bank has “fully stepped into the shoes of the former Silicon Valley Bank.”

On Monday, March 13, 2023, the Federal Deposit Insurance Corporation transferred all deposits—both insured and uninsured—and substantially all assets of the former Silicon Valley Bank to Silicon Valley Bank, N.A, a newly created, full-service FDIC-operated ‘bridge bank’. The FDIC has not stated whether the bridge bank has assumed funding obligations under the former Silicon Valley Bank’s unfunded loan commitments.

Included in this Frequently Asked Questions are some general observations on the Federal Deposit Insurance Corporation (“FDIC”) receivership process for Silicon Valley Bank (“SVB”). The specifics of the receivership process are uncertain at this early stage and, hopefully, more guidance with respect to the issues discussed below will be provided by the FDIC over the next few days.

Chapman is a proud sponsor of SFVegas 2023, the largest gathering of structured finance professionals in the world, presented by the Structured Finance Association (SFA).

Chapman is a proud sponsor of the Fund Finance Association (FFA) 12th Annual Global Fund Finance Symposium.

Chapman is sponsoring the Fund Finance Association Global Symposium.

This article in the Journal of Taxation of Financial Products outlines tax-exempt municipal debt securitization transactions and associated tax issues. Chapman authors, David Nirenberg, Brent Feller, and Steven Kopp, provide an in-depth look at the primary tax issues for parties to both single-class and multiple-class tax-exempt bond securitization transactions.

Chapman will be sponsoring SFVegas 2021, hosted by the Structured Finance Association (SFA). 

Chapman attorney Charles C. Calloway, Jr. spoke at a virtual panel discussion hosted by the Structured Finance Association's (SFA) Women in Securitization (WiS). 

Lenders and investors are taking different approaches to building ESG portfolios based on the entity’s own preferences and values. However, one widely used tool involves screening of select assets or transactions that align with those values.

Chapman Partner Melanie Gnazzo spoke at S&P Global Ratings Structured Finance Summer Series: What Comes Next?

Chapman attorney David Sykes spoke at PACENation Summit 2021.

Chapman attorney Orion Mountainspring spoke at the virtual Investors’ Conference on Solar and PACE Investing, which was sponsored by Chapman.

A recent federal district court decision out of Massachusetts found that a bank was the true lender on a loan subsequently transferred to a trust consisting of student loans. Robinson and Spears v. Nat’l. Collegiate Student Loan Trust 2006-2, 2021 WL 1293707, Case No. 20-cv-10203 ADB (D. Mass. April 7, 2021).

At today’s Earth Day Climate Summit, President Joe Biden announced to world leaders that the United States is committed to cutting its greenhouse gas emissions by 50% to 52% from 2005 levels by 2030.

Last week the Loan Syndications and Trading Association, the Loan Market Association, and the Asia Pacific Loan Market Association jointly published their first ever Social Loan Principles.

In the past few days, two courts have actions that are of significance to marketplace lenders and their funding sources. 

The Securities and Exchange Commission this month announced that the Divisions of Corporation Finance, Examinations, and Enforcement are all undertaking climate or ESG-related initiatives. 

Chapman attorney Melanie Gnazzo spoke at a webinar, entitled "LIBOR Transition: Using AI to Overcome the Challenge of Legacy Contract Analysis," hosted by the Information Management Network.

Chapman attorneys Aaron Efta and Tom Howard spoke at the virtual Equipment Leasing and Finance Association Investors’ Conference on Equipment Finance.

Chapman attorney Melanie Gnazzo spoke at the Virtual Investors' Conference on LIBOR.

Environmental, Social and Governance investing in the United States has reportedly reached an estimated $250 billion in assets under management and is expected to see continued growth in 2021 and beyond. 

Chapman attorney Craig Cohen spoke at the 10th International Bar Association London Finance and Capital Markets Virtual Tax Conference.

Chapman attorneys Lara Daly-Sims and Frank Top will be speaking at the ABS East Virtual 2020 conference.

Chapman attorney Marilynn Tham spoke at the Secured Finance Network's 76th Annual Convention.

Chapman attorney Melanie Gnazzo spoke at The Virtual Investors' Conference on LIBOR. 

In 2015, the Second Circuit Court of Appeals issued an opinion finding that, under the doctrine of federal preemption, a non-bank assignee of a bank loan could not charge and collect the rates and fees that the bank could charge and was therefore subject to state law usury limits.

The Office of the Comptroller of the Currency recently issued its final rule codifying as a regulation that the interest charged on loans that is permissible before the loan is transferred remains in effect after the loan is transferred.

The parties to the closely watched litigation by the Attorney General of Colorado as Administrator of the Colorado Uniform Consumer Credit Code against two marketplace lending platforms have agreed to settle the litigation.

On July 22, Online Lending Policy Institute hosted a conversation covering the new FDIC rule issued on June 25 which adopts the common law doctrine of “valid when made” as well as other topics related to fintech.

The CARES Act, which was designed to support individuals and businesses affected by the COVID-19 pandemic, was signed into law on March 27. This article summarizes various tax provisions in the CARES Act.

The CARES Act, which was enacted to support individuals and businesses affected by the COVID-19 pandemic, provides that borrowers experiencing financial hardship due to the national emergency declared by the President, may request and obtain forbearance on certain federally backed mortgage loans.

The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have been quite active in issuing or proposing new regulations and initiatives focused on financial technology and innovation in financial services.

The Online Lending Policy Institute will be hosting a conversation with Chairman of the FDIC, Jelena McWilliams. Chapman attorney Marc Franson will also be moderating a conversation with FDIC Deputy to the Chairman & Chief of Staff, Brandon Milhorn.

On June 11, the Online Lending Policy Institute hosted a conversation covering the expansive advance notice of proposed rulemaking in the fintech space.

Chapman attorney Marc Franson moderated a conversation with OCC Senior Deputy Comptroller and Chief Counsel, Jonathan Gould, on the proposed new rulemaking from the OCC.

On June 5, the Paycheck Protection Program Flexibility Act of 2020 was signed into law and made key changes to the Paycheck Protection Program just a few weeks before the program’s official termination on June 30.

On May 29, the Office of the Comptroller of the Currency issued its final rule codifying as a regulation that the interest charged on loans that is permissible before the loan is transferred remains in effect after the loan is transferred.

This client alert will address questions about loan forgiveness under the Paycheck Protection Program for both borrowers and lenders as known at the current time, but we note that legislative efforts currently underway may change the terms of these loan forgiveness provisions.

This alert explores the three loan facilities constituting the Main Street Lending Program: the newly announced Main Street Priority Loan Facility, the revised Main Street New Loan Facility, and the revised Main Street Expanded Loan Facility.

On May 5, federal banking regulators adopted an interim final rule that neutralizes the liquidity coverage ratio impact for banks participating in the Federal Reserve’s Money Market Mutual Fund Liquidity Facility and the Paycheck Protection Program Liquidity Facility.

On April 9, the Federal Reserve issued term sheets for six “new” funding facilities under the CARES Act. This client alert describes in detail the Municipal Liquidity Facility.

On April 13, the IRS released Revenue Procedure 2020-26, which provides that forbearances and related modifications of certain mortgage loans will not be treated as replacing the unmodified loan with a newly issued loan for purposes of the REMIC and grantor trust qualification tests (and related REMIC-related taxes).

On April 9 the Federal Reserve issued term sheets for six “new” funding facilities under the CARES Act. Three of those facilities provide for direct loans to companies. 

The Coronavirus Aid, Relief, and Economic Security Act to support individuals and businesses affected by COVID-19 pandemic was signed into law on March 27. This client alert summarizes the various tax provisions in the CARES Act.

On April 9, 2020, the Federal Reserve released a revised term sheet for TALF 2020 that, among other things, broadens the range of assets that qualify as eligible collateral under the program.

Earlier today the Federal Reserve announced it would establish six new funding facilities supported by Treasury funding authorized by Section 4003(b)(4) of the CARES Act.

The Federal Reserve Bank of New York has posted FAQa for the Commercial Paper Funding Facility described in our March 19 client alert, and amended as described in our March 24 client alert.

The Federal Reserve has established a webpage that provides links to a FAQ and other documents for the Money Market Fund Liquidity Facility described in earlier Chapman client alerts.

Yesterday the Federal Reserve announced it was temporarily removing Treasury securities and deposits at Federal Reserve Banks from the supplementary leverage ratio applicable to Category I-III bank holding companies or US intermediate holding companies of foreign banks.  

This client alert has been updated from our March 31, 2020 client alert to reflect guidance from the U.S. Treasury Department and the Small Business Administration.

The cornerstone of the CARES Act’s relief package for small businesses is the Paycheck Protection Program, under which the Small Business Administration will guarantee up to $349 billion in small business loans. 

This Client Alert focuses on some major programs established by the Coronavirus Aid, Relief, and Economic Security Act to financially support, through loans or grants, (1) small businesses, (2) larger businesses, and (3) states and municipalities. 

On March 23, the Federal Reserve announced the establishment of the Term Asset-Backed Securities Loan Facility to support the flow of credit to consumers and businesses. 

On March 23, the Federal Reserve issued further amendments to add negotiable certificates of deposit and all short-term municipal securities to the list of eligible collateral. 

On March 23, the Federal Reserve added municipal issuers and amended the pricing for the commercial paper funding facility announced on March 17 and issued other “program terms and conditions” posted on the website of the Federal Reserve Bank of New York.

This morning, the Board of Governors of the Federal Reserve System announced sweeping actions to help the economy.

On March 18, the Federal Reserve announced a Money Market Fund Liquidity Facility to make loans to banks and certain affiliates secured by certain assets acquired from “prime” money market funds. Earlier today, the Federal Reserve issued amendments to the program.

On March 17, the Federal Reserve Board announced the establishment of two emergency funding facilities that closely mirror facilities established in 2008 during the last financial crisis in providing liquidity to both short and long term funding markets.

Chapman attorney David Sykes spoke at the Structured Finance Association's Vegas 2020 conference.

Chapman attorneys Patrick Quill and Bradley Volkommer spoke at CLO Summit 2019.

Chapman attorney Marc Franson spoke at the 5th Annual ABS Tech Conference.

Chapman attorneys Melanie Gnazzo, David Sykes, and Evan Kelson spoke at the 25th Annual ABS East Conference.

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. 

Chapman attorney Melanie Gnazzo spoke at the Equipment Leasing and Finance Association's 2019 Legal Forum.

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.

Chapman attorneys Marc Franson and Melanie Gnazzo spoke at the 18th Annual Investors' Conference on Equipment Finance. 

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.

Chapman attorneys Preetha Gist, Tim Mohan, and David Sykes spoke at the Structured Finance Industry Group's Vegas 2019 conference.

The state of Colorado initiated two lawsuits against online lending platforms. The suits alleged that the platforms had violated the state’s Uniform Consumer Credit Code by charging interest and some fees in excess of those allowed under Colorado law and that the consumer loan agreements utilized a non-Colorado governing law provision, also in violation of the law.

On September 30, the Governor of California signed into law Senate Bill No. 1235, which amends the California Financing Law (previously known as the Finance Lenders Law) to impose new disclosure requirements on licensed commercial lenders and brokers including for online lending programs doing business in California.

On June 14, the Board of Governors of the Federal Reserve System issued a final rule that establishes credit limits for single counterparties of US bank holding companies and foreign banking organizations with $250 billion or more in assets, and US intermediate holding companies of covered FBOs with $50 billion or more of consolidated assets.

On May 22, the House passed Senate bill S. 2155, which would amend certain Dodd-Frank provisions and, primarily for smaller banks and credit unions, provide additional regulatory relief. President Trump is expected to sign the bill, so that it will take effect as law.  

On May 14, the Basel Committee on Banking Supervision issued two documents entitled “Criteria for Identifying Simple, Transparent and Comparable Short-Term Securitisations” and “Capital Treatment for Simple, Transparent and Comparable Short-Term Securitisations.” 

Today, the Basel Committee on Banking Supervision issued two documents entitled “Criteria for Identifying Simple, Transparent and Comparable Short-Term Securitisations” and “Capital Treatment for Simple, Transparent and Comparable Short-Term Securitisations.”

Chapman’s "Defaulted Securities: The Guide for Trustees and Bondholders" advances understanding and consideration of issues related to trustees and bondholders in both corporate and municipal financings.

This article describes the impact of the Tax Cuts and Jobs Act on securitization transactions. The article addresses in detail the new limitation on the deduction for business interest expense as well as the requirement that the transferee of an equity interest in a partnership engaged in a US trade or business withhold 10% of the amount realized unless the transferor certifies that it is a US person. 

In light of the increasing significance of cybersecurity incidents, the SEC published a press release and additional Commission-level guidance regarding disclosure obligations relating to cybersecurity risks and incidents, which reinforces and expands upon the SEC staff guidance provided in 2011 and addresses two additional topics.

The US Court of Appeals for the District of Columbia Circuit recently issued a decision in a case that involved a question of whether the risk retention requirements imposed by Section 941 of the Dodd-Frank Act required open market CLO managers to retain risk in those transactions they managed. 

On December 20, Congress passed the act commonly referred to as the Tax Cuts and Jobs Act of 2017. Although no provision of the Act was designed specifically to address securitization transactions, two new sets of rules are likely to have significant effects on at least some securitization transactions

On November 2, Representative Kevin Brady released the proposed text of the long-awaited federal income tax reform bill. The bill also includes a provision that creates a limit on the deductibility of interest. If enacted, this provision could have potentially wide-reaching impacts on securitization transactions.

In September, the IRS released proposed regulations that would not only change the types of instruments that are registration-required obligations, but also clarify when a registration-required obligation meets the requirements to be treated as issued in registered form.

On July 6, 2017, the Basel Committee on Banking Supervision issued two consultative documents entitled “Criteria for Identifying Simple, Transparent and Comparable Short-Term Securitisations” and “Capital Treatment for Simple, Transparent and Comparable Short-Term Securitisations.” 

Keeping track of the regulatory developments affecting asset-backed commercial paper (“ABCP”) conduits and their sponsors is a daunting task. This updated desk reference reviews regulatory and legislative developments affecting the ABCP market.

More than a year after the Consumer Finance Protection Bureau submitted a proposed rule to limit consumer financial services contract arbitration clauses, the CFPB sounded the death knell on July 10, 2017, when it released its long-awaited final rule.

On June 12, the Department of Treasury issued the first report in a series regarding regulation of the financial system in a manner consistent with Core Principles set forth in Executive Order 13772 signed by President Trump on February 3, 2017.

The May 2015 decision of the U.S. Court of Appeals for the Second Circuit in Madden v. Midland Funding, LLC sent shockwaves through the marketplace lending industry, and nearly two years later the questions generated by this case remain largely unanswered. These questions have been further complicated by the long-awaited remand decision from the U.S. District Court for the Southern District of New York.

On April 19, the House Financial Services Committee posted a “discussion draft” of a revised version of the CHOICE Act. The discussion draft contains most of the provisions in last year’s bill with a number of important changes.

On February 27, the U.S. District Court for the Southern District of New York issued its long-awaited remand decision in Madden v. Midland Funding, LLC. 

The U.S. Court of Appeals for the D.C. Circuit made headlines following its decision in the PHH Corporation et al. v. Consumer Financial Protection Bureau case. The Court found that the CFPB’s single-director, removable-only-for-cause structure was unconstitutional. However, the Court has now vacated that order in its entirety and set the case to be heard again en banc.

With Republicans retaining control of both chambers of Congress and Donald Trump elected President, the prospects for financial regulatory reform have changed. Many observers point to the Financial CHOICE Act as the best indication of Republican Congressional aspirations for such reform. 

On Friday, Comptroller of the Currency Thomas Curry announced that the Office of the Comptroller of the Currency will issue limited-purpose bank charters to qualified fintech companies.

A recent decision of the Maryland Court of Appeals could require marketplace lenders and others who arrange for federal or state banks to fund consumer loans to consumers residing in Maryland to obtain licenses as “credit services businesses” and could prohibit them from arranging those loans at interest rates exceeding the applicable Maryland usury caps.

On April 4, the U.S. Treasury Secretary announced that the government would release regulations to curb inversions and reduce the ability of companies to avoid taxes through “earnings stripping;” those regulations were published in the Federal Register on April 8th. 

On May 10, 2016 the U.S. Department of the Treasury published a white paper entitled “Opportunities and Challenges in Online Marketplace Lending.” The White Paper follows the “Request for Information” which the Department published in July 2015 to solicit public input on various topics concerning marketplace lending.

On March 4, 2016 the Board of Governors of the Federal Reserve System issued a Notice of Proposed Rulemaking re-proposing a rule that would establish credit limits for single counterparties ofU.S. bank holding companies, foreign banking organizations, and U.S. intermediate holding companies of an FBO, with $50 billion or more of consolidated assets. 

On Friday, March 18, 2016, the United States Supreme Court issued a call for the views of the Solicitor General of the United States before it decides whether to hear an appeal from a Second Circuit Court of Appeals decision rendered last May in the case of Madden v. Midland Funding, LLC.

On March 7, the CFPB announced that it is accepting consumer complaints about online marketplace lenders, giving consumers “a greater voice in these markets and a place to turn to when they encounter problems.” The CFPB also issued a bulletin to provide consumers with information on marketplace lending.

In this article, we provide a brief overview of the key reforms under Regulation AB II, followed by a more focused review of the next compliance hurdle that ABS issuers will face — annual compliance checks to determine continued shelf eligibility.

A recent decision of the U.S. District Court for the Eastern District of Pennsylvania has highlighted once again the regulatory risks that the so-called “true lender” doctrine can create for internet-based lenders who partner with banks to establish exemptions from applicable state consumer protection laws.

A recent decision of the Maryland Court of Special Appeals could impact marketplace and other lenders who arrange for federal or state banks to fund consumer loans in Maryland at rates in excess of the applicable Maryland usury caps. 

The Banking Law Journal republished a Chapman Client Alert.

In the case of Madden v. Midland Funding, LLC, the Second Circuit narrowly interpreted the scope of federal preemption of state usury laws under the National Bank Act as such laws apply to certain non‑bank loan assignees.

The purpose of this article is to provide a general overview of how royalty-backed securitizations work and to encourage further use of royalty-backed securities by leaders in the music, business, and financial industries.

In September 2014, the U.S. banking agencies adopted final rules implementing a liquidity coverage ratio requirement that will test a bank's ability to withstand "liquidity stress periods." In collaboration with the Structured Finance Industry Group (SFIG), Chapman attorneys authored a guide summarizing elements of the final rule that have the greatest impact on the securitization market. 

On September 3, 2014, the US banking agencies adopted final rules implementing a liquidity coverage ratio (LCR) requirement that will test a bank's ability to withstand liquidity stress periods. The specific objective of the LCR rules is to ensure that a bank has enough high quality liquid assets (referred to as HQLA) that can be immediately converted into cash to meet its liquidity needs for a 30-day stress period.

On February 18, 2014, the Federal Reserve issued the final version of new Regulation YY establishing “enhanced prudential standards” for large bank holding companies and large foreign banks operating in the United States.

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.

Federal regulators approved final regulations implementing the “Volcker Rule” on December 10, 2013.

On October 24, 2013, the Board of Governors of the Federal Reserve Board released a proposed rule that introduces a liquidity coverage ratio requirement that will test a bank's ability to withstand "liquidity stress periods." 

On October 4, 2013, a Chicago bankruptcy court judge decided a case which establishes favorable precedent for the securitization market.

On July 2, the Board of Governors of the Federal Reserve System adopted a final rule revising its risk-based and leverage capital requirements. The changes to the Advanced Approaches framework will be effective January 1, 2014 and the new Standardized Approach framework will be effective January 1, 2015. While we are still in the process of reviewing the rule and the release (it totals 971 pages), our initial impressions of the securitization sections of the rule are set forth in this client alert.

Beginning June 10, 2013, many securitization issuers could be required to submit newly executed interest rate swaps for clearing under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and implementing regulations.

On January 7, 2013, the Basel Committee on Banking Supervision (Committee) issued major revisions to the “liquidity coverage ratio” (LCR) it published in 2010.

On December 18, 2012 the Basel Committee on Banking Supervision published a consultative document entitled “Revisions to the Securitisation Framework.” The paper contains the Committee’s proposed revisions to the securitization framework following its “fundamental review” of the existing framework.

By letter dated December 7, 2012, the Division of Swap Dealer and Intermediary Oversight  of the Commodity Futures Trading Commission released interpretive guidance significantly expanding the scope of its October 11, 2012 interpretive letter. The October 11 Letter confirmed that securitization vehicles that satisfy five criteria, including a requirement that they operate consistent with either Regulation AB or Rule 3a-7 under the Investment Company Act of 1940, should not be “commodity pools” as a result of holding a swap nor should their operators be required to register as “commodity pool operators” under the Commodity Exchange Act and CFTC rules. 

By letter dated October 11, 2012, the Division of Swap Dealer and Intermediary Oversight of the Commodity Futures Trading Commission 1 released interpretive guidance confirming that certain securitization vehicles should not be included within the definition of “commodity pool” and that operators of such vehicles should not be included within the definition of “commodity pool operator” under the Commodity Exchange Act and CFTC rules. Separately, in a no-action letter dated October 11, 2012, the Division conditionally extended the deadline for registration as a commodity pool operator from October 12, 2012 to December 31, 2012 for vehicles that are commodity pools solely by virtue of their involvement with swaps.