Audit EDP Sales/Training Trust M SolutionSmedia.mofo.com/files/uploads/Images/130901-Market-Solutions.pdf · The good news is the methods and technology exist to be the enabler Compliance

Market SolutionSEditorDorcas Pearce

Contributing Editors*Marc-Alain GaleazziBarbara R. Mendelson

Market Solutions is a quarterly newsletter about the activities of the Financial Markets Association as well as legislative/regulatory developments of interest to FMA members. The opinions expressed in this publication are those of the authors, not necessarily those of the Association and are not meant to constitute legal advice. Market Solutions is provided as a membership service of the Financial Markets Association, 333 2nd Street, NE - #104B, Washington, DC 20002, [email protected], 202/544-6327, www.fmaweb.org. Please let us have your suggestions on topics you would like to see addressed in future issues.

©2013, Financial Markets Association

Volume 22, Number 3 Financial Markets Association September 2013

Route to: ❏ Accounting ❏ Audit ❏ Compliance ❏ EDP ❏ Funds Management ❏ Operations ❏ Sales/Training ❏ Training ❏ Trust

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Social media presents both opportunity and challenge. Unlike any other technology

we’ve used in the industry to date (email, websites, et al), social occurs everywhere and on every device. In fact, the single biggest gateway to social media remains mobile and tablet devices. For example, Facebook had 50 million users when the iPhone launched in 2007. By 2010 when we received the iPad, that number had grown to 600 million and now is north of 1 billion users worldwide. Fifty percent of those users are mobile. Likewise, since 2010 LinkedIn and Twitter users have at least doubled.

The clear opportunity is our customers and their families, friends and peers are already quite active on social media. This stands true across the demographics of age and race. For consumers, social media is about connecting, learning and following what is important to them and to extending relationships. For our business – being so relationship driven – this is a welcome place to join in.

Our challenge is clear – the regulatory rules that manage electronic communications were also written for the singular nature of email and websites – yet we must live within those rules until they evolve (which they are slowly – and we are watching closely). The good news is the methods and technology exist to be the enabler

Compliance 101—Social MediaBy Blane Warrene

RegEd, Inc.

to connecting social media to our business.

The fundamentals to getting started are available to us:

The Social Media Policy

The key to engaging on social is a clearly defined policy that sets the vision and outlines how we will use social media in our business.

• Whatareourgoals?Whoarewe seeking to reach; for what purposes and across what mediums (text, images, audio, videoetal)?

• Howwillwemeettherequirements for compliance – archivingandsupervision?

• Whowillparticipateinoursocialmediainitiatives?Whoisauthorized?Willweincludethirdpartyproviders?Whatwill the process be for content management, approval and mitigation?

• Whatplatformsdoweintendtoleveragefortheabove?Somearebroad-based (i.e. Facebook) and some will be niche for special content or audience purposes (i.e. iTunes, Sound Cloud, YouTube).

The Social Media Team

Don’t let the title mislead you. This is not to infer the need for all manner of outside specialists

LAST CHANCE TO REGISTER for FMA’s LEGAL AND LEGISLATIVE ISSUES CONFERENCE

October 24 – 25, 2013 ■ Sheraton Four Points Hotel ■ Washington, DC

Market SolutionSMarket SolutionS

In This Issue2013 Legal and Legislative Issues Conference............14

2014 Securities Compliance Seminar ........................ …..16J7

June 19 Bond Mark-Up Workshop .........................…..17

Drawing for 2-Night Stay in Florida!.......................16

Legislative/Regulatory Actions ...…..2

New Members ...................... 2, 4, 5, 6

Program Update ........................…..14

Sponsor Acknowledgement ......…..15

Watch For ..................................….11

Who’s News ..............................…..18

Established in 1991, FMA is the leading association specifically dedicated to meeting the special and unique needs of banks and bank-affiliated securities firms.

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FMA WelcomesNew Members!

Donald Bendernagel Citigroup Global Markets Inc.

Paul Berger Debevoise & Plimpton LLP

Michael Bleier Reed Smith LLP

David Bodenheimer Crowell & Moring LLP

Andrew Cadel JPMorgan Chase & Co.

Jonathan Cedarbaum WilmerHale

Kim Dandurand Wells Fargo Securities

Chris Dickens HSBC Global Markets

David Dimitrious SEC

In this issue, we address various selected developments in connection with regulatory capital requirements, the Federal Reserve’s assessment of large banks to collect fees for supervisory purposes, developments from the SEC and the CFTC, and an update about the most recent activities of the CFPB.

DODD-FRANK ACT

Regulatory Capital RequirementIn July 2013, the Federal Reserve Board, the OCC, and the FDIC approved the publication of the final regulatory capital rules. The Regulatory Capital Rules make major changes to the U.S. regulatory capital framework in an effort to strengthen the regulatory capital of U.S. banking organizations and bring the United States into compliance with the Basel Committee’s current international regulatory capital accord (“Basel III”). The Rules will replace the Agencies’ general risk-based capital rules, advanced approaches rule, market risk rule, and leverage rules, as provided by the Rules’ transition provisions. The following represent select highlights from the extensive rulemaking:

• TheRegulatoryCapitalRulesbroadlyrevisethe basic definitions and elements of regulatory capital. Consistent with Basel III, Tier 1 capital will consist of common equity Tier 1 capital and additional Tier 1 capital. Total Tier 1 capital, plus Tier 2 capital, will constitute total risk-based capital. The Rules will require a number of capital adjustments, exclusions, and deductions (e.g., goodwill, other intangibles, and most deferred tax assets).

• TheRulesmakesubstantialchangestothecreditrisk weightings for banking and trading book assets through the adoption of material elements of the Basel II standardized approach for credit risk weightings.

• TheRulesfinalizechangesmadetotheBaselcapital framework in the aftermath of the financial crisis to large U.S. banking organizations subject to the advanced Basel II capital framework.

• TheRulesadoptanewphased-incapitalconservation buffer for all covered banking organizations equal to 2.5% of total risk-weighted assets, and for banking organizations subject to the advanced approach framework, the Rules adopt a macro-economic countercyclical capital buffer of up to 2.5% of total risk-weighted assets.

• TheRulesadoptaseparateTier1leveragecapitalrequirement, measured as a ratio of Tier 1 capital, minus deductions, to average on-balance sheet assets. Banking organizations subject to the advanced approach framework will be subject to a new and separate supplementary leverage ratio.

The Rules will become effective on January 1, 2014, with a mandatory compliance date of January 1, 2015 for banking organizations that are not subject to the advanced approaches framework. On that date, most banking organizations would be required to begin the transition to the full implementation of the new capital framework by 2018. For banking organizations subject to the advanced approaches framework, the effective date and compliance period,

Legislative/Regulatory Actions

This column was written by lawyers from Morrison & Foerster LLP to update selected key legislative and regulatory developments affecting financial services and capital markets activities. Because of the generality of this column, the information provided herein may not be applicable in all situations, and should not be acted upon without specific legal advice based on particular situations.


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Compliance 101 – Social Media…

Continued from Page 1

and providers. At its core – social media is about the evolution of your business (regardless of its size). It takes commitment and support from all tiers. Once you have this equation solved internal to your business, then it may make sense to find additional outside resources to help you further design and manage your social media activities. Just remember – quality and authenticity outweigh quantity.

• Leadership – a belief that social media matters in your business and executive support to take the steps and make the changes for it to become a part of your “DNA”.

• The Staff – Clearly where the rubber meets the road. The folks that day in and day out interact with clients, partners and influencers for your business. Social occurs via networking, customer service, marketing and sales. Some of the most meaningful social activity can occur here – even though it may not be the most visible.

• The Supporting Cast – your influencers, fans and partners. They have to clearly understand your goals and that social is not a bolt-on but a facet of communications in your business that factors into phone calls, meetings and day-to-day operations.

They can interact, share, refer and support your social initiatives (and you to them as well).

The Technology

Central to being active in the digital world involves recordkeeping and compliance supervision. It is a fact of life in our industry. What was a burgeoning new tech sector in 2009 (social media archiving) has grown just as social media has evolved. The tools exist to support the compliant use of social media at both the institutional level as well as at the individual level.

The central theme to remember here is that social media happens everywhere and all the time. Be prepared to choose a technology that makes this effortless for your business and your team members to easily engage on social and insure their content and activity is archived and manageable.

While there has been some doubt and confusion over how to properly participate in social media – the path to social is available and you can follow steps, understand the rules and take advantage of the tools. ■

Blane Warrene is SVP, Customer Communications at RegEd and co-founded Arkovi. He can be found on Twitter via @blano.

Compliance 101 Checklist

1. Social Media Policy is the ticket to entry to the use of social media. Start there and you will be more prepared to move ahead.

2. When selecting a compliance solution for social media – think about ease of use. Social media happens on

every device and at all times and places. Choose a provider who can accommodate this with simplicity and

meet your needs.

3. Content that gets shared widely and publicly falls into the advertising and marketing materials classification.

Understand who regulates you (FINRA, SEC, states) and know how advertising content is treated.

4. Testimonials are prohibited. We may not like it – and we know they are very valuable when given word of

mouth. But when they are written they are likes ads. Just steer clear until the regulatory bodies change their

minds. LinkedIn Skills Endorsements likely fall into this area – though no final ruling is in. Avoid for the near

future.

5. If in doubt about what is static content (blog posts, articles, profile backgrounds and bios, etc.) versus

interactive (tweets, status updates, etc.) – have content compliance-reviewed before you use it.


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and the start of the transition period, would be January 1, 2014. The Rules provide phase-in/phase-out periods for certain aspects, including minimum capital ratios, adjustments and deductions, non-qualifying capital instruments, capital conservation and countercyclical capital buffers, supplemental leverage ratio for advanced approaches banks, and changes to the PCA rules, which generally take effect by January 1, 2019. For more information on the Regulatory Capital Rules, please read our Client Alert at http://www.mofo.com/files/Uploads/Images/130702-Regulatory-Capital.pdf.

Federal Reserve’s Assessment on Large BanksOn August 16, 2013, the Federal Reserve Board issued a final rule promulgating Regulation TT. Regulation TT implements section 318 of the Dodd-Frank Act, which requires the Board to “collect assessments, fees, or other charges equal to the total expenses the Board estimates are necessary or appropriate to carry out the supervisory and regulatory responsibilities of the Board” with respect to certain “Assessed Companies.” Assessed Companies include bank holding companies and savings and loan holding companies with total consolidated assets of $50 billion or more and nonbank financial companies designated by the Financial Stability Oversight Council for Board supervision. Regulation TT outlines the process by which the Board estimates the total expenses referenced in Section 318, apportions the Assessment Basis to each Assessed Company, and collects the Assessments.

Under Regulation TT, the Assessment Basis is defined to include the total expenses that the Board estimates are necessary or appropriate to carry out the supervisory and regulatory responsibilities of the Board. Ultimately, the Assessment Basis will be a three-year rolling average of the Board’s estimated expenses. The Final Rule provides illustrative categories of operating expenses, including direct operating expenses (e.g., conducting examinations and stress tests, as well as communicating regarding supervisory matters, laws, and regulations) and operating expenses for activities integral to carrying out supervisory and regulatory responsibilities (e.g., training staff and collecting and processing regulatory reports).


FMA WelcomesMore New Members!

Phil Drummond Wells Fargo Securities

Thomas Eady SEC

Joseph Edmondsom, Jr. Foley & Lardner LLP

Martha Ellett FDIC

Jerry Flanagan Wells Fargo Securities

Pam Frazier Wells Fargo Securities

David Ham CCO Investment Services Corp.

Edward Johnsen DLA Piper (US) LLP

Tracey Jordal PIMCO

Each company’s Assessment is determined based on the following equation: Assessment = Base Amount + (Total Assessable Assets × Assessment Rate). The base amount of the Assessment is $50,000. In the Final Rule, the Board states that the base amount “will ensure that the nominal expenses related to the Board’s supervision and regulation of [Assessed Companies] are covered, particularly for those companies near the $50 billion threshold.”

The remainder of the Assessment is the product of the Assessed Company’s Total Assessable Assets and the Assessment Rate. Regulation TT apportions the Assessment Basis based on the size (i.e., Total Assessable Assets) of Assessed Companies because, as the Final Rule states, “size is a reasonable proxy for estimating the amount of the Board’s costs for regulating and supervising assessed companies.” The final piece of the Assessment equation, the Assessment Rate, is determined based on the following equation: Assessment Rate = (Assessment Basis – (Number of Assessed Companies x $50,000)) / Total Assessable Assets of all Assessed Companies.

Assessments will be made each calendar year. For 2012 Assessments, the Board will notify each Assessed Company of its Assessment after the Final Rule takes effect on October 25, 2013, and payments will be due by December 15, 2013. According to the Board’s press release, the Board estimates it will


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collect about $440 million from 70 companies for the 2012 Assessment Period.

Beginning with the 2013 Assessment Period, each Assessed Company will be notified of its Assessment by June 30 of the following calendar year. Each Assessed Company will have 30 calendar days to appeal the Board’s determination that the company is an Assessed Company or of the company’s Total Assessable Assets. Payments will be due by September 15 and interest will accrue on any Assessment not paid beginning on September 16.

SEC AND CFTC DEVELOPMENTSThe SEC and CFTC recently published guidance to address the challenges presented by new rules concerning recordkeeping, reporting, disclosure and compliance. Among other things, the SEC addressed industry concerns about how to implement the “large trader” rule, especially broker-dealers’ new obligation to obtain and report the execution times of large traders’ transactions. The CFTC also effectively addressed concerns that commodity pool operators of registered investment companies that are also commodity pools would be subject to duplicative, inconsistent, and possibly conflicting regulations adopted by the SEC and the CFTC without appropriate “harmonization” of the two regulatory regimes. We discuss both of these developments below.

Delayed Effectiveness of Some Large Trader ReportingThe SEC adopted Rule 13h-1, the “large trader” rule, to help it understand how large trader activity affects the securities markets and to support its investigative and enforcement activities. The large trader rule provides that “large trader” firms must identify themselves to the SEC and provide the SEC with certain transaction data. “Large traders” are firms with investment discretion over one or more accounts with transactions in national market system securities equal to or exceeding (i) 2 million shares or $20 million during any calendar day or (ii) 20 million shares or $200 million during any calendar month. The Rule also imposes recordkeeping and reporting obligations on broker-dealers with respect to large traders that trade through them.

Clearing broker-dealers for large traders were required to begin keeping certain records and

reporting transaction data for proprietary trades by large trader broker-dealers and transactions effected pursuant to sponsored access arrangements as of November 30, 2012. Firms must comply with the Rule’s second implementation phase, requiring clearing broker-dealers to keep records and report transactions effected pursuant to “direct market access,” beginning November 2013.

The SEC gave some firms a two-year compliance reprieve, although those firms must develop procedures and systems for reporting large trader activity within those two years. Effectively, the SEC’s release created a third implementation phase for the Rule, giving broker-dealers that are large traders but do not self-clear and broker-dealers effecting transactions for large traders whose accounts are carried by non-broker-dealers, a two year reprieve. You can find more information about the SEC’s release at http://www.mofo.com/files/Uploads/Images/130815-SEC-Delays.pdf.

CFTC “Substituted Compliance” Approach

The CFTC recently “harmonized” SEC and CFTC regulations that apply to RICs that are also commodity pools. The CFTC’s new rules adopt a



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FMA Welcomes

More New Members!

Eric Kriftcher Bank of America Merrill Lynch

Jason Loden Wells Fargo Securities

Joseph Lynyak III Pillsbury Winthrop Shaw Pittman LLP

Jack Murphy Promontory Financial Group, LLC

Donna Parisi Shearman & Sterling LLP

Harvey Rishikof Drexel University

Thomas Rosenkoetter HSBC

David Stankiewicz OCC


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“substituted compliance” approach to disclosure, compliance and financial reporting obligations applicable to RICs that invest more than a de minimis amount of their assets in commodity interests for other than bona fide hedging purposes. Under the new approach, a CPO of an RIC that complies with the SEC’s disclosure and compliance requirements will generally be deemed to comply with CFTC regulations.

Among other things, the new rules allow CPOs of RICs to continue to use fund prospectuses updated within four months of a fund’s fiscal year end and to comply with SEC requirements that prohibit the sale of shares of a RIC by means of a materially misleading prospectus. Funds that are organized as separate series of a single trust will also continue to be able to produce disclosure documents, including financial reports, on a series-by-series basis.

The CFTC will allow RICs to use SEC cautionary language to comply with the CFTC mandate that commodity pools include specific cautionary legends on the cover page of disclosure documents. RICs may also exclude CFTC-required “break-even point” disclosure from their disclosure documents.

RICs with less than three years of performance history, however, must disclose performance of all accounts and pools that the CPO manages with substantially similar investment objectives, policies, and strategies. The CFTC said that this disclosure obligation is consistent with SEC positions that permit—but do not require—disclosure of the performance of such similar accounts.

The CFTC also reaffirmed its positions that RICs may continue to invest through controlled foreign corporations, although the investment approach of a CFC may require its CPO to register, even if its parent RIC may rely on the Rule 4.5 exclusion from CFTC registration. The CFTC, however, will not require a CFC to file a separate disclosure document because the RIC’s disclosure documents will provide adequate information about the principal risks associated with investment in the CFC.

The CFTC extended certain relief to CPOs of other accounts. Among other things, the CFTC rescinded the signed acknowledgement requirement for all registered CPOs and adopted a rule that allows all CPOs and commodity trading advisers to use a disclosure document dated no more than 12 months prior to the date of its use.

Most harmonized compliance obligations for CPOs of RICs were effective upon publication in the Federal Register on August 22, 2013. Compliance with the obligation to include certain past performance information will become effective on September 23, 2013 and initial reporting on Form CPO-PQR will begin October 23, 2013.

You can find more information about the CFTC rules, and SEC guidance to its affected registrants that was issued simultaneously with the new CFTC rules at http://www.mofo.com/files/Uploads/Images/130814-Substituted-Compliance.pdf.

CFTC Cross-Border GuidanceOne of the most significant recent developments has been the CFTC’s release of its final cross-border guidance and a related exemptive order, which set out many details of the compliance schedule and is scheduled to expire on December 21 of this year. The guidance is quite detailed. Some of the many salient points are as follows.

By its terms, the guidance is not intended to be a definitive statement of policy but rather a general framework allowing for flexibility to address various situations. Perhaps most notably, not content with the eight prongs constituting most of its key “U.S. Person” definition, the CFTC notes that that there may be situations where a person not falling within those prongs may be treated as a U.S. Person “in


FMA WelcomesMore New Members!

Adam Trost OCC

Tina Tsui Deutsche Bank AG New York

Richard Wallace Foley & Lardner LLP

Tommy Watkins Wells Fargo Securities

James Watts FDIC

Timothy White SEC

John Williams Milbank, Tweed, Hadley & McCloy LLP


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view of the relevant facts and circumstances and a balancing of the various regulatory interests that may apply.” This would appear to dash the hopes of certain arguably non-U.S. Persons hoping for a clear, easily applied rule telling them whether or not they will be treated as U.S. Persons. Another key term, “affiliate conduit” —a non-U.S. entity affiliated with a U.S. Person that is deemed to act as a conduit for the U.S. Person—is defined only by reference to “factors” to be weighed in each particular case.

Among other things, the cross-border guidance states to which combinations of counterparty types which CFTC swaps regulations will apply. The CFTC’s requirements are split into two types, Transaction-Level and Entity-Level, each of which is split into two subtypes. The Transaction-Level requirements are split into Category A (which include clearing, margining, and segregation for uncleared swaps, trade execution, trading relationship documentation, real-time public reporting, and others) and Category B (consisting of the CFTC’s external business conduct standards). Similarly, the Entity-Level requirements are split into First Category requirements (which include capital adequacy, chief compliance officer, risk management, and most recordkeeping requirements) and Second Category requirements (which include swap data repository reporting and large trader reporting).

For the requirements that the CFTC has designated as “Transaction-Level,” to simplify considerably, the essential rule is that such requirements will apply whenever one party to a swap is a U.S. Person (or, in the case of a non-U.S. swap dealer, acting through a U.S. branch). At the opposite side of the spectrum, those requirements will not apply when both parties are not U.S. Persons and are not linked by guarantees or otherwise (as an affiliate conduit) to a U.S. Person.

The story is somewhat more complicated with respect to the Category A Transaction-Level requirements when a swap involves counterparts in the middle of the spectrum, such as foreign branches of a U.S. swap dealer or major swap participant, or non-U.S. Persons guaranteed by U.S. Persons or constituting affiliate conduits. In many such transactions, the CFTC’s substituted compliance regime will apply, under which the CFTC will approve the application of a foreign jurisdiction’s requirements if the CFTC determines

that they are comparable to and as comprehensive as corresponding U.S. requirements. Many of the details of the substituted compliance regime remain vague at this time. Substituted compliance will not apply to the Category B Transaction-Level requirements.

With regard to the Entity-Level requirements, they will apply to U.S. dealers and MSPs. For non-U.S. dealers and MSPs, the requirements will either apply or be subject to substituted compliance, depending on the particular requirement and whether the counterparty is a U.S. counterparty.

The guidance also addresses such matters as the swaps that will be counted toward the de minimis swap dealer or MSP registration threshold of a non-U.S. entity, and the circumstances in which a swap will be understood to be with a foreign branch of a U.S. dealer or MSP.

For a detailed account of the state of play of Dodd-Frank regulations, please see the Morrison & Foerster publication “Dodd-Frank at 3,” at http://www.mofo.com/files/Uploads/Images/130607-Dodd-Frank-at-3.pdf.

CONSUMER FINANCIAL PROTECTION BUREAU

CFPB Formalizes Senior StaffThis past quarter, the CFPB was able to formally fill several senior staff positions. The Senate confirmed Richard Cordray as director of the CFPB on July 16, 2013. Shortly after his formal confirmation, Richard Cordray took the step to ratify all actions taken by the CFPB prior to his confirmation by the Senate. On September 4, 2013, the CFPB formally appointed Steven Antonakes as deputy director. The CFPB also hired former JPMorgan Chase regulatory counsel Kathleen Ryan to serve as the Deputy Assistant Director for the Office of Regulations, and Dr. ChristopherCarrollfromJohnsHopkinsUniversityto serve as the Chief Economist for the Office of Research.

Further Revisions to Remittance Transfer RulesThis summer, the CFPB issued another technical correction to its remittance transfer rules. The amendment, published on August 14, 2013, clarifies that remittance transfer providers are required to





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refund or reapply the total amount that a sender paid minus any fees or taxes the remittance provider actually paid or was required to collect. In addition to the amended rule, the CFPB also released additional compliance guides and tools for remittance transfer providers, including a guide for small businesses, a video providing an overview of the rule, and a list of countries that are exempted from the rule’s disclosure requirements.

New Procedures to Subject Nonbank Covered Persons to CFPB SupervisionIn July, the CFPB issued a final rule setting forth procedures for when and how a nonbank covered person might become subject to CFPB supervision because that nonbank covered person presents risks to consumers. Importantly for nonbanks, the final rule allows the CFPB to examine nonbanks that are not otherwise classified as a larger participant under the CFPB’s other industry-specific rulemakings.

In establishing a framework for this new authority, the final rule prescribes procedures to notify a nonbank that it is being considered for supervision because the CFPB has reasonable cause to determine that it poses risks to consumers; provides the nonbank an opportunity to respond, and sets out what the CFPB requires in the response; and includes a mechanism for nonbanks to file a petition to terminate supervision authority after two years. The rule became effective on August 2, 2013.

Mitigating Enforcement Actions with Responsible Business ConductIn June, the CFPB issued Bulletin 2013-06 identifying “responsible business conduct” that may mitigate the exercise of its “enforcement discretion.” Similar to factors used by the SEC, and even the civil money penalty matrices used by the banking regulators, the Bulletin is significant in that it offers the first guidance on ways the CFPB will evaluate the severity of consumer law violations.

The Bulletin specifies the four broad categories of responsible conduct that the CFPB “may favorably consider.” The CFPB places a special emphasis on “self-reporting,” encouraging entities to promptly and completely report even potential violations to regulators and impacted consumers. The CFPB also stresses self-policing, remediation, and cooperation.

Despite encouraging entities to self-report, the CFPB was careful to note that it is not adopting any rule or formula, or making promises with respect to enforcement decisions. The CFPB also noted that there may be some circumstances where a covered company’s conduct is so egregious that no amount of cooperation will deter the CFPB from bringing an enforcement action or seeking civil money penalties. For additional information see http://www.mofo.com/files/Uploads/Images/130702-How-to-Be-a-Good-Corporate-Citizen-CFPB-Style.pdf.




FMA will distribute the 2013 Membership Directory next month.

The Directory will include each member’s full name (including accreditations), title/department, mailing address (including floor/suite # or mail sort/code), phone/cell (if used for business) numbers, email and firm web site (if provided).

Supplementary sections will include a calendar of upcoming FMA events and a listing of various regulatory contacts.

Members will soon recieve an email regarding their listing and be given a few weeks to provide/update current profile information. FMA wants your directory to be as accurate as possible...so be sure to submit your information ASAP by email ([email protected] – easiest!) or phone (202/544-6327).

Directory


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Debt Collection Bulletins Apply FDCPA to CreditorsIn July, the CFPB published two guidance bulletins relating to debt collection practices. The bulletins were accompanied by a set of form letters intended for consumers to use when communicating with debt collectors, and also coincided with a field hearing in Maine on debt collection that marks the CFPB’s acceptance of debt collection complaints through its consumer response system.

The CFPB’s authority to regulate debt collection practices stems, in part, from the Fair Debt Collection Practices Act. While the FDCPA only applies to third-party debt collectors, the CFPB’s bulletins use the Dodd-Frank Act’s provision on unfair, deceptive, or abusive acts or practices to apply some of the requirements of the FDCPA to all entities engaged in debt collection—including original creditors collecting on their own behalf. In this regard, the bulletins drew heavily from the CFPB’s UDAAP guidance found in the agency’s examination manual. The bulletins also provide a non-exhaustive list of examples of conduct that could constitute UDAAP violations. Additionally, the bulletins caution creditors and third-party debt collectors from using “will” statements when communicating with consumers, as statements promising a specific outcome are likely to be viewed by the CFPB as deceptive. For additional information see http://www.mofo.com/files/Uploads/Images/130711-CFPB-Issues-FDCPA-UDAAP-Guidance.pdf.



Consumer Reporting Bulletin Details Duties of FurnishersOn September 4, the CFPB released Bulletin 2013-09, reminding furnishers of consumer information of their duties to investigate consumer disputes in a timely fashion under the Fair Credit Reporting Act. The bulletin follows a CFPB report that found the online system used by the three major consumer reporting agencies to notify furnishers of consumer disputes did not allow the CRAs to forward all information and correspondence related to the disputes. In a press release accompanying the bulletin, the CFPB notes that the online reporting system has since been updated to permit all relevant information to be forwarded by the CRAs. In connection with this new capability, the bulletin outlines the CFPB’s expectation that all furnishers will have a formal system in place to receive, investigate, and respond to disputes filed by consumers and forwarded to the furnisher by a CRA.

Enforcement Action Challenges Debt Collection Business ModelIn August, the CFPB filed a complaint against debt settlement firm Morgan Drexen, alleging UDAAP violations and violations of the Telemarketing Sales Rule. Specifically, the complaint alleged that Morgan Drexen violates the TSR by collecting fees in advance for its debt settlement services. In addition, the complaint charged that Morgan Drexen falsely promises that consumers will be “debt free

To save on printing/postage costs, FMA uses email “blasts” as much as possible to let our members and contacts know about our upcoming educational programs. FMA’s email

program format necessitates that these “blasts” be addressed “To: Dorcas Pearce/FMA” / “From: Dorcas Pearce/FMA” with the recipients in the “Bcc” section. Please make sure your technology department allows these e-mails, typically providing information on our annual Compliance Seminar and Legal & Legislative Issues Conference, to get through to you. Unless you are a FMA member, you should receive no more than 5–7 e-mails annually. If you no longer want to be on FMA’s distribution list, please contact Dorcas Pearce ([email protected] or 202/544-6327) to be deleted. At that time, please provide an alternate contact at your firm so that someone can route our e-mails appropriately…perhaps a training director or a compliance officer / internal auditor / attorney in the legal dept. Thanks for your help in keeping our costs in line and for getting our notices into the proper hands.



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in months” when, in fact, very few consumers who work with the company ever become debt-free. The suit had been expected for at least a month, as Morgan Drexen had previously sued to enjoin the CFPB from taking any enforcement action against the company.

Enforcement Action Marks First Public Use of Title X Abusive StandardIn May, the CFPB made history by bringing its first public enforcement action with allegations of abusive conduct. The action, against American Debt Settlement Solutions, Inc., alleged that ADSS misled consumers and charged illegal fees for debt settlement services. ADSS agreed to pay a $15,000 fine and exit the debt settlement business. The company also agreed to a $500,000 judgment, all of which was suspended due to inability to pay.

The CFPB concluded that ADSS’s practices were abusive because they took unreasonable advantage of a consumer’s lack of understanding of how long it would take ADSS to settle the consumer’s debts, and because a consumer would have reasonably relied on ADSS to act in his or her best interests. It is unclear, however, why the CFPB felt a need to allege abusive conduct in this case. The agency also charged ADSS with violations of the TSR and with unfair and deceptive practices, which the CFPB has alleged in other actions against debt settlement firms. The CFPB

also provided little meaningful analysis of why ADSS’s practices were abusive, meaning the complaint does not contain insights for market participants to consider when assessing their own practice or acts.

Second Supervisory Highlights Focus on Compliance Functions, Mortgage ServicingIn August, the CFPB released its second set of supervisory highlights. While promoted as detailing various mortgage servicing violations, the guidance also opens with a lengthy discussion of how both banks and nonbanks should maintain compliance management systems. Specifically, the CFPB recommends supervised entities have strong board management and oversight, develop a formal compliance program and consumer complaint program, and conduct regular independent compliance audits.

With respect to mortgage servicing, the highlights provide general observations and compliance recommendations based on the CFPB’s review of servicing transfers, payment processing, and loss mitigation. The highlights also discuss recent fair lending issues and considerations for avoiding similar enforcement violations. With respect to mortgage servicing, the CFPB advises servicers to conduct regular fair lending training for loss mitigation staff, and to engage in timely fair lending risk assessments, compliance monitoring, and testing of fair lending risks.

CFPB Overdraft ReportIn June, the CFPB released its long-awaited Overdraft White Paper. The report found that consumers who opt in to overdraft coverage have a higher propensity to incur overdraft charges, insufficient funds charges for returned checks, and involuntary account closures. The CFPB noted that involuntary account closures are especially damaging because they make it harder to obtain a deposit account elsewhere. The report also found a great deal of variation among the banks studied, in terms of opt-in rates, overdraft usage, overdraft fees, and involuntary account closures.

*Kelley A. Howes, Matthew W. Janiga, Jeremy R. Mandell, and James E. Schwartz contributed to this column.



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11Market SolutionS

FDIC Press Release 81-2013 (September 10, 2013) – The FDIC approved a final rule on the definition of deposit at foreign branches of U.S. banks to clarify that these deposits are not insured by the FDIC.

CFTC Press Release 6684-13 (September 9, 2013) – The CFTC announced that the third phase of mandatory clearing of certain credit default swaps and interest rate swaps has begun.

CFTC Press Release 6683-13 (September 9, 2013) – The CFTC published in the Federal Register a Concept Release on Risk Controls and System Safeguards for Automated Trading Environments.

September 6, 2013 – The MSRB filed with the SEC revised amendments to MSRB Rules G-8, G-11 and G-32 on retail order periods.

CFTC Press Release 6682-13 (September 5, 2013) – The CFTC’s Division of Swap Dealer and Intermediary Oversight issued a no-action letter to commodity pool operators of registered funds that trade in commodity interests through wholly-owned controlled foreign corporations.

Joint Press Release (August 28, 2013) – Six federal agencies requested comment on a revised proposed rule requiring sponsors of securitization transactions to retain risk in those transactions. Comments are due by October 30, 2013.

FINRA Regulatory Notice 13-28 (August 28, 2013) – FINRA revised the Supervisory Analyst (Series 16) examination program implementation date, effective October 28, 2013.

SEC Press Release 2013-166 (August 27, 2013) – Prompted byareviewofresponsestoHurricaneSandy,theSEC’sOfficeof Compliance Inspections and Examinations issued a Risk Alert on investment advisers’ business continuity and disaster recovery planning.

August 27, 2013 – A new article, GASB Proposes Measure- ment Concepts for Assets and Liabilities and Standards for Measuring, Applying, and Disclosing Fair Value, designed for users of governmental financial statements that addresses current GASB proposals is now available on their website.

CFTC Press Release 6673-13 (August 23, 2013) – The CFTC issued an interpretation concerning retail commodity transactions.

CFTC Press Release 6672-13 (August 23, 2013) – The CFTC’s Division of Swap Dealer and Intermediary Oversight issued time-limited no-action relief regarding Regulation 23.502 for swap dealers and major swap participants in connection with swaps subject to risk mitigation techniques under EMIR. The relief expires on September 15, 2013.

MSRB Press Release (August 20, 2013) – The MSRB provided guidance for state and local governments when hiring municipal advisors.

August 20, 2013 – The MSRB reminded dealers that amendments to MSRB Rule G-39, which prohibits dealers from engaging in deceptive and other abusive telemarketing practices, became effective on August 22, 2013.

FINRA Regulatory Notice 13-27 (August 20, 2013) – The SEC approved amendments to FINRA Rule 8313 (Release of Disciplinary Complaints, Decisions and Other Information) which governs the release of disciplinary and other information by FINRA to the public, effective December 16, 2013.

MSRB Notice 2013-19 (August 19, 2013) – The MSRB requested comment on proposed rule changes to consolidate its multiple registration requirements and forms for municipal securities dealers and municipal advisors. Comments are due by September 20, 2013.

Federal Reserve Press Release (August 19, 2013) – A report released by the FRB, Capital Planning at Large Bank Holding Companies: Supervisory Expectations and Range of Current Practice, discussed in detail its expectations for internal capital planning at large bank holding companies and described the range of practices it has observed at these companies during the past three Comprehensive Capital Analysis and Review (CCAR) exercises.

FINRA Regulatory Notice 13-26 (August 19, 2013) – FINRA updated the form that firms must use for filing private placements of securities pursuant to FINRA Rules 5123 and 5122.

Federal Reserve Press Release (August 16, 2013) – The Federal Reserve Board on Friday issued a final rule establishing annual assessment fees for its supervision and regulation of large financial companies.

OCC Bulletin 2013-17 (August 15, 2013) – The OCC issued a final rule amending their rule governing lending limits. The final rule extended the temporary exception period for the application of the rule’s requirements as to derivative transactions and securities financing transactions from July 1, 2013 to October 1, 2013. All other amendments made by this final rule are effective on October 1, 2013.

MSRB Press Release (August 13, 2013) – The MSRB published a fully updated and enhanced version of its online Glossary of Municipal Securities Terms, featuring newly defined terms and updated definitions that reflect changes in the municipal securities market.

CFTC Press Release 6663-13 (August 13, 2013) – The CFTC adopted harmonization rules for registered investment companies.

CFTC Press Release 6662-13 (August 12, 2013) – The CFTC issued final rules to implement enhanced risk management standards for systemically important derivatives clearing organizations.

Watch For




12Market SolutionS

Watch For (Continued from page 11)

SEC Press Release 2013-151 (August 9, 2013) – The SEC issued a Risk Alert to help market participants detect and prevent options trading that circumvents an SEC short-sale rule.

August 9, 2013 – The MSRB now provides a tool to help issuers of municipal securities file timely financial disclosures to the EMMA website. State and local governments and other entities with annual or quarterly disclosure deadlines can schedule email reminders to alert multiple recipients that a deadline is approaching for a financial disclosure submission to EMMA.

SEC Press Release 2013-150 (August 8, 2013) – The SEC cautioned exchanges and investment professionals to monitor the composition of indices when offering futures products.

MSRB Notice 2013-16 (August 6, 2013) – The MSRB requested comment on whether to require dealers to adopt a “best execution” standard for municipal securities transactions. Comments are due no later than October 7, 2013.

MSRB Notice 2013-15 (August 6, 2013) – The MSRB requested comment on two related proposals – one to streamline municipal securities dealers’ existing fair-pricing obligations and one to require the use of specific procedures designed to promote fair pricing. Comments are due no later than September 20, 2013 and October 7, 2013, respectively.

FDIC Press Release 70-2013 (August 6, 2013) – The FDIC released a technical assistance video on interest rate risk. The FDIC’s technical assistance videos and additional information can be accessed at http://www.fdic.gov/resourcecenter.

CFTC Press Release 6660-13 (August 6, 2013) – The CFTC’s Division of Market Oversight issued an amendment to previously issued no-action relief for certain commodity trading advisors and investment advisors from the prohibition of aggregation for large notional off-facility swaps.

FINRA Trade Reporting Notice (August 1, 2013) – FINRA addressed several trade reporting issues in connection with reporting transactions in TRACE-eligible securities to the TRACE system.

MSRB Notice 2013-14 (July 31, 2013) – The MSRB sought comment on potential enhancements to price transparency in the municipal market. Comments are due by November 1, 2013.

SEC Press Release 2013-141 (July 31, 2013) – The SEC adopted rules to increase protections for investors with assets being held by broker-dealers. Broker-dealers are required to begin filing new quarterly reports with the SEC and annual reports with SIPC by the end of 2013. The requirement for broker-dealers to file annual reports with the SEC is effective June 1, 2014.

SEC Press Release 2013-140 (July 31, 2013) – The SEC adopted amendments to the net capital, customer protection, books and records, and notification rules for broker-dealers.

CFTC Press Release 6657-13 (July 31, 2013) – The CFTC’s Division of Clearing and Risk issued a notice regarding the expiration of cross-border exemptive relief from the clearing requirement.

Joint Press Release (July 30, 2013) – Three federal agencies sought comment on Dodd-Frank Act stress test guidance for medium-sized firms. The public comment period is open until September 25, 2013.

CFTC Press Release 6654-13 (July 30, 2013) – The CFTC’s Division of Market Oversight issued time-limited no-action relief from the prohibition of aggregation under § 43.6(h)(6) for large notional off-facility swaps until 11:59 p.m. eastern time on October 1, 2013. Additionally, the Division is providing no-action relief, subject to specified conditions, from the aggregation prohibition in § 43.6(h)(6) for certain CTAs and IAs with respect to large notional off-facility swaps that are not listed or offered for trading on any SEFs or DCMs until further notice by the Division.

FINRA Regulatory Notice 13-24 (July 22, 2013) – FINRA announced modifications regarding historic TRACE data, effective July 22, 2013.

CFTC Press Release 6648-13 (July 19, 2013) – The CFTC’s Division of Clearing and Risk issued an extension of time-limited no-action relief from required clearing for swaps entered into by certain cooperatives. The proposed cooperative exemption rule is not yet final. This extension of the no-action relief remained in effect until the earlier of August 16, 2013, or the effective date of a Commission rulemaking finalizing the proposed cooperative exemption.

FINRA Regulatory Notice 13-23 (July 18, 2013) – FINRA provided guidance on disclosure of fees in communications concerning retail brokerage accounts and individual retirement accounts.

CFTC Press Release 6643-13 (July 11, 2013) – The CFTC’s Division of Swap Dealer and Intermediary Oversight issued a technical correction to a no-action letter regarding certain risk mitigation requirements that had been issued earlier that day.

CFTC Press Release 6642-13 (July 11, 2013) – CFTC staff issued four no-action letters providing relief in connection with issues relating to swaps regulation.

MSRB Press Release (July 10, 2013) – The MSRB released a report summarizing the type and number of continuing disclosure documents submitted by issuers of municipal securities to the EMMA website between July 2009 and March 2013.

SEC Press Release 2013-124 (July 10, 2013) – The SEC approved a JOBS Act requirement to lift the ban on general solicitation or general advertising for certain private securities offerings. The Commission also adopted a rule to disqualify bad actors from certain offerings and proposed rules to enable the SEC to monitor new market and bolster investor protections.



13Market SolutionS

Watch For (Continued from page 12)

Joint Press Release (July 10, 2013) – Six federal financial regulatory agencies issued a proposed rule that would create exemptions from certain appraisal requirements for a subset of higher-priced mortgage loans.

OCC News Release 2013-110 (July 9, 2013) – The OCC approved a final rule on regulatory capital.

Joint Press Release (July 9, 2013) – The FRB, FDIC and OCC proposed a rule to strengthen the leverage ratio standards for the largest, most systemically significant U.S. banking organizations. The agencies proposed a substantial phase-in period for the rule with an effective date of January 1, 2018.

FDIC Press Release 60-2013 (July 9, 2013) – The FDIC Board of Directors approved an interim final rule that adopts with revisions the three notices of proposed rulemaking that the banking agencies proposed last year related to Basel III and the standardized approach.

July 8, 2013 – To keep regulated entities and others apprised of the rulemaking process, the MSRB now provides links to all official information related to the status of its rule filings with the SEC. The rule filings page of www.msrb.org now includes links to filing amendments, SEC requests for more time to review the filing, SEC approval orders and Federal Register notices. Making this additional information available will help municipal securities dealers and municipal advisors stay up to date throughout the rulemaking process.

Federal Reserve Press Release (July 2, 2013) – The FRB approved a final rule to help ensure banks maintain strong capital positions that will enable them to continue lending to creditworthy households and businesses even after unforeseen losses and during severe economic downturns.

SEC Press Release 2013-121 (July 2, 2013) – The SEC announced enforcement initiatives to combat financial reporting and microcap fraud and enhance risk analysis.

July 2, 2013 – The MSRB submitted a comment letter to the SEC regarding proposed Regulation SCI, a series of regulatory requirements to protect the integrity of key systems in the securities markets.

July 1, 2013 – As of July 1, 2013, MSRB Rules G-37 and G-8 require the public disclosure of additional information related to bond ballot campaign contributions and the municipal securities business engaged in by dealers resulting from voter approval of the bond ballot measure to which such contributions relate. The MSRB reminded brokers, dealers and municipal securities dealers that the additional quarterly disclosures must be submitted to the MSRB no later than October 31, 2013 for the quarter commencing on July 1, 2013 and each quarter thereafter.

June 28, 2013 – The MSRB’s proposal to change rules related to retail order periods has been published in the Federal Register. The deadline for submitting comments to the SEC was July 19, 2013.

June 28, 2013 – The MSRB’s proposal on new MSRB Rule G-45 and proposed amendments to MSRB Rules G-8 and G-11 has been published in the Federal Register. The deadline for submitting comments to the SEC was July 19, 2013.

FINRA Regulatory Notice 13-22 (June 28, 2013) – FINRA revised the Equity Trader (Series 55) examination program. The changes are reflected in the Series 55 content outline on FINRA’s website and appeared in the Series 55 examination starting on August 12, 2013.

Federal Reserve Press Release (June 25, 2013) – The Federal Reserve Board proposed new data collection requirements related to selected money market instruments.

OCC News Release 2013-102 (June 20, 2013) – The Comptroller signed a rule finalizing OCC amendments to 12 CFR part 32, which governs lending limits. The rule implements section 610 of the Dodd Frank Act, which applies the lending limit statute to credit exposures arising from derivative transactions and securities financing transactions, and makes other changes. Under the rule, which was signed June 19, a temporary exception period has been extended for three months so that compliance with the Section 610 provisions will not be required until October 1.

June 17, 2013 – The MSRB filed with the SEC proposed rule changes regarding disclosures in connection with primary offerings and retail order period requirements.

June 17, 2013 – The MSRB requested approval from the SEC for a proposed rule change to MSRB Rules G-8, G-11 and G-32. The proposed changes would help to address concerns that new issues of municipal bonds are not being distributed among different types of retail investors according to the preferences of the state or local government issuing the bonds.

MSRB Notice 2013-13 (June 12, 2013) – The MSRB reminded municipal securities investors, dealers and other market professionals to review the terms of Build America Bonds and other so-called “direct-pay bonds” in light of the Federal sequester.

SEC Press Release 2013-108 (June 12, 2013) – The SEC and FINRA issued a warning to investors about a sharp increase in email links to “pump-and-dump” stock schemes.

June 10, 2013 – The MSRB filed with the SEC proposed new MSRB Rule G-45 and proposed amendments to MSRB Rules G-8 and G-9 that would require dealers acting in the capacity of underwriters to submit to the MSRB certain information for the 529 plans they underwrite, on a semi-annual basis.

Available Publications

August 12, 2013 – The MSRB published an advisory and set of guides to help issuers of municipal bonds better understand the types of information they must publicly disclose and how to use the MSRB’s EMMA website to make these disclosures.

July 29, 2013 – The updated, revised, and significantly expanded second edition of An Analyst’s Guide to Government Financial Statements is now available for purchase at the GASB Store – www.gasb.org/store.


14Market SolutionS

(Continued on page 15)

Program Update

2013 Legal & Legislative Conference

Last chance to register! FMA’s 22nd Legal & Legislative Conference will take place October 24–25 at the Four Points Sheraton

Hotel* (FMA room block sold out...see next page) here in Washington, DC. This annual program is a high-level forum for banking and securities attorneys as well as senior compliance officers/risk managers, internal auditors and regulators. Participants are provided with a unique opportunity to share information on current legal and regulatory developments as well as network with peers and regulators in an intimate setting. And, attendees are eligible for CLE and CPE accreditation (among others).

The Program Planning Committee has devised a timely agenda including noted industry leaders and senior regulatory officials. Members include: Russell Bruemmer (WilmerHale LLP); Michael Halloran (Pillsbury Winthrop Shaw Pittman LLP); Mark Hutchinson (HSBC Securities USA Inc.); Mark Steffensen (HSBC Securities USA Inc.); Gregory Todd (Bank of America Merrill Lynch); Pratin Vallabhaneni (Debevoise & Plimpton LLP); and Joseph Vitale (Schulte Roth & Zabel LLP).

The agenda, focusing on current areas of regulatory and Congressional activity/scrutiny, includes these sessions and confirmed speakers:

General Counsels› Scott Alvarez ■ FRB› Robert Colby ■ FINRA› Michael Conley ■ SEC› Amy Friend ■ OCC› Jonathan Marcus ■ CFTC› Christopher Meade ■ Treasury› John Thomas ■ FDIC

Legislative Update with Hill Staffers› Speakers to be Announced

Volcker Rule› Eric Kriftcher ■ Bank of America Merrill Lynch› Christopher Paridon ■ FRB› Tina Tsui ■ Deutsche Bank AG New York› Joseph Vitale ■ Schulte Roth & Zabel LLP

Derivatives› Donald Bendernagel ■ Citigroup Global Markets Inc.› Tracey Jordal ■ PIMCO› Donna Parisi ■ Shearman & Sterling LLP

AML/OFAC/FCPA Updates› Paul Berger ■ Debevoise & Plimpton LLP› Koko Ives ■ FRB› Brandon Reddington ■ OFAC/U.S. Department of the Treasury› Daniel Tannebaum ■ Booz Allen Hamilton

Cybersecurity, Data Privacy & Technology Vendor Management› Valerie Abend ■ OCC› David Bodenheimer ■ Crowell & Moring LLP› Andrew Cadel ■ JPMorgan Chase & Co.› Harvey Rishikof ■ Drexel University

SEC Division Reports› Andrew Bowden ■ OCIE› Andrew Ceresney ■ Enforcement› Vanessa Countryman ■ Economic and Risk Analysis› James Daly ■ Corporation Finance› David Grim ■ Investment Management› John Ramsay ■ Trading and Markets

Cross-Border Regulatory Initiatives› Chris Dickens ■ HSBC Global Markets› Jeremy Newell ■ The Clearing House Association› Richard Pearson ■ Balch & Bingham LLP› Rebecca Simmons ■ Sullivan & Cromwell LLP

Too Big to Fail› Michael Bleier ■ Reed Smith LLP› John Buchman ■ The George Washington University Law School› Joseph Lynyak ■ Pillsbury Winthrop Shaw Pittman LLP› Jack Murphy ■ Promontory Financial Group, LLC

To view the complete program, go to www.fmaweb.org and click on the pdf. Online registration is also available.

Please alert your colleagues to this annual fall conference (someone may need CLE or CPE by


15Market SolutionS

Program Update (continued from page 14)


year-end). And, contact Dorcas Pearce ([email protected] or 202/544-6327) if you have questions or wish to register…2-for-1 team as well as agency/government discounts are available.

*FMA’s room block at the Four Points Sheraton is sold out, but FMA has several rooms in reserve at the group rate. Contact Dorcas Pearce at 202/544-6327 or [email protected] to secure one of these rooms. They will be given out on a first-come, first-served basis. Once these rooms are gone, FMA can provide the names of a few nearby hotels.

FMA gratefully acknowledges these sponsors of FMA’s 2013 Legal and Legislative Issues


16Market SolutionS


2014 Securities Compliance Seminar

Save these dates! FMA’s 23rd Securities Compliance Seminar is set to take place April

23–25, 2014attheMarriottVanderbiltHotelinMusic City…Nashville! This annual program is a three-day educational and networking experience for securities compliance professionals, internal auditors, risk managers, attorneys and regulators. The Planning Committee is now being assembled to begin work on program development. Contact Dorcas Pearce ([email protected] or 202/544-6327) to volunteer…as a committee member, a general session panelist, workshop facilitator or peer discussion leader…or to share topical and/or speaker suggestions. Please note…speakers receive a complimentary registration and are encouraged to attend as much of the seminar as possible. FMA needs your input! A survey will be emailed shortly asking for “hot topic”/best practice ideas and speaker recommendations…you may even choose to volunteer! Please email your thoughts to Dorcas Pearce by October 18. CPE / CLE accreditation will be available, so be sure to budget for, and plan to attend, the 23rd annual Securities Compliance Seminar next spring.

FMA is currently seeking seminar exhibitors and vendors. So that FMA can be most responsive, please suggest vendors or products that FMA can invite to participate at the 2014 Securities Compliance Seminar. Thanks!

(Continued on Page 17)Nashville skyline. Courtesy of Nashville Convention & Visitors Corporation.

Nashville Honky Tonk nightlife, Courtesy of Nashville Convention & Visitors Corporation.

Early Registration Prize Drawing

Win a two night stay at the B Ocean Hotel in Fort Lauderdale, Florida! This was the site of FMA’s 2013 Securities Compliance Seminar and was a great favorite of all the attendees. Check it out at www.boceanfortlauderdale.com. All paid registrants as of December 11 to the 2014 Securities Compliance Seminar will be entered to win. Some restrictions will apply. Contact Dorcas Pearce ([email protected] or 202/544-6327) to register or if you have questions about this prize drawing. The winner will be notified December 12.

AND

Save $100! This lowest registration rate will be available to the first 5 paid registrants to the 2014 Securities Compliance Seminar. Contact Dorcas Pearce ([email protected] or 202/544-6327) to with questions and/or to register. Online registration at www.fmaweb.org is also available.


17Market SolutionS

June 19 Bond Mark-Up

Workshop

Thirty attendees participated in FMA’s highly successful June 19th Bond Mark-up Workshop— Everything You Must Know in New York. Presented in a classroom learning and interactive format by

Malcolm Northam (former FINRA Director of Fixed Income Securities), this program addressed:

› whenisatransactioncontemportaneous?› the regulator method of determining a bond’s prevailing market price, and issues that arise when you use a different method› whenisafirmadebtmarketmaker?› the rationale for reduced mark-ups (markdown) in riskless transactions› what factors regulators look at when considering a bond fair market value under either MSRB Rule G-30 or NASD Rule 2440 and IM-2440 at the time of a customer transaction› what you should know when using a broker’s broker› a review of recent FINRA and SEC debt mark-up enforcement cases

FMA is seeking venues to repeat this classroom learning program or programs on additional topics. If you would like to participate in such an FMA sponsored program, contact Dorcas Pearce at [email protected] or 202/544-6327. Or, alternatively, bring Mac Northam to your firm as part of a compliance meeting or internal educational program. Contact him directly at 202/349-1461 or [email protected].

Nashville Music City July 4 Event fireworks, Courtesy of Nashville Convention & Visitors Corporation.



18Market SolutionS

Who’s NewsEdward Cahillane has moved from CCO Investment Services Corp. to RBS Citizens Financial Group Regulatory Affairs as the Director of Regulatory Development.

Jina L. Choi has been named Director of the SEC’s San Francisco Regional Office where she will oversee enforcement and examinations in Northern California and the Pacific Northwest.

Xiomara Corral, formerly at BNY Mellon, has joined Santander Securities in Boston as their Legal Counsel.

Paula Dubberly, Deputy Director of the Division of Corporation Finance at the Securities and Exchange Commission, is retiring this month after more than 20 years of service.

Merri Jo Gillette, formerly Director of the SEC’s Chicago Regional Office from 2004-2013, has joined Morgan, Lewis & Bockius LLP as a Partner in their Litigation Practice in the firm’s Chicago office.

Charles Horn, formerly a Partner at Morrison & Foerster LLP, has joined Morgan, Lewis & Bockius LLP’s Washington, DC office as a financial services regulatory partner.

Elliott Leary (CPA/CFF) has joined Freeh Group International Solutions, LLC as a Managing Director in their Washington, DC office.

Ann-Marie Mason has been promoted to Director and Counsel of Non-Disciplinary Litigation at FINRA.

Diane Novak has joined RBS Citizens Bank – Wealth Management Team in the Boston, MA area as SVP & Chief Compliance Officer.

Mike OterorecentlyjoinedHancockBankin Gulfport, Mississippi as the bank’s Chief Internal Auditor. Mike previously worked at First Citizens Bank in Columbia, SC where he was the bank’s General Auditor since 2009.

Martin Pfinsgraff has been named Senior Deputy Comptroller for Large Bank Supervision at the Office of the Comptroller of the Currency.

Michael Post has been named Deputy General Counsel at the Municipal Securities Rulemaking Board where he will oversee all aspects of the MSRB’s rulemaking activities.

Julie Riewe and Marshall Sprung have been named Co-Chiefs of the Division of Enforcement’s Asset Management Unit at the Securities and Exchange Commission. The unit focuses on misconduct by investment advisers, investment companies, and private funds.

Lawrence Sandor, who has been with the MSRB since 2008, is now Deputy General Counsel with oversight for enforcement support and professional qualifications for regulated entities.

Penny Winter, VP/Audit Manager at Mercantil Commercebank in Miami will retire in November 2013 after 30 years in the financial services industry. Congratulations, Penny!

Don Waack and his wife, Tina Matsuoka, welcomed their second son, Wyatt Kojiro Waack on June 7. Wyatt weighed in at a healthy 9 lbs. 2 oz. Mom, dad, baby and big brother Atticus are all doing well. Don is an Associate in the Financial Services Regulatory and Enforcement practice at Mayer Brown LLP’s Washington, DC office. Congratulations to the happy family!

Documents

Audit EDP Sales/Training Trust M SolutionSmedia.mofo.com/files/uploads/Images/130901-Market-Solutions.pdf · The good news is the methods and technology exist to be the enabler Compliance