Financial Services Update______April 11, 2011
Volume 6, No. 14



IN THIS ISSUE

Insights from Winston & Strawn

In the News

Banking Agency Developments

Treasury Department Developments

Commodity Futures Trading Commission

Securities and Exchange Commission

Exchanges and Self-Regulatory Organizations

Judicial Opinions

Rules Effective Dates

Winston & Strawn Speaking Engagements and Publications


Insights from Winston & Strawn [Top]

The Private Fund Investment Advisers Registration Act of 2010 (the "Registration Act"), contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), increased the threshold for investment advisers to be registered with the Securities and Exchange Commission (the "SEC") from $25 million to $100 million of assets under management. These "mid-sized" advisers will be required to withdraw from registration with the SEC and register with one or more states pursuant to state law. Additionally, the Dodd-Frank Act repealed the so-called "private adviser exemption" relied on by advisers to many hedge funds and other private funds and in its place added several new, limited exemptions (such as for private fund managers with assets under management of less than $150 million, or "foreign private advisers," as defined). As a result of these changes, nearly every investment adviser that does business in the United States will be required to register either with the SEC or state securities authorities, or if exempt from SEC registration, will still be required to submit reports to the SEC. In November 2010, the SEC issued proposed rules implementing the Registration Act. Please click here to view our client briefing on these proposed rules.
In an April 8, 2011 letter from Robert Plaze, associate director of the Division of Investment Management (the "Division") of the SEC to the president of the North American Securities Administrators Association, Inc., Mr. Plaze stated that he anticipates that the SEC will complete its implementing rulemaking by July 21, 2011 in accordance with the Dodd-Frank Act, but expects that the SEC will consider providing additional time for investment advisers affected by these provisions to come into compliance. Specifically, Mr. Plaze states that the SEC will consider extending the date by which mid-sized advisers must transition to state regulation such that all SEC-registered advisers would be required to report their eligibility for registration with the SEC in the first quarter of 2012. Those no longer eligible for SEC registration (i.e., mid-sized advisers) would have a grace period providing them time to register with the appropriate state regulators and come into compliance with state law before withdrawing their SEC registration. Mr. Plaze cites re-programming of the investment adviser registration depository (IARD) as necessitating this delay. Further, with respect to those advisers who relied on the "private adviser exemption," Mr. Plaze said that he expects the SEC to consider extending the date by which these advisers must register and come into compliance with the obligations of a registered adviser until the first quarter of 2012.
Although SEC staff indicates by this letter that there will be a delay until the first quarter of 2012, no delay will become effective until formally adopted by the SEC. Regardless of whether there is a delay or not, we suggest that advisers remain diligent in preparing the registration applicable to it and coming into compliance with the related obligations. We will continue to monitor developments in this area.


In the News [Top]
  • SEC Examining Rules for Trading Private Company Shares.
On April 8th, the Washington Post reported that the SEC is examining its private company stock trading rules. Examination. See also Wall Street Journal.
  • Hedge Funds Concerned about Insider Trading.
On April 7th, Bloomberg reported that hedge funds are growing increasingly concerned about insider trading, conducting internal workshops, attending seminars and engaging consultants in order to educate staff and detect improper trading activity. Growing Concerns.
  • Regulatory Uncertainties.
On April 6th, Reuters reported on the regulatory costs and uncertainties that smaller banks face as the rules implementing the Dodd-Frank Act are adopted. Uncertainties.
  • Basel Committee Develops Risk Methodology.
On April 6th, Reuters reported that the Basel Committee on Banking Supervision has developed a method for identifying whether a financial institution poses systemic risk, requiring the holding of additional capital. Systemic Risk.
  • Court Extends Deferred Prosecution Agreement.
On April 6th, Bloomberg reported that a federal district court, at the request of the U.S. Attorney, has extended a deferred prosecution agreement between the Justice Department and Royal Bank of Scotland Group Plc. (RBS). Prosecutors alleged that ABN Amro, which had been acquired by RBS, had engaged in transactions with state-sponsored terrorists, laundering their money through the U.S. banking system. Extended Deferral.
  • European Bank Borrowed the Most from Federal Reserve's Discount Window.
On April 5th, Bloomberg reported that Dexia SA, a European bank, borrowed the most from the Federal Reserve's discount window during the financial crisis. Dexia's average daily loan amount was $12.3 billion. It had guaranteed numerous municipal bond offerings and its bankruptcy would have jeopardized various municipal bond projects and money market funds. Dexia.
  • Material Disclosure.
On April 5th, the New York Times' DealBook discussed how investors, issuers, the SEC and the courts view "materiality." Disclosure.
  • Agencies Issue Risk Retention Proposal.
On March 31st, six federal agencies, the Federal Reserve Board, the OCC, the FDIC, the SEC, the Federal Housing Finance Agency, and the Department of Housing and Urban Development, jointly issued a proposed rule that would require sponsors of asset-backed securities (ABS) to retain at least 5 percent of the credit risk of the assets underlying the securities and would not permit sponsors to transfer or hedge that credit risk. The rule would provide sponsors with various options for meeting the risk-retention requirements of the Dodd-Frank Act. Comments should be submitted on or before June 10, 2011. Joint Agency Press Release. FDIC Chairman Sheila Bair noted the proposal's unusually large number of questions posed for comment, focusing on the Qualified Residential Mortgage exemption from the risk retention requirements and the proposed incorporation of minimum servicing standards in the QRM exemption. Bair Remarks.

Banking Agency Developments [Top]
  • OCC Publishes Report on Government-Guaranteed Export Working Capital Loan Programs.
On April 7th, the OCC published a Community Developments Insights report, which looks at bank participation in the U.S. Export-Import Bank's Working Capital Guarantee Program and the Small Business Administration's Export Working Capital Program. By reducing lender risk, these programs help banks supply working capital credit to small business exporters nationwide. The report highlights how banks can use these programs to provide financing to their customers who are seeking to sell products and services in overseas markets. OCC Press Release.
  • Federal Reserve Board Proposes the Repeal of Regulation Q.
On April 6th, the Federal Reserve Board requested comment on a proposed rule repealing the Board's Regulation Q, which prohibits the payment of interest on demand deposits by institutions that are member banks of the Federal Reserve System. The proposed rule would implement Section 627 of the Dodd-Frank Act, which repeals Section 19(i) of the Federal Reserve Act in its entirety effective July 21, 2011. The repeal of that section of the Federal Reserve Act on that date eliminates the statutory authority under which the Board established Regulation Q. The proposed rule would also repeal the Board's published interpretation of Regulation Q and would remove references to Regulation Q found in the Board's other regulations, interpretations, and commentary. The Board requests comment on whether the repeal of Regulation Q will have implications for balance sheets and income of depository institutions, short-term funding markets such as overnight federal funds market, the demand for interest-bearing demand deposits, and competitive burden on smaller depository institutions. Comments should be submitted within 30 days after publication in the Federal Register, which is expected shortly. Federal Reserve Board Press Release.
  • Supervisory Expectations for Banks Using Quantitative Models.
On April 4th, the OCC issued a bulletin on its "Supervisory Guidance on Model Risk Management." The Supervisory Guidance, developed with the Federal Reserve Board, provides a statement of expectations for banks that use quantitative models in any aspect of their business. The guidance addresses "model risk," which is the potential for damage when models play a material role in bank decision making. OCC Press Release.
  • Fourth Quarter 2010 Mortgage Metrics Report.
On March 31st, the OCC and the Office of Thrift Supervision issued the Fourth Quarter 2010 Mortgage Metrics Report. The report shows that 87.6 percent of 32.9 million loans were current and performing at the end of the fourth quarter of 2010. While mortgage delinquency levels remained elevated, the overall quality of the mortgages included in the report improved from the previous quarter. The percentage of mortgages that were seriously delinquent declined for the fourth consecutive quarter to the lowest level since the second quarter of 2009. OCC-OTS Joint Press Release.
  • Federal Reserve Board Proposes Designated Financial Market Utilities Rule.
On March 30th, the Federal Reserve Board requested comment on a proposed rule related to the supervision of financial market utilities (FMUs) designated as systemically important by the Financial Stability Oversight Council. The proposed rule would establish risk-management standards governing the operations related to the payment, clearing, and settlement activities of designated FMUs, except those registered as a clearing agency with the SEC or as a derivatives clearing organization with the CFTC. The proposed risk-management standards are based on the existing international standards that the Board has incorporated previously into its Policy on Payment System Risk. The proposed rule would also establish requirements and procedures for advance notice of material changes to the rules, procedures, or operations of a designated FMU for which the Board is the primary supervisor. Comments should be submitted within 45 days from publication in the Federal Register, which is expected shortly. Federal Reserve Board Press Release.
  • Resolution Plans and Credit Exposure Reports.
On March 29th, the FDIC voted to release a joint Notice of Proposed Rulemaking with the Federal Reserve Board. The FDIC and Federal Reserve Board are requesting comment on a proposed rule implementing the requirements in section 165(d) of the Dodd-Frank Act regarding resolution plans and credit exposure reports. Section 165(d) requires each nonbank financial company supervised by the Federal Reserve Board and each bank holding company with assets of $50 billion or more to periodically report to the Board, the FDIC, and the Financial Stability Oversight Council the plan of such company for rapid and orderly resolution in the event of material financial distress or failure; and the nature and extent of credit exposures of such company to significant bank holding companies and significant nonbank financial companies and the nature and extent of the credit exposures of significant bank holding companies and significant nonbank financial companies to such company. Resolution plans would have to be submitted within 180 days of the effective date of a final regulation and credit exposure eports would have to be filed 30 days after the end of each calendar quarter. Comments should be submitted within 60 days after publication in the Federal Register, which is expected shortly. FDIC Press Release.
  • Federal Reserve Launches Interactive Web-Based Guide to the Flow of Funds Accounts.
On March 28th, the Federal Reserve Board issued a press release announcing the launch of a new interactive web-based guide to the Flow of Funds Accounts. The tools and descriptions in the guide will help users explore the structure and content of the quarterly Flow of Funds statistical release and the Integrated Macroeconomic Accounts for the United States. The guide will allow users to search for series, browse tables of data, and identify links among series within the Flow of Funds accounts. It will also provide descriptions of each of the published tables and information on the source data underlying each series. To access the guide visit: www.federalreserve.gov/apps/fof/. Federal Reserve Board Press Release.
  • OCC Workshops.
The OCC will host workshops for directors of nationally chartered community banks and federal savings associations in Houston, Texas on May 10-11, 2011. The workshops provide practical information that expands bank directors' skills and understanding of issues facing their banks. The workshops cover risk assessment ("Directors: Where is the Risk in Your Bank") on May 10, and compliance risk ("Compliance Risk: What Directors Need to Know") on May 11. OCC Houston Workshops Press Release.
The OCC will also host a workshop for directors of nationally chartered community banks and federal savings associations in Kansas City, Missouri on May 16-18, 2011. The workshop, which is entitled "A Director's Challenge: Mastering the Basics", is geared primarily to directors of national community banks and federal savings associations with assets of less than $1 billion who would like to review the fundamental requirements of their position. OCC Kansas City Workshop Press Release.

Treasury Department Developments [Top]
  • Additional Libyan Designations.
On April 8th, the Treasury Department announced the designation of five senior Libyan government officials and two entities owned or controlled by children of Muammar Qadhafi pursuant to Executive Order 13566. As a result of the action, any assets of the designees subject to U.S. jurisdiction are frozen, and U.S. persons are prohibited from engaging in business with them. Treasury Department Press Release.
  • FinCEN Releases Commercial Real Estate Fraud Analysis and Advisory.
On March 30th, the Financial Crimes Enforcement Network released its analysis of suspicious activity reports (SARs) concerning possible fraud in the commercial real estate financing arena. The analysis, "Commercial Real Estate Financing Fraud Suspicious Activity Reports by Depository Institutions," found that reported incidences of suspicious activity in commercial real estate financing almost tripled between 2007 and 2010. In conjunction with the analysis, FinCEN also released a Commercial Real Estate Fraud Advisory to assist financial institution efforts to help law enforcement target this type of fraudulent activity. The advisory provides some examples of common commercial real estate fraud (CREF) schemes and also suggests financial institutions use the term "CREF" when completing SAR narratives involving potential commercial real estate fraud. FinCEN Press Release.
  • FinCEN's 2010 Mortgage Fraud Report.
On March 28th, the Financial Crimes Enforcement Network issued "Mortgage Loan Fraud SAR Filings In Fourth Quarter and Calendar Year 2010," which presents full year data showing the number of suspicious activity reports involving mortgage loan fraud. The report covers all of 2010 and shows increases in suspicious activity reports involving mortgage loan fraud, and potential abuse of the bankruptcy system to facilitate fraud. FinCEN Press Release.

Commodity Futures Trading Commission [Top]
  • Commissioner Sommers Comments on Proposed SEF Rules.
On April 6th, Bloomberg reported that CFTC Commissioner Jill Sommers believes that the agency's proposed swap execution facility rules are too restrictive. Restrictions.
  • Open Meeting.
The CFTC will hold an Open Meeting on April 12, 2011, where it is scheduled to consider margin requirements for uncleared swaps for swap dealers and major swap participants; and conforming amendments to 17 CFR Parts 1, 5, 7, 8, 15, 18, 21, 36, 41, 140, 145, 155, and 166 resulting from the Dodd-Frank Act. CFTC Press Release.
  • CPO Registration Relief Granted.
On March 22nd, the CFTC's Division of Clearing and Intermediary Oversight provided no-action relief to the general partners of two commodity pools from registering as CPOs under Section 4m(1) of the Commodity Exchange Act, and allowed an affiliated, registered CPO ("designee") to serve as the CPO of the pools instead, where, among other things: (1) the general partners and the designee are under common ownership and control; (2) the general partners have delegated all of their management authority to the designee; (3) the general partners do not engage in the solicitation of investors for the pool and do not manage property of the pool; and (4) each general partner and the designee executed and submitted to the Division a written acknowledgement of joint and several liability for any violation by either of them of the Act or the Commission's regulations in connection with the operation of their respective pools. CFTC Letter No. 11-01.

Securities and Exchange Commission [Top]
New Final Rules
  • Technical Amendment to Exchange Act Procedures for the Filing of SRO Proposals.
On April 7th, in anticipation of a possible Federal government shutdown, the SEC amended Rule 19b-4(a) under the Securities Exchange Act of 1934 so that references to "business day" in Section 19(b) of the Exchange Act and Rule 19b-4 refer to a day other than a Saturday, Sunday, Federal holiday, a day that the U.S. Office of Personnel Management has announced that Federal agencies in the Washington, D.C. area are closed to the public, a day on which the Commission is subject to a Federal government shutdown in the event of a lapse in appropriations, or a day on which the Commission's Washington, D.C. office is otherwise not open for regular business. The new rule is effective immediately. SEC Release No. 34-64251.
  • Amendment to the Supplemental Standards of Ethical Conduct for SEC Members and Employees.
On April 4th, the SEC amended its Supplemental Standards of Conduct for Members and Employees to eliminate a recently established prior approval requirement for outside employment. SEC Release No. 34-64172.
Requests for Comment
  • Limit Up - Limit Down Proposal Submitted.
On April 5th, the SEC announced that national securities exchanges and the Financial Industry Regulatory Authority filed proposals to establish a new "limit up - limit down" mechanism to address extraordinary market volatility in U.S. equity markets. Under the proposal, trades in listed stocks would have to be executed within a range tied to recent prices for that security. The new limit up - limit down mechanism would replace the existing single stock circuit breakers. Comments should be submitted within 21 days after publication in the Federal Register, which is expected shortly. SEC Press Release.
  • SEC Proposes Rules Requiring Compensation Committee Listing Standards.
On March 30th, the SEC requested comment on proposed rules directing the national securities exchanges to adopt certain listing standards related to the compensation committee of a company's board of directors, as required by the Dodd-Frank Act. The proposal also would require new disclosures from companies concerning their use of compensation consultants and conflicts of interest. The proposal requires the "listing standards" to address the independence of the members on a compensation committee, the committee's authority to retain compensation advisers, and the committee's responsibility for the appointment, payment, and work of any compensation adviser. Once an exchange's new listing standards are in effect, a listed company must meet these standards in order for its shares to continue trading on that exchange. Comments should be submitted on or before April 29, 2011. SEC Press Release.
Other Developments
  • Proxy Access Oral Arguments.
On April 7th, the Wall Street Journal summarized oral arguments before the D.C. Circuit in a lawsuit challenging the SEC's proxy access rules. The U.S. Chamber of Commerce and the Business Roundtable claim the Commission failed to adequately assess the costs of the new rules. Oral Arguments.
  • Delayed Rulemaking.
On April 7th, Reuters reported that the SEC will not complete new fiduciary duty rules for broker-dealers until later this year. Rulemaking on mutual fund 12(b)1 fees will be delayed to next year. Rulemaking.

Exchanges and Self-Regulatory Organizations [Top]
BATS Exchange
  • Options Trading.
On March 28th, the SEC provided notice of the BATS Exchange's proposal to create a directed order program on a 6-month pilot basis. Comments should be submitted on or before April 22, 2011. SEC Release No. 34-64132.
Depository Trust Company
  • SEC Approves Amendment to FAST Program.
On April 5th, the SEC approved the Depository Trust Company's proposal to eliminate from its FAST program rules, the requirement that FAST transfer agents maintain a balance certificate for those securities whose issuers are "participating" in the direct registration system. SEC Release No. 34-64191.
Financial Industry Regulatory Authority
  • FINRA Clarifies Rules on the Treatment of Non-Margin Eligible Securities.
On April 7th, the Financial Industry Regulatory Authority issued a Regulatory Notice clarifying its customer maintenance margin requirements and the application of maintenance loan value for equity securities that do not meet the definition of a margin equity security under Regulation T. Firms have until July 1, 2011, to comply with these requirements.
  • FINRA Issues Guidance on Low-Priced Securities.
On April 4th, the Financial Industry Regulatory Authority issued a Regulatory Notice providing guidance to firms on low-priced equity securities in customer margin and firm proprietary accounts.
  • Third-Party Service Providers.
On March 29th, the Financial Industry Regulatory Authority requested comment on a proposed new rule that would clarify a member firm's obligations and supervisory responsibilities regarding outsourcing arrangements. Proposed FINRA Rule 3190 (Use of Third-Party Service Providers) would make clear that outsourcing a function or activity related to its business as a regulated broker-dealer to a third-party service provider does not relieve a member firm of its obligation to comply with applicable securities laws and regulations and FINRA and Municipal Securities Rulemaking Board rules; and the firm cannot delegate its responsibilities for, or control over, any outsourced functions or activities. The proposal also requires a member firm to have supervisory procedures, including due diligence measures, to ensure that its arrangements with third-party service providers are reasonably designed to achieve compliance with applicable securities laws and regulations and FINRA and MSRB rules. Further, the proposed rule imposes additional restrictions and obligations that apply solely to a clearing and carrying member firm and its third-party service provider arrangements. Comments should be submitted on or before May 13, 2011. FINRA Regulatory Notice 11-14.
NASDAQ Stock Market
  • NASDAQ-100 Index to Undergo a Special Rebalance.
On April 5th, NASDAQ OMX Group announced that the NASDAQ-100 Index will undergo a Special Rebalance effective prior to the market opening on Monday, May 2, 2011. The Special Rebalance will not change the methodology used to calculate the NASDAQ-100 Index nor the component securities of the index. The Special Rebalance is intended to bring the weights of the Index Securities closer in line with their actual market capitalizations. NASDAQ OMX Group Press Release.
  • NASDAQ Opening Cross.
On March 29th, the SEC provided notice of the NASDAQ Stock Market's proposed change to the rules governing the NASDAQ Options Market and, in particular, those overning the opening of trading at the start of the trading day and at the resumption of trading following a halt. NASDAQ believes that a Halt Cross would create a more orderly opening following a trading halt. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of April 11. SEC Release No. 34-64143.
NYSE Regulation
  • NYSE Regulation Advises of Amendments Concerning DMM Unit Communications.
On April 6th, NYSE Regulation advised of recent amendments that expand the category of persons with whom DMM (designated market maker) unit personnel on the trading floor may communicate. In addition, the amendments expand the means of permissible communications to include certain written electronic communications between the DMM unit's post location on the Exchange Floor and specified off-Floor personnel. The amendments are effective April 11, 2011. NYSE Regulation Information Memo 11-11.
  • New Circuit Breakers Announced.
On March 31st, NYSE Regulation announced its Second Quarter 2011 circuit breakers. NYSE Regulation Information Memo 11-10.
Options Clearing Corporation
  • Proposed Clarification of Stock Loan Program Is Approved.
On April 5th, the SEC approved the Options Clearing Corporation's proposed clarification of the regulatory treatment under Rule 15c3-12 of collateral and margin posted by clearing members participating in stock loan transactions through OCC's Stock Loan/Hedge Program or Market Loan Program. The clarification expands OCC's prior interpretive relief to make clear that: clearing members are not required to take a net capital deduction with respect to any excess of the collateral over the market value of the loaned stock; and the interpretive relief also applies to stock loan transactions submitted to OCC for clearance through the Market Loan Program. Any over-collateralization of the loaned stock will be secured and offset by Additional Margin charges/credits applied by OCC. Therefore, any such excess collateral on loaned stock also would not be deemed to constitute an unsecured receivable for purposes of Rule 15c3-1. SEC Release No. 34-64181.
  • Expansion of Internal Cross-Margining Program Is Proposed.
On April 1st, the SEC provided notice of the Options Clearing Corporation's filing of a proposed rule change to allow for an expansion of OCC's internal cross-margining program to include the ability of a pair of affiliated clearing members to establish an internal non-proprietary cross-margining account. Comments should be submitted on or before April 28, 2011. SEC Release No. 34-64167.
  • OCC to Clear Relative Performance Options.
On March 24th, the SEC approved the Options Clearing Corporation's proposal to accommodate the clearance of options on certain indexes measuring the relative performance of one reference security or reference index relative to a second reference security or reference index. SEC Release No. 34-64119.

Judicial Opinions [Top]
  • Derivative Lawsuit against Abercrombie & Fitch Executives is Reinstated.
On April 5th, the Sixth Circuit addressed the appointment of special litigation committees (SLC) for the investigation of derivative shareholder claims under Delaware law. Shareholders of Abercrombie & Fitch Co. filed a derivative suit on behalf of the company against several of its officers and directors alleging that they caused Abercrombie to make misleading public statements which ultimately harmed the company. As a Delaware company, Abercrombie invoked the Delaware provision allowing it to form a SLC to investigate the claims. The SLC recommended that Abercrombie seek dismissal of the lawsuit, which Abercrombie did. The district court granted the motion but the Sixth Circuit reversed. Because one of the two members of Abercrombie's SLC recused himself from considering the allegations made against its COO, the Sixth Circuit found that the SLC was not independent. Therefore, the trial court could not base dismissal of the lawsuit on the SLC's recommendation that dismissal be sought. The Booth Family Trust v. Jeffries.
  • Wachovia Securities Fraud Lawsuit is Partially Dismissed.
On March 31st, the U.S. District Court for the Southern District of New York dismissed the Rule 10b-5 securities fraud allegations brought against Wachovia Corp. and various related entities and individuals. The court found that plaintiffs failed to allege with sufficient particularity the misrepresentations defendants allegedly made concerning the risks posed by the bank's newly adopted home lending policy or the defendants' scienter. It noted that the Second Circuit has yet to rule on whether the "core operations" doctrine, which imputes scienter to key officers, survives the Private Securities Litigation Reform Act. The Court allowed certain Securities Act claims to proceed, which alleged that the underwriters of Wachovia's mortgage bonds made material misrepresentations concerning Wachovia's loan-to-value ratios. In re Wachovia Securities Litigation.

Rules Effective Dates [Top]
  • Technical Amendment to Rule 19b-4: Filings with Respect to Proposed Rule Changes by Self-Regulatory Organizations - Effective April 7, 2011.
The Securities and Exchange Commission is amending Rule 19b-4(a) under the Securities Exchange Act of 1934 (the "Exchange Act") so that references to "business day" in Section 19(b) of the Exchange Act and Rule 19b-4 thereunder refer to a day other than a Saturday, Sunday, Federal holiday, a day that the U.S. Office of Personnel Management has announced that Federal agencies in the Washington, DC area are closed to the public, a day on which the SEC is subject to a Federal government shutdown in the event of a lapse in appropriations, or a day on which the SEC's Washington, DC office is otherwise not open for regular business. Technical Amendment.
  • Shareholder Approval of Executive Compensation and Golden Parachute Compensation - Effective April 4th, 2011.
On January 25th, 2011, the SEC adopted a rule to implement the provisions of the Dodd-Frank Act relating to shareholder approval of executive compensation and "golden parachute" compensation arrangements. Section 951 of the Dodd-Frank Act amends the Securities Exchange Act of 1934 by adding Section 14A, which requires companies to conduct a separate shareholder advisory vote to approve the compensation of executives, as disclosed pursuant to Item 402 of Regulation S-K or any successor to Item 402. Section 14A also requires companies to conduct a separate shareholder advisory vote to determine how often an issuer will conduct a shareholder advisory vote on executive compensation. In addition, Section 14A requires companies soliciting votes to approve merger or acquisition transactions to provide disclosure of certain "golden parachute" compensation arrangements and, in certain circumstances, to conduct a separate shareholder advisory vote to approve the golden parachute compensation arrangements. Executive Compensation and Golden Parachute Rules.

Winston & Strawn Speaking Engagements and Publications [Top]
  • Implementing the Durbin Amendment: What Was the Fed Thinking?
The Federal Reserve Board, on December 16, 2010, approved proposing a rule to implement the Durbin Amendment in the Dodd-Frank Act. Briefing.

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