The SEC Proposes New Rules to Prohibit Conflicts of Interest in Certain Asset-Backed Securities Transactions

On Monday, September 19, 2011, the Securities and Exchange Commission (the "SEC") proposed a new rule under the Securities Act of 1933 to implement the prohibition under Section 621 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") on material conflicts of interest in connection with certain securitizations.  The proposed rule would prohibit certain persons who create and distribute an asset-backed security, including a synthetic asset-backed security, from engaging in transactions, within one year after the date of the first closing of the sale of the asset-backed security, that would involve or result in a material conflict of interest with respect to any investor in the asset-backed security.  The proposed rule also would provide exceptions from this prohibition for certain risk-mitigating hedging activities, liquidity commitments, and bona fide market-making.

Read the SEC press release 

Read the SEC proposed rule

The CFTC Proposes Regulation to Establish Phase in Schedule for Dodd-Frank Related Regulations

On Tuesday, September 20, 2011, the Commodity Futures Trading Commission (the "CFTC") proposed regulations that would establish a schedule to phase in compliance with certain new statutory provisions enacted under Title VII of the Dodd-Frank Act.  These provisions include the clearing requirement under new section 2(h)(1)(A) of the Commodity Exchange Act (the "CEA"), and the trade execution requirement under new section 2(h)(8)(A) of the CEA.  The proposed schedules would provide additional time for compliance with these requirements.  The additional time is intended to facilitate the transition to the new regulatory regime established by the Dodd-Frank Act in an orderly manner that does not unduly disrupt markets and transactions.

The CFTC Proposes Regulation to Establish Phase in Compliance with Previously Proposed Rules

On Tuesday, September 20, 2011, the CFTC proposed regulations that would establish a schedule to phase in compliance with previously proposed requirements, including the swap trading relationship documentation requirement under proposed 17 CFR 23.504, 76 FR 6715 (Feb. 8, 2011) and the margin requirements for uncleared swaps under proposed 17 CFR 23.150 through 23.158, 76 FR 23732 (Apr. 28, 2011).  This release is a continuation of those rulemakings.  The proposed schedules would provide relief in the form of additional time for compliance with these requirements.  This delay is intended to facilitate the transition to the new regulatory regime established by the Dodd-Frank Act in an orderly manner that does not unduly disrupt markets and transactions.

Read the CFTC proposed rule

The Fed Delays Application of New Data Collection Requirements to Car Dealers

On Tuesday, September 20, 2011, the Federal Reserve Board issued a final rule amending Regulation B to provide that motor vehicle dealers are not required to comply with new data collection requirements in the Dodd-Frank Act until the Board issues final regulations to implement the statutory requirements.  The Dodd-Frank Act amended the Equal Credit Opportunity Act to require creditors to collect information about credit applications made by women- or minority-owned businesses and by small businesses.  The Consumer Financial Protection Bureau (the "CFPB") must implement this provision for all creditors except certain motor vehicle dealers who are subject to the Board's jurisdiction.  The CFPB previously announced that creditors are not obligated to comply with the data collection requirements until the CFPB issues detailed rules to implement the law.  The Board is amending Regulation B to apply the same approach to motor vehicle dealers.

Read the Fed press release

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