Legal/Regulatory Proposals Open For Comment
Last Update: September 12, 2008
This chart lists regulatory items that are currently open for comment and as to which SIFMA is considering or plans to file a comment letter. It is updated approximately once a month. The chart may not capture all matters as to which SIFMA files comment letters, and it does not reflect many other regulatory matters on which SIFMA is engaged apart from the notice and comment process.
Regulatory Proposal |
Regulator |
SIFMA Staff Contact Information |
SIFMA Committees and Divisions Involved |
Deadlines |
Extension of Optional Practical Training Visa Time Period Department of Homeland Security has published an interim final rule extending the Optional Practical Training ("OPT") visa time period from 12 months to 29 months but has limited the extension to students with STEM (Science, Technology, Engineering, and Math) degrees who are employed by businesses enrolled in the E-Verify program. SIFMA has been advocating for this extension as part of a broader visa reform effort seeking to facilitate movement and immigration of highly skilled workers. The rule has a 60 day comment period and SIFMA is planning to comment. Although SIFMA supports extension of the OPT time period, it may comment on two aspects of the anticipated proposal: (1) limiting the category of degree holders will limit the usefulness of the OPT extension for the securities industry; and (2) requiring participation in e-verify program is controversial because it is reportedly not very accurate since it is based on limited information. |
Department of Homeland Security |
Diana Preston |
International Committee |
Due Date: June 9, 2008 |
Regulations Pertaining to Mergers, Acquisitions, and Takeovers by Foreign Persons Department of the Treasury has published a proposed rule to implement amendments made by the Foreign Investment and National Security Act of 2007 (FINSA). The proposed regulations provide an update to regulations issued in 1991 that govern the Committee on Foreign Investment in the United States (CFIUS) and its process for national security review of certain foreign investments in U.S. businesses. SIFMA is reviewing the rule and expects to comment on the rule proposal. |
Department of the Treasury |
Diana Preston |
International Committee |
Due Date: June 9, 2008 |
Public Consultation on Possible changes to the Capital Requirements Directive |
EC |
Bertie Huet |
|
Due Date: June 16, 2008 |
Legislative Proposal on Possible changes to the EU Capital Requirements Directive(CRD) As part of its amendments to the CRD, the EC is proposing to introduce a requirement that investors in risk transfer products can only invest in such products if the originator retains at least 10% of the risk. Having strongly opposed such proposal, we are working with other industry bodies on developing alternatives. |
EU Commission |
Bertie Huet |
Government relations, various ESF committees |
Due Date: End August, 2008 |
Credit Rating Agency Task Force SIFMA has formed a global, investor-led task force to identify and examine key issues related to the credit ratings paradigm. The task force will explore the current credit rating agency model, including key issues such as transparency, credit rating agency performance and regulatory dependence on ratings. |
|
Jack Wiener |
|
Ongoing |
NYSE Rule 92 (1) SIFMA requested that NYSE make further clarifications re: its recent amendments to Rule 92, as well as extend the May 14, 2008 implementation deadline. NYSE just extended the deadline until March 2009 and will continue to work with firms on addressing interpretive and systems issues. |
NYSE and FINRA |
Ann Vlcek |
Equity Markets and Trading Comm.; Ad Hoc NYSE Rule 92/Manning Harmonization Working Group |
Due Date March 2009 |
European Parliament report on Hedge Funds and Private Equity The report calls for separate EU legislative initiatives structured around four separate themes: Financial Stability and Better Functioning Financial Markets Measures; Transparency Measures; Excessive Debt Measures; and Conflicts of Interest Measures |
European Parliament |
Bertie Huet |
Government Relations |
Due Date: EU Parliament vote expected Sept end 08 |
European Parliament report on the future structure of supervision In light of recent market events which raised concerns about Europe’s ability to effectively supervise cross-border banks in a crisis situation, the EU parliament has issued a Working Document to stimulate debate about the architecture of supervision in Europe, and proposing 5 options for consideration: (1) Improvements within the present fragmented structure based around the 3 Level 3 (3L3) committees (CESR – securities , CEBS- banking, CEIOPS – insurance); (2) Transforming the L3Committees into EU regulatory agencies; (3) EU System of supervisors with a two-tier supervisory system (a pan-EU structure for prudential supervision of the major cross-border financial groups, on top of but closely linked to the existing system of cooperating national supervisors); (4) Single EU Supervisor covering all financial services sectors (capital markets, securities, insurance and banking); (5) EU Financial Oversight Authority, as per the Supervisory Oversight Body being discussed in the US (main focus of this Oversight Authority would be to assess systemic risks for the stability of the EU economy) |
European Parliament |
Bertie Huet |
Government Relations |
|
Options Exchanges Working with options exchanges to create and unified quality of execution reporting standard. |
Options Exchanges |
Melissa MacGregor |
Options Committee |
Due Date: No Deadline |
Proposed Rule to Amend Certain NYSE Rules to Reduce Regulatory Duplication and Conflicting or Unnecessary Regulatory Burdens on Dual Members |
FINRA |
Amal Aly |
|
Due Date: Not yet published in the Federal Register |
Proposed Amendment to Securities Exchange Act Rule 15a-6 The SEC has published a proposal for comment that would amend Securities Exchange Act Rule 15a-6 to provide sophisticated investors with assets below $100 million with direct access to foreign broker-dealers. SIFMA has been advocating for the proposed amendments. Highlights from the proposal include move to qualified investor definition that lowers asset threshold to $25 million; elimination of “chaperone” requirement”; more flexible intermediation requirements for solicited transactions; and allowing trading in U.S. and non-U.S. securities. SIFMA’s cross-border working group under the International Committee is actively working on preparing comments and SIFMA is also working with other trade associations and interested parties to encourage additional supportive comments on the proposal. |
SEC |
Diana Preston Bertie Huet |
International Committee |
Due Date: Sept. 8, 2008 |
Mutual Recognition Anticipated that the SEC will soon announce agreement on the terms of its pilot program with the Australian Securities and Investment Commission to establish a substantive framework to enable broker-dealers and exchanges operating cross-border to rely on home country regulation rather than be subject to duplicative regulatory requirements. Discussions also underway regarding the procedural framework for pursuing mutual recognition with the European Commission and Canada. Both the Canadian and EC procedural frameworks have essentially been agreed upon but have not yet officially been announced. SIFMA is working in the United States and Europe to support the mutual recognition efforts and expects to comment on any substantive proposals that are announced. |
SEC |
Diana Preston Bertie Huet |
International Committee |
Due Date: No Deadline |
Regulatory Proposal SIFMA will be seeking exemptive relief from Treasury for SIFMA’s soon to be published “Buyin Procedures for Government Securities”, particularly the cash settlement feature of those procedures. |
Treasury |
Rob Toomey |
Government Division Executive Committee, Government Division Legal and Compliance Committee |
Due Date: No Deadline |
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NYSE proposes to amend Rule 343 to eliminate the requirement for Exchange approval of branch office space sharing arrangements but requires that reasonable steps be taken to ensure customers are clear as to the entity with which they are dealing
|
NYSE |
Amal Aly |
Self Regulation and Supervisory Practices Committee |
Not yet published in Federal Register |
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FINRA proposes to amend NASD Rules 1021 and 1031 to permit members to maintain the registrations of those persons whose association with such members is for bona fide business purposes, provided that such persons pass the appropriate, qualifying examination requirements, or a re granted an exemption from such requirements.
|
FINRA |
Amal Aly |
Self Regulation and Supervisory Practices Committee |
Not yet published in Federal Register |
Books and Records Relief for Subscription-Way Accounts A draft request for no-action relief from the books and records-keeping requirements of Rule 17a-3(a)17, as it relates to investments sold on a subscription-way basis, was submitted to the SEC Division of Market Regulation
|
SEC |
Rob Gannon |
Books and Records Working Group |
No Due Date |
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In Oct 07, the EC asked the EU asset-backed securities industry to come up with detailed proposals to improve transparency in the sector. On 2 July 08, ESF/SIFMA and a number of other industry bodies submitted “10 industry initiatives to increase transparency in the securitization market”, covering 3 areas: a) Industry good practice guidelines for the disclosure of securitization exposure under CRD (led by EBF and LIBA) b) new quarterly securitization data report (ESF/ SIFMA lead) and c) a number of initiatives to improve investor transparency (ESF/SIFMA lead). Focus now on implementation of the outstanding initiatives in c).
|
EC |
Rick Watson Marco Angheben +44 (0) 2077439335 |
Various representatives from all Committees |
Timeline: Due to hear from EC in early April 2008 |
Trade Reporting of Foreign Securities SIFMA is seeking exemptive language for class of transactions on an amendment to NASD Rule 6620 that purports to provide guidance concerning trade reporting obligations for transactions in foreign securities and American Depository Receipts. |
NASD |
Rob Toomey |
Interdealer Broker Advisory Committee |
No Due Date |
Nasdaq Sponsored Access Agreements, Direct Market Access and other Sponsored Access Issues SIFMA raised several concerns with Nasdaq’s recent proposal, prompting delays in its implementation (most recently until summer 2008). Discussions with Nasdaq are continuing on this particular proposal, and firms continue to monitor other industry efforts re: DMA and sponsored access issues.
|
Nasdaq |
Ann Vlcek |
Equity Markets and Trading Committee |
Due Date: No Deadline |
NYSE Program Trading changes SIFMA firms continue to work with NYSE on revising their program trading surveillance program to take into account today’s markets and trading strategies. Because considerable interp. and technical questions remain re: certain changes recently adopted by the NYSE in this regard, NYSE pushed back the implementation of these changes from June 2008 until early 2009. |
NYSE |
Ann Vlcek |
Equity Markets and Trading Committee |
No Due Date |
SIFMA member firms are working to identify and streamline their duplicative or unnecessary regulatory reporting requirements. Initial steps involve identifying all such requirements, and addressing easy regulatory changes that could be made sooner than later. Then, firms plan to work with the SROs and SEC to determine how best to streamline such requirements in a way that ensures adequate surveillance of trading activity but without unnecessary reporting burdens on firms. |
All SROs |
Ann Vlcek
|
Ad Hoc Regulatory Reporting Infrastructure Committee |
No Due Date |
Comment Letter on FINRA’s Discovery Guide The Litigation Advisory Committee is commenting on proposed amendments to FINRA’s Discovery Guide. |
FINRA |
Kevin Carroll |
Arbitration Committee |
Not yet published in the Federal Register |
Comment Letter on FAS 5 The Litigation Advisory Committee is commenting on proposed amendments to FAS 5 that would require far more onerous qualitative and quantitative disclosures about pending litigation in company financial statements. |
FASB |
Kevin Carroll |
Litigation Advisory Committee; Dealer Accounting Committee |
Due Date: Aug. 8, 2008 |
SEC Roundtable re Private Securities Litigation The SEC is expected to hold a roundtable in 1st quarter 2008 on the topic of shareholder litigation with a view towards recommending realistic alternatives and improvements to our current system. SIFMA’s objective is to ensure that our members and our views are fairly and adequately represented in these discussions, and that we help to shape the recommendations that flow from the roundtable discussions. |
SEC |
Kevin Carroll |
Litigation Advisory Committee; Arbitration Committee |
Due Date: To be determined |
H.R. 3010 / S. 1752 (Arbitration Fairness Act of 2007) These bills would effectively abolish pre-dispute arbitration agreements, undermine arbitration generally as a dispute resolution forum, and specifically undermine securities arbitration, which has a proven track record of outstanding service to investors. SIFMA’s objective is to defeat this legislation by, among other things: working closely with the Chamber’s arbitration coalition; offering witnesses and introducing documentary evidence at hearings on these bills; promoting favorable press coverage of securities arbitration; and countering negative publicity with current empirical evidence and historical fact that support securities arbitration. |
SEC/FINRA |
Kevin Carroll |
Arbitration Committee |
Ongoing |
EC regulation of Credit Rating Agencies (CRAs) The EC is seeking comments on 2 CRA consultation papers: 1st paper proposes (i) a set of rules that CRAs will need to respect for the authorisation and exercise of their rating activity in the EU. Main objective is to ensure ratings are reliable and accurate information for investors. CRAs will be obliged to deal with conflicts of interest, have sound rating methodologies and increase the transparency of their rating activities; (ii) 2 options for EU oversight of CRAs: (1) one based on a reinforced co-ordination role for CESR and strong regulatory co-operation between national regulators; (2) one combining the establishment of a EU Agency (CESR or a new agency) for the EU-wide registration of CRAs and the reliance on national regulators for the supervision of CRA activities. 2nd paper focuses on regulation-embedded reliance on ratings, identifies the references made to ratings in existing EU legislation and looks at possible approaches to reduce excessive reliance on ratings. |
EU Commission |
Bertie Huet
|
SIFMA CRA Task Force |
Deadline for comments is 5 Sept. |
| CEBS is consulting on 30 principles for liquidity risk management calling, among other things, for banks to establish a liquidity risk management strategy which should be approved by the bank’s board of Directors; to draft formal Contingency Funding Plans, which outline policies to manage a range of stress environments and establish clear lines of responsibility; and to conduct stress tests on a regular basis for a variety of institution-specific and market-wide stress scenarios. On the supervisory front, the paper suggests that supervisors regularly perform an assessment of a bank’s overall liquidity risk management framework and liquidity position. The paper specifically mentions that securitisation and/or ‘originate to distribute’ business should be identified and addressed explicitly in liquidity policies. Also, institutions should consider whether SPV’s/conduits should be consolidated for liquidity management purposes. | Committee of European Banking Supervisors (CEBS) |
Christian Krohn
|
Various ESF committees |
1 August 08 |
CESR consults on fair value accounting The consultation focuses on (1) fair value measurement (Active and non active markets; Selection of inputs to valuation techniques) and (2) leading practices for disclosure in illiquid markets |
Committee of European Securities Regulators (CESR) |
Christian Krohn
|
ESF accounting committee |
12 Sept 08 |
BCBS & IOSCO Consult on review of the market risk parts of Basel II Based on FSF recommendations to G7 made in April, the paper proposes to extend banks' Incremental Risk Charge (IRC) under Basel II to include price changes due to defaults as well as other sources of price risk, such as credit migration risk, rating downgrade, credit spread risk and equity price risk. IRC would cover debt securities, equities, structured credit products and derivatives referencing them. Banks must meet the guidelines for calculating the IRC by 01 Jan 2010 in order to receive specific risk model recognition. The Committee has also clarified the role regulators have to play in financial reporting standards, with individual banking supervisors able to force adjustments to current value where there is uncertainty around the realisable value of a position due to illiquidity. |
Basel Committee + IOSCO |
Rick Watson
|
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FSA Consults on Transparency as a Regulatory Tool FSA is seeking views on how it currently uses transparency as a regulatory tool and whether they should disclose more or less in a wide variety of situations |
UK FSA |
Bertie Huet |
Working with other associations |
29 August |
EC Calls for evidence on MiFID Transposition The EC is calling for industry input to assist the EC in its thorough assessment of the correctness of the transposition and application of MiFID in member states in order to ensure consistent implementation of MiFID |
EU Commission |
Christian Krohn
|
|
15 September |
Rule Proposal regarding Mutual Fund Summary Prospectus In November, 2007 the SEC published for comment a summary/short form prospectus proposal to improve disclosure to mutual fund investors. SIFMA filed a comment letter on the proposal in February, 2008. Subsequently, the SEC conducted investor focus group testing and a telephone survey. The SEC has now published the results of the testing/survey and has re-opened the comment period to elicit input on the results. SIFMA expects to file a comment letter. |
SEC |
Mike Udoff
|
Investment Company Committee & Private Client Committee |
8/29/08 |
SEC Proposed Guidance for Mutual Fund Directors regarding Soft Dollar Arrangements The SEC has published proposed guidance for mutual fund directors in conjunction with their fiduciary duty to assure that soft dollar client commission arrangements in which fund advisers participate, serve the best interests of fund shareholders. SIFMA expects to file a comment letter on the proposed guidance. |
sec |
Mike Udoff Joe Sack
|
Investment Company Committee, Institutional Brokerage Committee, Investment Adviser Committee, & Asset Management Group |
10/01/08 |
FINRA Proposed Rule Change to Adopt NASD Rules regarding Trading in Index Warrants, Currency Index Warrants, Currency Warrants, Options, and Security Futures |
SEC |
Melissa MacGregor
|
Options Committee |
8/29/08 |
This chart lists regulatory items that are currently open for comment and as to which SIFMA is considering or plans to file a comment letter. It is updated approximately once a week. The chart may not capture all matters as to which SIFMA files comment letters, and it does not reflect many other regulatory matters on which SIFMA is engaged apart from the notice and comment process.