OCC, Fed, FDIC, SEC, FHFA, HUD Issue Final Rule on Credit Risk Retention

(Jan. 29) The Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the U.S. Department of Housing and Urban Development issued a final rule to implement the credit risk retention requirements of section 15G of the Securities Exchange Act of 1934 (15 USC 78o-11), as added by section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The final rule requires sponsors of asset-backed securities to retain at least 5 percent of the credit risk of the assets underlying the securities and does not permit sponsors to transfer or hedge that credit risk during a specified period. The final rule applies to asset-backed securities issued on or after December 24, 2015, if the securities are backed by residential mortgages. The final rule applies to all other classes of asset-backed securities issued on or after December 24, 2016. Read more.

MSRB Calls for Transparency of Muni-Bond Issuers' Undisclosed Debt 

(Jan. 29) The Municipal Securities Rulemaking Board published its second notice calling for more transparency of undisclosed debt of municipal bond issuers. The MSRB is concerned that investors and other market participants are often unaware of the potential impact of bank loans and other debt-like obligations on the seniority status of existing bondholders and the credit or liquidity profile of an issuer, among other implications. Read the regulatory notice here.

IOSCO Issues Nine Standards For Transacting Uncleared Derivatives

(Jan. 28) The International Organization of Securities Commissions issued nine standards, emphasizing legal certainty, to mitigate risks associated with uncleared derivatives transactions. The standards, which are intended to complement margin, address trade documentation, post-trade confirmation techniques, valuation processes, reconciliation strategies, portfolio compression policies, and dispute resolution mechanisms. The standards can be seen here.

CFTC Announces Energy and Environmental Markets Committee Members

(Jan. 26) The Commodity Futures Trading Commission announced membership list of Energy and Environmental Markets Advisory Committee. Formerly the Energy Markets Advisory Committee, it was created in 2008 to advise the Commission on important new developments in energy and environmental futures markets that may raise new regulatory issues,  the appropriate regulatory response to ensure market integrity and competition, and how to protect consumers. 

See membership list here.

See associate membership here.

Regulators Move on Overcharging Clients

(Jan 30) Attuned to how institutional clients, and more so ordinary investors, are hurt by excessive fees, FINRA levied a $350,000 fine against an investment company and a private equity firm refunded money to investors after the SEC determined it had overcharged them. Read more.