Goodwin Procter discusses Basel Committee and IOSCO Publication of Policy Framework Establishing Minimum Standards for Margin Requirements for Non-Centrally Cleared Derivatives

The Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) jointly issued a final policy framework (the “Policy Framework”) establishing minimum standards for margin requirements for non-centrally cleared derivatives. The Policy Framework is a result of a 2011 G20 agreement calling upon BCBS and IOSCO to develop, for consultation, global standards for margin requirements for non-centrally cleared derivatives; BCBS and IOSCO released two consultative versions prior to releasing the current final version of the Policy Framework.

The Policy Framework requires the exchange of both initial and variation margin between so-called “covered entities” that engage in … Read more

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Editor's Tweet: Goodwin Procter discusses new Basel Committee and IOSCO Publication of Policy Framework on swaps

Sullivan & Cromwell discusses Shuanghui International’s CFIUS Clearance for its Purchase of Smithfield Foods

Shuanghui International Holdings Limited (“Shuanghui”) and Smithfield Foods, Inc. (“Smithfield”) announced on Friday that the companies have received notice from the Committee on Foreign Investment in the United States (“CFIUS”) that its national security review of the proposed acquisition by Shuanghui of Smithfield is complete. Although the CFIUS process has concluded, the acquisition, which would be the largest acquisition of a U.S. company by a Chinese investor to date, remains subject to other conditions to closing, including the approval of Smithfield shareholders.

Shuanghui, a Hong Kong-based company that owns a variety of businesses in the food and logistics sectors, including

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Gibson Dunn on Recent developments and trends in corporate governance and executive remuneration in the U.K.

The following post is based on a recent Gibson Dunn memo, available here, that was originally published on August 27, 2013.

This post provides a brief summary of a number of recent developments and trends in corporate governance and executive remuneration in the UK, including changes resulting from EU regulation or guidance.  It also covers recent EU and UK-specific initiatives to increase board diversity.

Part A: UK Corporate Governance Updates

Updates to the UK Corporate Governance Code

The UK Corporate Governance Code (the “Governance Code”), which applies to UK Premium-listed companies (but not Standard-listed or AIM companies), was updated

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Editor's Tweet: Gibson Dunn on recent developments and trends in corporate governance and executive remuneration in the U.K.

Pepper Hamilton on the Relationship Between New Rule 506(c), Regulation S and AIFMD

Beyond the general aspects of the U.S. Securities and Exchange Commission (SEC)’s new JOBS Act rules previously discussed in this series of articles, issuers who rely on new Rule 506(c) for an onshore offering and Regulation S and foreign private placement rules for a simultaneous offshore offering need to consider the impact of solicitation and advertising activities on the Regulation S exemption and on the private placement exemption under pertinent foreign rules.

Regulation S under the Securities Act of 1933 (the Securities Act) establishes an exemption from U.S. securities registration for certain offerings targeting non-U.S. investors. It provides an exemption … Read more

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Reed Smith discusses CFTC’s Final ‘Harmonization’ Rules

The Commodity Futures Trading Commission (CFTC) caused quite a stir in 2012 when it changed its rules to require investment advisers to mutual funds that invest to any significant degree in derivatives, to register as “Commodity Pool Operators” (CPOs). The CFTC’s actions drew the ire of the mutual fund industry to such an extent that industry groups challenged the rules in court.

Notwithstanding widespread industry opposition, the CFTC stuck to its guns, perceiving a need to regulate mutual funds employing increasingly complex derivatives strategies. At the same time, the CFTC recognized that the application of its rules could create overlapping … Read more

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Editor's Tweet: Reed Smith discusses CFTC’s Final 'Harmonization' Rules http://wp.me/p2Xx5U-1la

Cadwalader on ESMA’s Consultation Paper on the Extra-Territorial Application of EMIR

The following comes to us from special counsel Assia Damianova and partner Nick Shiren of Cadwalader, Wickersham & Taft LLP in London.

On 17 July 2013, the European Securities and Markets Authority (“ESMA”) published a consultation paper (the “Consultation Paper”)1 on draft regulatory technical standards (“RTS”) aimed at implementing certain provisions of the European Markets Infrastructure Regulation2 (“EMIR”) relating to (a) the extraterritorial application of EMIR, and (b) preventing the evasion of EMIR’s provisions.

Background

EMIR was adopted on 4 July 2012 and entered into force on 16 August 2012. EMIR introduces provisions to improve transparency, establish common rules for … Read more

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Editor's Tweet: Cadwalader on ESMA's Consultation Paper on the Extra-Territorial Application of EMIR http://wp.me/p2Xx5U-1jF

Judge Rakoff Allows FIRREA Claims Where Bank’s Misconduct ‘Affects’ Itself

Charles Michael is a partner at Brune & Richard LLP in New York and is the editor of the SDNY Blog, available here.

In an opinion Monday, Judge Jed Rakoff of the U.S. District Court for the Southern District of New York became the second federal judge to endorse a broad interpretation of the Financial Institutional Reform, Recovery, and Enforcement Act (“FIRREA”) that will make it easier for the federal government to pursue bank misconduct.

FIRREA was adopted in the wake of the savings and loan scandals of the late 1980s, and allows the federal government to pursue … Read more

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Federal District Court Expresses Skepticism That Dodd-Frank Extraterritorial Jurisdiction Provision Overturns Morrison in Government Enforcement Actions

Federal District Court Expresses Skepticism That Dodd-Frank Extraterritorial
Jurisdiction Provision Overturns Morrison in Government Enforcement Actions

In a memo we wrote on the day the Dodd-Frank Act was signed into law, we discussed a provision in that law seemingly intended to render the Supreme Court’s decision in Morrison v. National Australia Bank inapplicable to cases brought by the SEC or the Justice Department. We noted that this “extraterritorial jurisdiction” provision, Section 929P(b), contains a significant drafting error, one that likely makes it a practical nullity. Since then, much academic commentary has concurred in our view. Last week, a federal … Read more

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Editor's Tweet: Wachtell's George Conway on District Court Skepticism That Dodd-Frank Extraterritorial Jurisdiction Provision Overturns Morrison

Akin Gump Discusses Changes to Rules on the Private Placement of Investment Funds in Europe

On July 22, 2013, the Alternative Investment Fund Managers Directive (“AIFMD”) is due to be implemented in every member state in the European Union.  One of the most immediate areas where the AIFMD will have an impact on the activities of U.S. asset managers is through the changes that the AIFMD applies to private placement rules throughout the European Union.

In this alert, we answer some key questions that will help U.S. asset managers prepare for the changes in regulation, which are imminent.

Nothing is changing, right?

Unfortunately not. The AIFMD mandates that each European Union member state makes changes … Read more

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Davis Polk on CFTC Finalization of Cross-Border Swaps Guidance and Establishment of Phase-in Compliance Schedule

On July 12, 2013, the CFTC adopted long-anticipated final cross-border guidance (the “Final Guidance”) that provides guidelines for the application of the CFTC’s swap regulatory regime to cross-border swap activities. At the same time, the CFTC adopted a phase-in compliance schedule (the “Exemptive Order”)[1] that extends, with material changes, the cross-border exemptive order issued by the CFTC in January 2013 (the “January Order”).[2]

The Final Guidance and the Exemptive Order address several important topics, including:

  • the final definition of U.S. person for purposes of the CFTC’s swap regulatory regime;
  • guidance on which swaps a non-U.S. person must include in, and

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The Marketplace of Ideas: Concluding Remarks on the Legal Theory of Finance (LTF)

The CLS Blue Sky Blog presents the final part of the second installment of our new series, entitled “The Marketplace of Ideas.”  Parts I, II,  III, and IV can be found hereherehere, and here.  Earlier installments are available here.  The intent is to present different perspectives on the same subject by two or more authors.

The subject is Professor Katharina Pistor’s Legal Theory of Finance (LTF).  For a short description of her theory and the format of the commentary we are releasing, please see here.  In the final release,  LTF – The Read more

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Editor's Tweet: The Marketplace of Ideas: Concluding Remarks on the Legal Theory of Finance (LTF)

LTF – The Work Ahead

Discussing the Legal Theory of Finance (LTF) on the Marketplace of Ideas has been a great experience. I want to thank my colleague Kathryn Judge for coming up with the idea and for writing an inspiring blog post that raises important questions about the content and boundaries of the theory’s core features. The response to the call for blog posts from practitioners and academics was equally uplifting – and I am extremely grateful to the contributors for their engagement with LTF and the critiques they offered. Thanks also to Jason Parsont who manages the CLS Blue Sky Blog and kept … Read more

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Editor's Tweet: Katharina Pistor delivers closing remarks on the Marketplace of Idea Installment on LTF

The Marketplace of Ideas: Bruno Salama, Osny da Silva Filho, and Richard Shamos on Pistor’s Legal Theory of Finance

The CLS Blue Sky Blog presents Part IV of the second installment of our new series, entitled “The Marketplace of Ideas.”  Parts I, II, and III can be found here,  here, and here.  Earlier installments are available here.  The intent is to present different perspectives on the same subject by two or more authors.

The subject is Professor Katharina Pistor’s Legal Theory of Finance (LTF).  For a short description of her theory and the format of the commentary we are releasing, please see here.

Our sixth and seventh releases come to us from Professor Bruno Read more

Elasticity, Incompleteness, and Constitutive Rules

In A legal theory of finance, Katharina Pistor outlines a theory designed to deal with the law-finance paradox, that is, the observation that when “the full force of law is relaxed or suspended to take account of changes in circumstances” – precisely to avoid bringing down the financial system –, “the credibility law lends to finance in the first place is undermined” (Pistor, 2013: 323). In building her argument, Pistor advances the concept of law’s elasticity, which she defines as “the probability that ex ante legal commitments will be relaxed or suspended in the future” (2013: 320). The … Read more

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Editor's Tweet: Bruno Meyerhof Salama and Osny da Silva Filho on Elasticity, Incompleteness, and Constitutive Rules

Free Markets and the Legal Theory of Finance

Richard Shamos is an Associate in the Investment Management practice at Schulte Roth & Zabel LLP in New York.

The relationship between free markets and government is perhaps one of the most prominent economic issues of modern political economy.  In A Legal Theory of Finance, Katharina Pistor presents a powerful tool for analyzing this relationship by emphasizing the central role law plays in defining markets and market instruments.  This article examines Pistor’s mode of analysis and then explores how it may be applied within the investment fund context to draw on real world examples of the relationship between law … Read more

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Editor's Tweet: Richard Shamos of Schulte Roth discusses Free Markets and the Legal Theory of Finance

The Marketplace of Ideas: Professor Anna Gelpern and James P. Sweeney Weigh in on Pistor’s Legal Theory of Finance

The CLS Blue Sky Blog presents Part III of the second installment of our new series, entitled “The Marketplace of Ideas.”  Parts I and II can be found here and here.  Earlier installments are available here.  The intent is to present different perspectives on the same subject by two or more authors.

The subject is Professor Katharina Pistor’s Legal Theory of Finance (LTF).  For a short description of her theory and the format of the commentary we are releasing, please see here.

Our fourth and fifth releases comes to us from Professor Anna Gelpern of Georgetown Law … Read more

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Editor's Tweet: The Marketplace of Ideas: Professor Anna Gelpern and James P. Sweeney Weigh in on Pistor's Legal Theory of Finance

Rules, Institutions, and the Legal Theory of Finance

The International Monetary Fund (IMF) recently published its first major policy treatment of sovereign debt restructuring since 2003. It was prompted by the flawed restructuring in Greece, high profile litigation against Argentina, and recurring crises in smaller economies that failed to deliver needed relief in a timely way. The paper proposes a work program to bolster the Fund’s analytical and policy tools, as well as contract reform to expand countries’ restructuring capacity.

Taking initiative on sovereign debt is a risky move for the Fund. Between 2001 and 2003, IMF staff designed and lobbied for a treaty-based Sovereign Read more

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Editor's Tweet: Prof. Anna Gelpern discusses Rules, Institutions, and the Legal Theory of Finance

Evaluating Dodd-Frank and International Approaches to Clearinghouses, Central Banks, and Swap Lines

On June 26, in a House Committee on Financial Services hearing, “Examining How the Dodd-Frank Act Could Result in More Taxpayer-Funded Bailouts,” former FDIC Chair Shelia Bair testified to being “surprised at the lack of concern over the designation of “financial market utilities,” and particularly Section 806 which permits the Federal Reserve to provide safety net access to designated financial market utilities.”

Indeed, these reforms in Dodd-Frank’s Title VIII have received little attention.  Related provisions in Dodd-Frank’s Title XI mandating disclosure of the use of the Federal Reserve’s currency swap line authority with nongovernmental third parties have similarly been largely … Read more

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Square Root Voting: A New Approach to Regulation of Chaebol, Keiretsu, and Other Conglomerate Organizations in Asia

The economies of several important Asian countries are dominated by large business groups. Many of them are family controlled, such as those in South Korea (known as “chaebol”), Israel and India. Others are not, the most notable example of which is the keiretsu of Japan. Whether family controlled or not, these business groups use highly complex webs of cross shareholdings and pyramidal structures to fend off hostile takeovers. Some American academics see them as an attractive model of corporate governance, but locals view them with concern. For example, the Korean families who control the chaebol through a tangled set of … Read more

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Editor's Tweet: Eric Posner and Others Discuss A New Approach to Regulation of Chaebol, Keiretsu, and Other Conglomerate Organizations in Asia

The Marketplace of Ideas: Cathy M. Kaplan and Jeremiah S. Pam Weigh in on Pistor’s Legal Theory of Finance

The CLS Blue Sky Blog presents Part II of the second installment of our new series, entitled “The Marketplace of Ideas.”  Part I can be found here.  Earlier installments are available here.  The intent is to present different perspectives on the same subject by two or more authors.

The subject is Professor Katharina Pistor’s Legal Theory of Finance (LTF).  For a short description of her theory and the format of the commentary we are releasing, please see here.

Our second and third releases comes to us from Cathy M. Kaplan of Sidley Austin and Jeremiah S. Pam … Read more

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