Commentaries

Bridging the Week by Gary DeWaal: April 18 - 22 and 25, 2016 (SEF Claims Foul; Compensation Deferrals and Claw-Backs; Financial Stability)

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Published Date: April 24, 2016

A swap execution facility sued multiple interest rate swap dealers and other entities claiming they colluded to prevent its success. In addition, six federal agencies proposed compensation rules that might result in more of the largest financial institutions’ senior officers’ (including, potentially, chief compliance and chief legal officers’) and substantial risk takers’ incentive bonuses being subject to deferral for four years, as well as previously paid bonuses being subject to claw-back for up to seven years. As a result, the following matters are covered in this week’s edition of Bridging the Week:

Video Version:

Article Version:

Briefly:

And more briefly:

For more information, see:

Deferrals and Claw-Backs Potentially Required in Newly Proposed Compensation Arrangements for Senior Officers of Certain Financial Institutions:
https://www.ncua.gov/About/Documents/Agenda%20Items/AG20160421Item2b.pdf

ESMA Adds Certain Credit Derivatives to List of Swaps That Must Be Centrally Cleared:
https://www.esma.europa.eu/press-news/esma-news/esma-adds-credit-derivatives-its-public-register-emir

FSOC Expresses Concerns That Pooled Investment Vehicles’ Liquidity and Redemption Risks May Pose Financial Stability Concerns:
https://www.treasury.gov/initiatives/fsoc/news/Documents/FSOC%20Update%20on%20Review%20of%20Asset%20Management%20Products%20and%20Activities.pdf

See also:
Statement of Timothy Massad:
http://www.cftc.gov/PressRoom/SpeechesTestimony/massadstatement041816
Statement of Mary Jo White:
https://www.sec.gov/news/statement/white-statement-041816.html

Futures Exchanges Conform Rules to Latest CFTC OCR No Action Relief:

CFE:
http://cfe.cboe.com/framed/PDFframed.aspx?content=/publish/CFEregcirc/CFERG16-009.pdf&section=SEC_ABOUT_CFE&title=CFERG16-009+Ownership+and+Control+Reporting+Implementation+-+Updated
CME:
http://www.cmegroup.com/market-regulation/files/16-160_1.pdf

Related Broker-Dealers Agree to Pay US $1 Million Penalty to FINRA for Allegedly Not Sending Certain Required Information to Private Bank Clients:
/ckfinder/userfiles/files/FINRA%20JPMorgan.pdf

SEC Claims Broker-Dealer’s Attempt to Escape FINRA Disciplinary Action is Untimely:
/ckfinder/userfiles/files/SEC%20FINRA%20Scottsdale.pdf

Swap Execution Facility Alleges in Lawsuit That Banks Conspired to Prevent Its Success:
/ckfinder/userfiles/files/Tera%20Exchange.pdf

The information in this article is for informational purposes only and is derived from sources believed to be reliable as of April 23, 2016. No representation or warranty is made regarding the accuracy of any statement or information in this article. Also, the information in this article is not intended as a substitute for legal counsel, and is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. The impact of the law for any particular situation depends on a variety of factors; therefore, readers of this article should not act upon any information in the article without seeking professional legal counsel. Katten Muchin Rosenman LLP may represent one or more entities mentioned in this article. Quotations attributable to speeches are from published remarks and may not reflect statements actually made.

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ABOUT GARY DEWAAL

Gary DeWaal

Gary DeWaal is currently Special Counsel with Katten Muchin Rosenman LLP in its New York office focusing on financial services regulatory matters. He provides advisory services and assists with investigations and litigation.


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