Banking and Financial Services

This Note describes the bank regulatory anti-tying rules for bank lenders and methods of compliance when bank and non-bank products or services are offered in a single transaction.

This Note describes the factors and processes for determining whether an investment in a banking or nonbanking organization constitutes a controlling investment under federal banking law.  It includes a discussion of the implications of a finding of control, and guidelines for structuring investments in order to avoid control.   

This is a discussion of the right of set-off in New York under common law, statutes and contractual provisions.

This Note discusses the general principles of margin lending, how margin loans are regulated and consequences of not abiding by the margin rules.

This Note discusses the margin regulations applicable to US broker-dealers. 

This Note describes the regulatory issues involved in structuring private equity investments in US banking organizations.  Topics include structuring investments to address control issues, understanding the characteristics of various bank charters, and deciding whether to invest in an existing institution or create a new one. The Note also discusses the specific issues with investing in a failed depository institution.  

This note discusses bank failures and the methods the FDIC uses to resolve them. This Note will be updated following the adoption of the financial regulatory reform to reflect the expanded role of the FDIC.

Note on FDIC deposit insurance. 

This Note lists categories of risk factors commonly included in SEC periodic reports of Fortune 500 public companies in the banking and financial services industry (based on their SIC filing code) and sets out sample disclosure taken from SEC filings by companies in this industry. This Note also provides direct links to risk factor disclosure in Form 10-K filings by companies in this industry. This resource is updated periodically to reflect new SEC filings. 

This Note identifies key issues and considerations for each phase of an M&A transaction in the highly regulated investment management and securities industry.

A standard form of a confidentiality agreement to be used in connection with a loan transaction. This agreement includes exceptions to confidentiality and remedies for breach of the confidentiality provisions. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.

This is a standard form of pledge agreement to be used in connection with a syndicated loan agreement. It is intended to create a security interest over equity interests and promissory notes owned by the grantors. The grantors are usually the borrower, its parent and its subsidiaries. The grantors typically enter into the pledge agreement with a collateral agent, which is acting on behalf of lenders under a syndicated loan agreement. This form can also be used for one lender. This Standard Document has integrated notes with important explanations and drafting and negotiating tips.

This is a standard form of term sheet for syndicated senior secured credit facilities (including a revolving credit loan and term loans). This Standard Document has integrated notes with important explanations and drafting and negotiating tips.

A Standard Clause for loan agreements whereby the borrower grants the agent banks, lenders and their affiliates the right to set-off deposits and other obligations owed to the borrower upon an event of default under the loan agreement. The Standard Clause has integrated notes with important explanations and drafting and negotiating tips.

This Morrison and Foerster LLP Law Firm Publication discusses a final rule published by the CFPB subjecting "larger participants" in consumer reporting markets to the supervisory authority of the CFPB. The term "larger participants" is defined in terms of the combined annual receipts of the participant and any affiliate of the participant resulting from consumer reporting. The CFPB defined the term "consumer reporting" broadly, since they are not limited to supervising the person with respect to laws specific to credit reporting. Once a person is determined to be a larger participant regarding any of its consumer financial products, the CFPB's supervisory authority will extend to all of its consumer financial products.

This Wiley Rein LLP memorandum discusses the CFPB's decision to launch an inquiry into the effectiveness of arbitration clauses in protecting consumer rights. Section 1028(a) of the Dodd-Frank Act requires the CFPB to conduct a study of and provide a report to Congress concerning the use of pre-dispute arbitration agreements between covered persons and consumers in connection with the provision of consumer financial products or services. Both the study itself and any subsequent rulemaking proceeding could affect a broad range of businesses - any provider of "consumer financial products or services" under the Act.

This Article considers how proposed rules implementing the Volcker Rule would affect the worldwide operations of foreign banking organizations with a branch or agency in the US.

This resource summarizes the regulatory, legal and market developments in the area of securitization and ABS for 2011. The Note covers important securitization cases such as In re Zais, Innkeepers, General Growth Properties (GGP), First Millennium, Lehman v. BNY (Perpetual) and Ballyrock. The Note includes details of recent market activity in the CMBS and CLO markets, among others. The Note also examines proposed Dodd-Frank ABS risk retention (skin in the game), as well as relevant European ABS risk retention rules, the SEC's revised ABS shelf eligibility proposal (Reg AB II), the FDIC's bank securitization safe harbor rules and more. Note that as of November 30, 2011, this resource is no longer maintained. For more up-to-date information on many of the issues discussed in this Article, see Practice Note, Current Developments in Securitization: Overview.

This Dechert LLP memorandum analyzes a recent court decision in Weiner v. Eaton Vance Distributors Inc., in which the plaintiff sued mutual fund distributors and trustees for the alleged failure of broker-dealers that recieved Rule 12b-1 Fees to register under the Investment Advisers Act.  The plaintiff also claimed that the failure violated Section 47(b) of the Investment Company Act.

This Dechert LLP memorandum discusses the CFTC's proposed rules for commodity pool operators and commodity trading advisors.  The proposed regulations would expand compliance obligations for certain commodity market participants and eliminate certain exemptions and exceptions used by sponsors of private investment funds and registered investment companies (or RICs).

This Dechert LLP memorandum discusses recent statements by the FDIC about a company's obligation to draft a plan for a rapid and orderly resolution in the event of its material financial distress, often referred to as a “living will.” This obligation is imposed on large bank holding companies and designated nonfinancial companies (together, systemically important financial companies or SIFIs) by the Dodd-Frank Act.

This Cahill Gordon & Reindel LLP memorandum discussed the FASB decision to delay further discussion and decision on their proposed Accounting Standards Update (ASU) on Disclosure of Certain Loss Contingencies.

This Cahill Gordon & Reindel LLP memorandum discusses the FASB postponing the effective date for the proposed Accounting Standards Update (ASU), Disclosure of Certain Loss Contingencies.  The FASB did not specify a new effective date for the ASU.

This Skadden, Arps, Slate, Meagher & Flom LLP memorandum discusses the court's decision in In re Charles Schwab Corp. Securities Litigation, which held that the fund managers and promoter for a registered fund violated Section 13(a)(3) of the Investment Company Act by changing the fund's concentration policy.

This Cahill Gordon & Reindel LLP memorandum discusses the FASB's Proposed Accounting Standards Update - Disclosure of Certain Loss Contingencies.  With this proposal, FASB intends to expand the loss contingencies that must be disclosed to include certain remote loss contingencies.

This Dechert LLP memorandum discusses EU and US proposals on investment manager remuneration. The EU proposal includes bonus restrictions for the financial industry and would go into effect in 2011. The US proposals, created under the Dodd-Frank Act, require US regulators to create rules for disclosure of compensation structures by major investment firms and prohibit bonus arrangements found to encourage inappropriate risk.

This Simpson Thacher & Bartlett LLP memorandum discusses the SEC's rule addressing "pay to play" political contributions by investment advisers.

This Cleary Gottlieb Steen & Hamilton LLP memorandum discusses the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. The Act expands the definition of activities which may result in sanctions as well as the potential severity of those sanctions. The Act also imposes new sanctions, including sanctions targeting persons that export refined petroleum products to Iran or that otherwise support Iran’s capacity to maintain or expand its domestic production of refined petroleum.

This Dechert LLP memorandum discusses the SEC's amendments to the Investment Company Act rules for money market funds to strengthen risk-limiting conditions under Rule 2(a)-7, enhance portfolio information disclosure and improve fund operations.

This Dechert LLP memorandum discusses new guidance from FinCen, the Federal Reserve, the FDIC, the SEC and other agencies on obtaining beneficial ownership information for mutual funds, broker-dealers, and other financial institutions.

This Article explains the financial holding company structure, including a discussion of the permissible activities, regulatory scheme and benefits and limitations of a financial holding company.

The Financial Stability Board (FSB) has published a letter (dated 12 February 2013) sent to the G20 ahead of its meeting on 15 to 16 February 2013, reporting on the good progress being made in financial regulatory reforms.

The Financial Stability Board (FSB) has published a press release reporting on its meeting in Zürich on 28 January 2013.

The Federal Reserve Board issued a proposed rule that enhances regulation and supervision of US operations of foreign banks.

The US banking agencies have indefinitely delayed the implementation date for their proposed rules that would revise and replace the current regulatory capital rules.  Also, in a Senate hearing on November 14, agency representatives summarized key banking industry concerns over the proposed rules.

The Financial Stability Board (FSB) has published a letter from its Chair to the G20 finance ministers and central bank governors reporting on progress made in the financial regulatory reform programme.

Key financial industry trade groups issued a comment letter to the federal bank regulatory agencies criticizing the recently released Basel III regulatory capital framework and the proposals to implement it.

The federal bank regulatory agencies released final rules that require banking organizations to conduct annual capital adequacy stress tests to assess the potential impact of various hypothetical economic conditions on its capital, consolidated earnings and losses over a set period.

The Bank for International Settlements (BIS) has published "level 2" reports issued by the Basel Committee on Banking Supervision (BCBS) assessing the regulatory consistency of the implementation of Basel III in the EU, the US and Japan.

The American Bankers Association (ABA) issued a guide to help community bankers evaluate the impact of Basel III on their institutions.

The FDIC released the public section of the first wave of banks filing their resolution plans with the FDIC and the Federal Reserve Board, as required by Title I of the Dodd-Frank Act.

The Basel Committee on Banking Supervision (BCBS) has issued supervisory guidance on the internal audit function in banks.

Basel III may have a significant impact on commercial real estate and construction loans made by banks. 

The Basel Committee on Banking Supervision (BCBS) has published its final rules on disclosure requirements on the composition of capital.

The OCC finalized proposed rules and guidance, as required by the Dodd-Frank Act, to remove references to credit ratings from their regulations and to provide guidance to financial institutions on how to evaluate permissible securities investments in the absence of these ratings.

The Federal Reserve Board issued a final rule implementing changes to its market risk capital rules, requiring banking organizations with significant trading activities to adjust their capital requirements to better account for the market risks of those activities.

Acting FDIC Chairman Martin J. Gruenberg outlines resolution strategy for systemically significant financial institutions.

The Basel Committee on Banking Supervision (BCBS) has issued a consultation document on initial policy proposals to address shortcomings in the trading book capital requirements regime.

The FRB, CFTC, FDIC, OCC and SEC issued a joint release setting the Volcker Rule compliance date at July 21, 2014.

The Basel Committee on Banking Supervision has published a report summarising the aggregate results of the latest Basel III monitoring exercise, using data as of 30 June 2011.

The FDIC, OCC and FRB jointly issued proposed guidelines on leveraged lending, revising the agencies' leveraged finance guidelines issued in April 2001.

The FDIC issued guidelines for bank directors and officers on copying and removing bank and supervisory records for personal defense use in anticipation of a bank failure. In addition, a court in Georgia ruled that bank directors and officers are not subject to simple negligence claims by the FDIC where the directors and officers are protected by the state's business judgment rule.

The OCC and FDIC extended their comment periods for proposed rules under the Dodd-Frank Act that would require large national banks, state banks and thrifts to conduct annual capital adequacy stress tests.

In February 2012, ISDA published standard documents for credit derivatives, interest rate and currency derivatives, and FX and currency option transactions. It also issued two announcements relating to the actions of its determinations committees.

The US Government Accountability Office (GAO) issued a report, mandated by the Dodd-Frank Act, on the implications of removing exemptions from the Bank Holding Company Act (BHC Act) for companies that own certain types of banks.

The OCC proposed a rule under the Dodd-Frank Act that would require large national banks and thrifts to conduct annual capital adequacy stress tests.

The FDIC proposed a rule under the Dodd-Frank Act that would require certain large banks to conduct annual capital adequacy stress tests.

The Bank for International Settlements has published a press release announcing that, at a meeting on 8 January 2012, the Basel Committee on Banking Supervision's (BCBS) oversight body endorsed the BCBS' strategy for assessing implementation of the Basel regulatory framework and its proposals on the liquidity coverage ratio.

During December 2011, ISDA published standard documents for equity derivatives, commodity derivatives, interest rate and currency derivatives and credit support. It also issued two announcements by its EMEA Credit Derivatives Determinations Committee.

On December 19, 2011, the British government announced its intention to implement the banking law reforms proposed in the Vickers Report published earlier this year.

In November 2011, ISDA published proposed language to address the effects of the US Foreign Account Tax Compliance Act (FATCA) withholding tax on derivatives transactions.

On November 22, 2011, the Federal Reserve Board (FRB) issued a final rule requiring US bank holding companies (BHCs) with assets of at least $50 billion to submit annual capital plans for review. In addition, the FRB announced that it has launched its 2012 review of covered BHCs.

During October 2011, ISDA published standard documents for deliverable CNY (Chinese Yuan Renminbi, the currency of China) FX transactions, currency option transactions and swap transactions where a CNY Disruption Event renders CNY non-deliverable.

In August 2011, ISDA published an amendment to Annex A to the 1998 Foreign Exchange and Currency Option Definitions. It also published an announcement by its EMEA Credit Derivatives Determinations Committee.

In June 2011, ISDA published documents relating to cleared swaps, cross currency FX transactions and interest rate and currency derivatives. It also published an announcement by its EMEA Credit Derivatives Determinations Committee.

During May 2011, ISDA published an amendment to Annex A to the 1998 Foreign Exchange and Currency Option Definitions.

ISDA published standard documents in March 2011 relating to credit derivatives, FX derivatives and credit support.

ISDA published standard documents in February 2011 relating to credit derivatives and equity derivatives.

ISDA published various standard documents of general application in January 2011.

An update on the introduction of a bill in New York to create an alternative market for sukuk bonds.

An update on the SEC and the CFTC issuing joint proposed rules to require certain investment advisers to report information to the SEC using a new reporting form (Form PF) and for certain commodity pool advisers and commodity trading advisers registered with both the SEC and CFTC to satisfy certain CFTC filing requirements.

An update on the SEC submitting a study to Congress recommending that the SEC establish a uniform fiduciary standard for investment advisers and broker-dealers when providing investment advice about securities to retail customers.

An update on the FSOC's approval of a study and recommendations on implementing the Volcker Rule under the Dodd-Frank Act.

An update on the SEC's approval of two final ABS rules, issued under the Dodd-Frank Act, which mandate certain disclosure requirements and issuer reviews of underlying assets.

An update on new S&P criteria for assessing swap counterparty and other support in structured finance transactions.

An update on the publication of new bank capital requirements designed to raise the quality of bank regulatory capital holdings.

ISDA published various standard documents of general application in December 2010.

An update on CFTC-proposed risk management and operational rules for derivatives clearing organizations (DCOs) under the Dodd-Frank Act.

An update on the CFTC's proposed rules under the Dodd-Frank Act regarding certain post-transaction processing requirements for swap dealers and major swap participants, including standards for swap confirmation, portfolio reconciliation and portfolio compression.

An update on a proposed rule by the SEC on clearinghouse approval of security-based swaps for mandatory clearing and certain reporting requirements for systemically important security-based swap clearinghouses under the Dodd-Frank Act.

The Bank for International Settlements has published a final report on assessing the macroeconomic impact of the transition to stronger capital and liquidity requirements.

The Basel Committee on Banking Supervision has published the text of the main Basel III reforms to the Basel II framework for capital requirements, together with the results of its Basel III quantitative impact study (QIS).

An update on rules, proposed for comments on December 15, 2010, by the federal banking agencies on market risk capital requirements and on the establishment of a risk-based capital floor as part of the implementation of Section 171 of the Dodd-Frank Act (Collins Amendment).

An update on the exemption from the Dodd-Frank Act's mandatory swap-clearing requirement proposed by the CFTC for end users using non-security-based swaps to hedge or mitigate commercial risk.

An update on a CFTC interim final rule advising counterparties of the obligation to preserve certain data relating to swap transactions entered into on or after the date of enactment of the Dodd-Frank Act but before Dodd-Frank swap-data reporting rules take effect.

An update on the CFTC's proposed rules governing derivatives clearing organization under the Dodd-Frank Act.

An update on a new rule proposed by the CFTC covering core principles and requirements for designated contract markets under the Dodd-Frank Act.

An update on a new CFTC proposed rule under the Dodd-Frank Act setting forth reporting, recordkeeping, public-information and information-sharing requirements for derivatives clearing organizations.

An update on a rule change from FINRA to extend pilot program that set margin requirements for credit default swaps (CDS).

An update on the publication of the 2010 Short Form HIRE Act Protocol by ISDA, superseding its August 23, 2010 HIRE Act Protocol.

An update on proposed CFTC rules under the Dodd-Frank Act that would implement a new section of the Commodities Exchange Act covering whistleblowers.

An update on two FDIC proposed rules that would amend the deposit insurance assessment regulations and a final rule implementing the Dodd-Frank Act section providing temporary unlimited coverage for noninterest-bearing transaction accounts at all FDIC-insured depository institutions.

An update on the release of two exposure drafts by the Islamic Financial Services Board (IFSB) dealing with the IFSB Capital Adequacy Standard and the recognition of ratings by external credit assessment institutions on takaful and retakaful undertakings.

An update on a notice of proposed rulemaking issued by the CFTC that would prohibit market manipulation in connection with non-security-based swaps and sales of commodities under the Dodd-Frank Act.

An update on a proposed rule on the review of non-security-based swaps by the CFTC to determine whether they must be cleared.

An update on the CFTC's proposed changes, mandated by the Dodd-Frank Act, to rules regarding the investment of segregated customer funds and funds held in accounts for foreign futures and options contracts.

An update on the new effective date for ABS TRACE reporting: May 16, 2011.

An update on the possible exemption of foreign exchange swaps, foreign exchange forwards, or both, from swaps regulation under Dodd-Frank.

An update on the creation of the International Islamic Liquidity Management Corporation (IILM).

The Financial Stability Board has published a press release about its meeting on financial reform ahead of the G20 leaders' summit in Seoul.

An update on the SEC's proposed rules under the Dodd-Frank Act proscribing ownership, voting and governance requirements for security-based swap clearing agencies, national securities exchanges and execution facilities.

An update on FASB's Exposure Draft of Clarifications to Accounting for Troubled Debt Restructurings by Creditors.

An update on the FDIC's proposed rule clarifying how the agency would treat certain creditor claims under the new orderly liquidation authority established for certain covered financial companies by the Dodd-Frank Act.

An update on a proposed rule by the SEC under the Dodd-Frank Act relating to issuer and third-party review of assets backing asset-backed securities transactions, and related disclosure requirements.

An update on the CFTC's interim final rule under the Dodd-Frank Act requiring data retention and reporting for unexpired swaps entered into before July 21, 2010.

An update on CFTC Chairman Gary Gensler's and SEC Chairman Mary Schapiro's statements regarding the forthcoming derivatives regulation under the Dodd-Frank Act.

An update on the FDIC's final safe harbor rule for treatment of the securitized assets of a bank in FDIC receivership.

An update on the SEC's release of a timetable for implementing the Dodd-Frank Act.

An update on the September 12, 2010 announcement by the Bank for International Settlements that the Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, has agreed to a substantial strengthening of bank capital requirements (known as Basel III).

An update on the Seventh Circuit's decision in Paloian v. LaSalle Bank, N.A., holding that a bankruptcy estate could recover funds in a fraudulent conveyance action from a bank acting as securitization trustee.

An update on standard documents of general application published by ISDA in August 2010.

An update on the impact of the recent surge in high-yield bond issuances on the loan market, including the effects on collateralized loan obligation (CLO) funds, the availability of second lien loans, amend & extend amendments and loan maturity dates.

An update on the publication of the 2010 Hire Act Protocol by the International Swaps and Derivatives Association (ISDA).

An update on the SEC and CFTC solicitation of public comments and roundtable discussion on certain key terms under the Dodd-Frank Act related to swaps and derivatives.

An update on FASB's extension of the deadline for comments on its proposal to amend disclosure requirements relating to loss contingencies in a company's financial statements to September 20, 2010.

An update on the signing of a bill to clarify the reach of New York's power of attorney law.

An update on the introduction of Shariah-compliant contracts to Asia by Standard Chartered Bank from the UK.

An update on LSTA's white paper discussing the impact of the Dodd-Frank Act risk retention provisions on syndicated loans and collateralized debt obligations.

An update on an initiative to reform international company financial reporting standards.

An update on the US District Court for the Southern District of New York's Consent Order & Judgment in Empresas Cablevisión, S.A.B. de C.V. v. JPMorgan Chase Bank, N.A. permanently enjoining JPMorgan from transferring all or any part of its rights or obligations under a loan agreement to certain entities without Empresas Cablevisión's consent.

An update on the private equity group Apollo Management establishing a new bank and hoping to take advantage of the recently enacted financial reform legislation.

An update on the SEC's compliance and disclosure interpretations (C&DIs) providing guidance on the requirement to file consents when credit ratings are included in public offering documents after the repeal of Securities Act Rule 436(g).

An update on a white paper issued by ten law firms analyzing the appropriate use of credit ratings in registered offerings of debt or preferred securities following the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010's repeal of Securities Act Rule 436(g).

An update on the New York County Supreme Court decision in Harbinger Capital Partners Master Fund I, Ltd. v. Wachovia Capital Markets, LLC, where the Court declined to dismiss a group of lenders' fraud claim against the arranger of a syndicated loan, despite the existence of an exculpatory clause in the loan agreement.

An update on the SEC creating three new offices to oversee large financial institutions, asset-backed securities and other structured finance products, as well as new financial products and capital market trends.

An update on the Dodd-Frank Wall Street Reform and Consumer Protection Act.

An update on the agreement between the FDIC, the Federal Reserve Board and the Treasury Department giving the FIDC expanded authority to investigate banks.

An update on the Delaware Court of Chancery's decision in Concord Real Estate CDO 2006-1, et al. v. Bank of America in which the Court permitted collaterialized debt obligation sponsors to voluntarily cancel certain notes to circumvent a par coverage test because the terms of the indenture did not expressly prohibit the cancellation.

An update on ISDA publishing guidance on current best practices for the collateral management process.

An update on the Dodd-Frank Wall Street Reform and Consumer Protection Act.

An update on the New York Court of Appeals decision in DDJ Management, LLC v. Rhone Group LLC holding that lenders may reasonably rely on a borrower's representations and warranties about the accuracy of  its unaudited financial statements.

An update on the New York Appellate Court decision in D.B. Zwirn Special Opportunities Fund, L.P. v. SCC Acquisitions, Inc., holding that a poor financial statement alone does not constitute an admission of insolvency for the purposes of triggering a guarantor's obligations under a guaranty.

An update on banks offering investors better terms for new deals.

An update on the tax treaty between UBS and the Swiss government dealing with the release of client data.

An update on an anticipated increase in the demand for mezzanine debt.

An update on the Second Circuit Court of Appeals decision in The Bank of New York v. First Millennium, Inc., holding that investors in certain asset-backed securities have full recourse to funds retained by the issuer for the benefit of the originator when defaults on the underlying assets had exhausted the collateral.

An update on the 2010 ISDA Operations Benchmarking Survey.

An update on the new SEC rules designed to encourage unsolicited ratings of certain asset-backed securities (ABS).

An update on the US District Court's decision to let BNY Corporate Trustee Services Ltd. appeal the bankruptcy court ruling in "flip clause" case.