On April 3, 2018, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued long-awaited frequently asked questions (“FAQs”) regarding its new customer due diligence requirements (“CDD Rule”) that become effective on May 11, 2018.1 As a reminder, on May 11, 2018, the CDD Rule will require covered financial institutions (1) to establish procedures to identify and verify the identity of the beneficial owners of legal entity customers that open new accounts unless an exception applies and (2) ensure their anti-money laundering (“AML”) compliance programs include appropriate risk-based procedures for ongoing CDD efforts, including developing customer risk profiles and periodically … Read more
On Tuesday, October 31, the U.S. Departments of State and Treasury issued new guidance the Countering America’s Adversaries Through Sanctions Act (“CAATSA”) relating to sanctions against Russia. This is in addition to guidance that the State Department previously issued on CAATSA Section 231.
Amendments to Directive 4
Section 223(d) of CAATSA directed the Treasury Department to expand the scope of Directive 4 of the Sectoral Sanctions Identifications (“SSI”) List, which governs the provision of goods and services by U.S. persons to certain types of oil projects. The new restrictions are effective January 29, 2018.
Currently, the restrictions apply only to … Read more
Many expect Donald Trump’s inauguration as U.S. president and Republican majorities in both houses of the U.S. Congress will result in a revised financial regulatory framework. Preliminary indications from the Trump transition team have signaled substantial changes may be in the offing, although the exact contours of these changes remain unclear. In this Client Update, we review the potential financial regulatory changes that may take place in the legislative, regulatory and international areas. We focus on issues relevant for the banking industry, capital markets and Securities and Exchange Commission (“SEC”) enforcement.
We will continue to monitor developments in these areas … Read more
The New York State Department of Financial Services (the “Department”) issued a guidance memorandum on October 11 requiring regulated New York-chartered banking institutions to align their incentive compensation practices with the general principles laid out in the Interagency Guidance on Sound Incentive Compensation Policies issued in 2010 (the “2010 Interagency Guidance”). Specifically, the Department’s guidance requires that incentive compensation arrangements, at a minimum, (1) appropriately balance risk and rewards, (2) be compatible with effective controls and risk management, and (3) be supported by effective corporate governance. The Department published this guidance on the heels of the record $100 … Read more
The following is based on a memo from Debevoise & Plimpton, published on November 1, 2013, which is available here. The original memo contains a useful graphic representation of the LCR equation which has been omitted from this post.
On October 24, the Federal Reserve, followed on October 30 by the Federal Deposit Insurance Corporation (the “FDIC”) and the Office of the Comptroller of the Currency (the “OCC”) (collectively, the “Agencies”), released a proposed rule (the “Proposed Rule”) that would apply a Liquidity Coverage Ratio (the “LCR”) to certain
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). The second concerns new broker-dealer notification and audit requirements with respect to custody activities. 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