Financial Regulatory Reform Reconciliation is Underway

On June 15, 2010, the House-Senate Conference committee began reconciling the two versions of financial regulatory reform legislation. The current timeline is to have the President sign a finalized bill by the July 4th recess.

Read the announcement from Senator Dodd (D-CT) 

Read the upcoming conference schedule

SEC Approves New Circuit Breaker Rules

On June 10, 2010, the Securities and Exchange Commission announced the approval of new circuit breaker rules. The rules require stock exchanges and FINRA to halt trading of individual stocks if those stocks move 10% or more in price within a five-minute period. 

Read the SEC release

Bank of Japan Outlines Fund-Provisioning Measure

On June 15, 2010, the Bank of Japan outlined the framework for a 3 trillion yen lending program in an effort to strengthen the economy. A financial institution is eligible for a loan if it is already a counterparty in the bank’s fund-supplying operations against pooled collateral. Initial loans are for one year and can be rolled over up to three times. 

Read the release from the Bank of Japan

New European Rules Adopted for the Derivatives Market

On June 15, 2010, the European Parliament adopted a resolution regarding stricter rules for the derivatives market. The proposed rules include banning purely speculative trading in commodities and agricultural products, mandatory central clearing of derivatives, lighter regulation of over-the-counter derivatives when carried out by corporate end-users, and banning speculative credit default swap trading. The European Commission will publish new EU draft legislation on derivatives in September.

Europe Ends "Bankers' Bonus" Culture

On June 15, 2010, the Economic and Monetary Affairs Committee of the European Parliament backed new rules to end bankers' risk-taking culture, which aim to emphasize long-term stability instead of excessive risk-taking. The new rules provide that banks receiving taxpayer support would cap directors' salaries at €500,000, bonuses would be capped at 50% of a person's total compensation, that bonuses could not be paid upfront and 40% of a bonus would be deferred – and for no less than 5 years, at least 90% of non-deferred income would be "contingent capital" and retained for at least 5 years, and EU and country supervisors would need to benchmark financial sector remuneration policies. The European Parliament, Council, and Commission will now begin negotiations on the new rules. 

Federal Reserve Approves Final Rule to Protect Credit Card Users

On June 15, 2010, the Federal Reserve Board approved a final rule aimed at protecting credit card users from unreasonable late payment and other penalty fees and requiring credit card issuers to reconsider interest rate increases. The final rule amends Regulation Z (Truth in Lending) and prohibits credit card issuers from imposing certain fees, such as "inactivity" fees, caps other fees, and requires issuers with increased rates since January 1, 2009 to evaluate the reasons for the increase and to reduce the rates if appropriate.

Read the press release from the Federal Reserve

Read the notice that will be published in the Federal Register