Debevoise & Plimpton Discusses OCC and CFPB’s Approaches to FinTech

This is the fourth in a series examining the increased regulatory scrutiny on new and innovative financial technologies (“FinTech”).[1]

This update considers the initiatives of two federal regulatory agencies—the Office of the Comptroller of the Currency (the “OCC”) and the Consumer Financial Protection Bureau (the “CFPB” or “Bureau”)—and their approaches to balancing regulation with FinTech innovation.[2] In examining these two models, we first discuss the OCC’s recent issuance of a framework regarding responsible innovation and the establishment of an office to implement the framework. Then, we discuss the CFPB’s Project Catalyst, and its recent report on its efforts … Read more

Debevoise & Plimpton Discusses Regulatory Developments in FinTech

In this update, we review a number of recent regulatory developments that may impact firms engaged in the industry of new and innovative financial technology (“FinTech”). First, we discuss the Federal Deposit Insurance Corporation’s (“FDIC”) new guidance on examining third-party lenders, including the risks and potential takeaways for parties to marketplace lending (“MPL”) arrangements. Second, we examine the Office of the Comptroller of the Currency’s (“OCC”) recent proposed rule outlining a receivership framework for non-FDIC insured national banks, focusing particular attention on the implications for FinTech firms. We conclude with takeaways for MPL and FinTech firms to consider as they … Read more

Debevoise & Plimpton discusses SEC’s Guidance on Supervisory Liability for a Broker-Dealer’s Compliance and Legal Personnel

On September 30, the staff of the Securities and Exchange Commission’s (the “SEC”) Division of Trading and Markets addressed an issue of great interest to the compliance and legal community concerning the circumstances under which the compliance and legal staffs of broker-dealers may be viewed as “supervisors” and thus face liability under the securities laws for failing to supervise firm employees.[1] The guidance, which appears in the form of responses to frequently asked questions (the “FAQs”), seems to confirm the industry’s long-held view that supervisory liability does not attach unless a compliance or legal employee truly functions in a supervisory

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Debevoise discusses SEC Amendments to Financial Responsibility and Custody Rules

On July 30, the Securities and Exchange Commission (the “SEC”) adopted new rules with respect to broker-dealer financial responsibility and custody. The rules came in two separate rulemakings. The first concerns amendments to SEC Rules 15c3-1 and 15c3-3 (and related “books and records” and notification rules).[1] The second concerns new broker-dealer notification and audit requirements with respect to custody activities.[2]  In summary, the new rules and amendments:

  • Amend Rule 15c3-1 to, inter alia, clarify the regulatory capital treatment of (i) liabilities assumed by third parties, (ii) capital infusions that are, or are permitted to be, withdrawn within one year of

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