Week InAdvance July 21, 2014

 

Relevant Congressional Activity  |  Relevant Agency Activity

The week in Washington marks the fourth anniversary of the passage of the Dodd-Frank Act. It will also be a week buzzing with talk about inversions - the strategy by which a growing number of U.S. companies are moving their tax residences abroad to lower-tax jurisdictions.

 

Time runs short before the August recess. The House is scheduled to be in session just nine more weeks in all of 2014. There's important work left to be done on appropriations, highway authorization programs and expired tax provisions. But so far, only one bill - a job training measure - has made it through both the House and Senate.

 

On Tuesday, the Senate Finance Committee will shine the spotlight on inversions. Neither Democrats nor Republicans like inversions, but they disagree on what to do about them. However, last week, Finance Committee Ranking Member Orrin Hatch (R-UT) voiced some support for finding a short-term solution to help stem the tide of companies moving their tax residences overseas. Tuesday's hearing should provide valuable insight into how lawmakers' views may be evolving on this increasingly controversial issue.

 

Also on Tuesday, the Senate's Permanent Subcommittee on Investigations will examine the use of financial products to avoid taxes. Witnesses include executives from Renaissance Technologies LLC, which is in a dispute with the IRS over a set of trades that it used to lower the tax rate paid by investors.

 

On Wednesday, the SEC votes on rules for the riskiest money-market mutual funds. These funds would have to let their share prices fluctuate and charge investors withdrawal fees during times of stress under tougher proposed rules.

 

Please see below for further detail on these events and others in Washington this week.

RelevantCongressionalActivityRelevant Congressional Activity

 

House Financial Services Committee

On Wednesday, July 23, 2014, the House Financial Services Committee will hold a full committee hearing on "Assessing the Impact of the Dodd-Frank Act Four Years Later." Witness testimony will be given by:

  • Mr. Dale K. Wilson, Chairman, President, and Chief Executive Officer, First State Bank
  • Mr. Anthony J. Carfang, Partner, Treasury Strategies Inc.
  • Mr. Paul H. Kupiec, Resident Scholar, American Enterprise Institute
  • Mr. Thomas C. Deas, Vice President & Treasurer, FMC Corporation, on behalf of the Coalition for Derivatives End-Users  

On Thursday, July 24, 2014, the House Financial Services Subcommittee on Capital Markets and GSEs will hold a hearing on "Oversight of the SEC's Division of Corporation Finance.

 

Senate Finance Committee

On Tuesday, July 22, 2014, the Senate Finance Committee will hold a hearing on "The U.S. Tax Code: Love It, Leave It or Reform It!: A discussion of the current U.S. system of international taxation." Witness testimony will be given by:

  • Mr. Robert B. Stack; Deputy Assistant Secretary for International Tax Affairs; U.S. Department of the Treasury; Washington, DC
  • Mr. Pascal Saint-Amans, Director; Centre for Tax Policy and Administration; Organisation for Economic Co-operation and Development (OECD); Paris, France
  • Dr. Mihir A. Desai; Mizuho Financial Group Professor of Finance & Professor of Law; Harvard University; Cambridge,, MA
  • Dr. Peter R. Merrill; Director, National Economics and Statistics Group; PricewaterhouseCoopers; Washington, DC
  • Dr. Leslie Robinson; Associate Professor of Business Administration; Tuck School of Business, Dartmouth College; Hanover, NH
  • Mr. Allan Sloan; Senior Editor at Large; Fortune; New York, NY  

Senate Homeland Security and Governmental Affairs Committee

On Tuesday, July 22, 2014, the Senate Permanent Subcommittee on Investigations will hold a hearing on "Abuse of Structured Financial Products: Misusing Basket Options to Avoid Taxes and Leverage Limits." The Subcommittee will examine a set of transactions that utilize financial engineering and structured financial products to attempt to avoid paying U.S. taxes on short-term capital gains. Witness testimony will be given by:

  • Steven M. Rosenthal; Senior Fellow; Urban-Brookings Tax Policy Center; Washington, DC
  • James R. White; Director, Tax Issues; U.S. Government Accountability Office; Washington DC
  • Martin Malloy; Managing Director; Barclays; London, United Kingdom
  • Satish Ramakrishna; Managing Director, Deutsche Bank Securities Inc.; Global Head of Risk and Pricing for Global Prime Finance; New York, NY
  • Mark Silber; Executive Vice President, Chief Financial Officer, Chief Compliance Officer, and Chief Legal Officer; Renaissance Technologies LLC; New York, NY
  • Jonathan Mayers; Counsel; Renaissance Technologies LLC; New York, NY
  • Gerard LaRocca; Chief Administrative Officer, Americas, Barclays; Chief Executive Officer, Barclays Capital Inc.; New York, NY
  • M. Barry Bausano; President and Managing Director, Deutsche Bank Securities Inc.; Co-Head of Global Prime Finance; New York, NY
  • Peter Brown; Co-Chief Executive Officer and Co-President; Renaissance Technologies LLC; East Setauket, NY
RelevantAgencyActivityRelevant Agency Activity

 

Federal Deposit Insurance Corporation & the Office of the Comptroller of the Currency

On Thursday, July 24, 2014, the FDIC and the OCC will hold the "2014 Joint Mutual Forum" to consider interest-rate risk, third-party relationships and mutual holding companies. The intent of the Forum is to promote the operations of mutual depository institutions and discuss industry trends. The forum will address topics of interest to the mutual industry, including the latest legislation, an economic outlook, cybersecurity challenges, and regulatory compliance updates. Attending will be:

  • Martin J. Gruenberg, Chairman, Federal Deposit Insurance Corporation
  • Thomas J. Curry, Comptroller of the Currency 

Securities and Exchange Commission

On Wednesday, July 23, 2014, the SEC will hold an open meeting to consider amendments to money-market funds and Form PF.

  • The Commission will consider whether to adopt amendments to certain rules under the Investment Company Act of 1940 that govern the operation of money market funds and related amendments to Form PF under the Investment Advisers Act of 1940. The Commission will also consider whether to issue a related notice of proposed exemptive relief.
  • The Commission will consider whether to (i) re-propose amendments to the principal rule under the Investment Company Act of 1940 that governs the operation of money market funds to address provisions that reference credit ratings and (ii) propose an amendment to the diversification provisions in that rule. 

On Wednesday, July 23, 2014 and Thursday, July 24, 2014, the SEC will hold two closed meetings. On the 23rd, the SEC will consider institution and settlement of administrative proceedings and other matters relating to enforcement proceedings. On July 24th the SEC will consider institution and settlement of injunctive actions, institution and settlement of administrative proceedings, a litigation matter, and other matters relating to enforcement proceedings.