RONKONKOMA, N.Y., July 22, 2011 /PRNewswire/ -- NBTY, Inc. ("NBTY") announced today that it has extended the expiration date of its previously announced registered exchange offer for its outstanding 9% Senior Notes due 2018 (the "Private Notes"). NBTY originally issued the Private Notes, in an
NBTY, Inc. Announces Extension of Registered Exchange Offer for 9% Senior Notes Due 2018
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16º Hedge Fund inscrito en "Incubadora de gestores" : "Relative Strength Fund". Visita su ficha http://t.co/8FuJ91a
16º Hedge Fund inscrito en "Incubadora de gestores" : "Relative Strength Fund". Visita su ficha http://t.co/8FuJ91a
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HedgeCo.net News K1 Hedge Fund Founder Kiener Is Jailed for 10 Years in Ponzi-Scheme Fraud: Bloomberg â K1 Group... http://bit.ly/rs0gyd
HedgeCo.net News K1 Hedge Fund Founder Kiener Is Jailed for 10 Years in Ponzi-Scheme Fraud: Bloomberg â K1 Group... http://bit.ly/rs0gyd
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Regulatory change for financial institutions: crossing the ocean in an open boat : Table of Contents
Abstract:
Purpose  This paper aims to draw some overall conclusions and suggest a general approach financial institutions might take in response to all the different countries' recent financial reform legislation. Design/methodology/approach  The paper lays out some of the important themes running through the post-crisis set of reforms, discusses the practical impact, and recommends a checklist for financial institutions to follow in responding to the reforms. Findings  Financial institutions have been cast into the role of villains and have lost some of their influence, but they still play a vital role. Making a decent profit in the new world will be hard, but there is much secondary legislation to come, and the different ways in which it will be implemented in various countries may present opportunities. Originality/value  The paper provides expert guidance from experienced financial services lawyers.
Purpose  This paper aims to draw some overall conclusions and suggest a general approach financial institutions might take in response to all the different countries' recent financial reform legislation. Design/methodology/approach  The paper lays out some of the important themes running through the post-crisis set of reforms, discusses the practical impact, and recommends a checklist for financial institutions to follow in responding to the reforms. Findings  Financial institutions have been cast into the role of villains and have lost some of their influence, but they still play a vital role. Making a decent profit in the new world will be hard, but there is much secondary legislation to come, and the different ways in which it will be implemented in various countries may present opportunities. Originality/value  The paper provides expert guidance from experienced financial services lawyers.
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Electronic trading agreements : Table of Contents
Abstract:
Purpose  This paper aims to analyze various issues a hedge fund manager should consider prior to executing any electronic trading agreement with a prime broker. Design/methodology/approach  The paper discusses how hedge fund managers use electronic trading platforms and prime brokerage services; recommends considerations for hedge fund managers to keep in mind when negotiating electronic trading agreements, including scope of the license grant for the electronic trading platform, warranties, indemnification and limitation of liability, security, confidentiality, maintenance, customization and termination. Findings  Prior to signing any electronic trading agreement, a hedge fund manager should assess a fund's requirements and conduct due diligence to confirm that the applicable prime broker can meet such needs. Since many electronic trading agreements impose various obligations on a hedge fund manager, prevent him/her from conducting business as expected or required and significantly limit the prime broker's liability, counsel should review such contracts prior to execution. Practical implications  Hedge fund managers should analyze whether the applicable electronic trading services can meet their needs and also consult with counsel to understand the full legal implications of the electronic trading documentation. Originality/value  This paper is intended to educate existing as well as new managers of hedge funds about the business and legal implications of electronic trading agreements. The authors are experienced attorneys who routinely negotiate electronic trading agreements with prime brokers.
Purpose  This paper aims to analyze various issues a hedge fund manager should consider prior to executing any electronic trading agreement with a prime broker. Design/methodology/approach  The paper discusses how hedge fund managers use electronic trading platforms and prime brokerage services; recommends considerations for hedge fund managers to keep in mind when negotiating electronic trading agreements, including scope of the license grant for the electronic trading platform, warranties, indemnification and limitation of liability, security, confidentiality, maintenance, customization and termination. Findings  Prior to signing any electronic trading agreement, a hedge fund manager should assess a fund's requirements and conduct due diligence to confirm that the applicable prime broker can meet such needs. Since many electronic trading agreements impose various obligations on a hedge fund manager, prevent him/her from conducting business as expected or required and significantly limit the prime broker's liability, counsel should review such contracts prior to execution. Practical implications  Hedge fund managers should analyze whether the applicable electronic trading services can meet their needs and also consult with counsel to understand the full legal implications of the electronic trading documentation. Originality/value  This paper is intended to educate existing as well as new managers of hedge funds about the business and legal implications of electronic trading agreements. The authors are experienced attorneys who routinely negotiate electronic trading agreements with prime brokers.
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Competitive forces and cost-based analysis in SEC review of SRO market data fee filings: NetCoalition v. Securities and Exchange Commission : Table of Contents
Abstract:
Purpose  This paper aims to analyze and discuss the implications of the August 2010 decision of the D.C. Circuit Court of Appeals vacating and remanding to the SEC its December 2008 order approving a proposed fee filed by NYSE Arca, LLC for its depth-of-book product ArcaBook. It also seeks to consider the effect on the court's decision of the Dodd-Frank Act amendments to Section 19(b) of the Exchange Act. Design/methodology/approach  The paper analyzes the evolution of the SEC's policy regarding SRO market data fees including the 1999 Concept Release on Market Information, the Advisory Committee on Market Information, the effects of decimalization and the 2005 adoption of Regulation NMS. It focuses on market data fee policy in connection with the Commission's decade-long project to increase the role of competition in the US securities markets, culminating in the 2006 NYSE Arca fee filing, the SEC's 2008 order approving those fees and the NetCoalition decision. Findings  The court's decision that a cost analysis is not irrelevant to the SEC's review of proposed SRO fee filings brings clarity and finality to a long-standing dispute within the Commission and the securities industry and identifies a procedure for reaching an economically sound determination of Âfair and reasonable fees for SRO market data. Practical implications  A cost-based analysis of SRO market data fee filings is likely to result in a significant decline in market data revenues for those exchanges that charge fees for their data. For the Commission, cost-based analysis is likely to require a significant reallocation of its regulatory staff and resources. Originality/value  The paper presents a useful analysis for securities regulatory lawyers and financial analysts and investors following the stock exchange and financial information industries.
Purpose  This paper aims to analyze and discuss the implications of the August 2010 decision of the D.C. Circuit Court of Appeals vacating and remanding to the SEC its December 2008 order approving a proposed fee filed by NYSE Arca, LLC for its depth-of-book product ArcaBook. It also seeks to consider the effect on the court's decision of the Dodd-Frank Act amendments to Section 19(b) of the Exchange Act. Design/methodology/approach  The paper analyzes the evolution of the SEC's policy regarding SRO market data fees including the 1999 Concept Release on Market Information, the Advisory Committee on Market Information, the effects of decimalization and the 2005 adoption of Regulation NMS. It focuses on market data fee policy in connection with the Commission's decade-long project to increase the role of competition in the US securities markets, culminating in the 2006 NYSE Arca fee filing, the SEC's 2008 order approving those fees and the NetCoalition decision. Findings  The court's decision that a cost analysis is not irrelevant to the SEC's review of proposed SRO fee filings brings clarity and finality to a long-standing dispute within the Commission and the securities industry and identifies a procedure for reaching an economically sound determination of Âfair and reasonable fees for SRO market data. Practical implications  A cost-based analysis of SRO market data fee filings is likely to result in a significant decline in market data revenues for those exchanges that charge fees for their data. For the Commission, cost-based analysis is likely to require a significant reallocation of its regulatory staff and resources. Originality/value  The paper presents a useful analysis for securities regulatory lawyers and financial analysts and investors following the stock exchange and financial information industries.
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Summary of selected FINRA Regulatory Notices October-December 2010 : Table of Contents
Abstract:
Purpose  The purpose of this summary is to provide excerpts of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices and Disciplinary Actions issued in October, November, and December 2010. Design/methodology/approach  The paper provides excerpts from FINRA Regulatory Notice 10-45, Margin and Extension of Time Requests; 10-51, Commodity Futures-Linked Securities; 10-57, Funding and Liquidity Risk Management Practices; and 10-61, Independent Verification of Assets. Findings  Regulatory Notice 10-45: FINRA Rule 4210 rule promulgates the margin requirements that determine the amount of collateral customers are expected to maintain in their margin accounts, including strategy-based margin accounts and portfolio margin accounts; FINRA Rule 4220 sets forth the requirements for daily recordkeeping of initial and maintenance margin calls that are issued pursuant to Regulation T and the margin rules. Notice10-51: Firms that offer commodity futures-linked securities are reminded that they must ensure that communications with the public about these securities are fair and balanced, that recommendations to customers are suitable, and that their registered representatives adequately understand and are able to inform their customers about these securities before they recommend them. Notice 10-57: FINRA expects broker-dealers to develop and maintain robust funding and liquidity risk management practices to prepare for adverse circumstances. Notice 61: The SEC has approved and FINRA has adopted new FINRA Rule 4160 to strengthen its ability to independently verify assets maintained by a member at a non-member financial institution. Originality/value  These are direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends. The FINRA staff is aware of this summary but has neither reviewed nor edited it. For further detail as well as other useful information, the reader should visit www.finra.org
Purpose  The purpose of this summary is to provide excerpts of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices and Disciplinary Actions issued in October, November, and December 2010. Design/methodology/approach  The paper provides excerpts from FINRA Regulatory Notice 10-45, Margin and Extension of Time Requests; 10-51, Commodity Futures-Linked Securities; 10-57, Funding and Liquidity Risk Management Practices; and 10-61, Independent Verification of Assets. Findings  Regulatory Notice 10-45: FINRA Rule 4210 rule promulgates the margin requirements that determine the amount of collateral customers are expected to maintain in their margin accounts, including strategy-based margin accounts and portfolio margin accounts; FINRA Rule 4220 sets forth the requirements for daily recordkeeping of initial and maintenance margin calls that are issued pursuant to Regulation T and the margin rules. Notice10-51: Firms that offer commodity futures-linked securities are reminded that they must ensure that communications with the public about these securities are fair and balanced, that recommendations to customers are suitable, and that their registered representatives adequately understand and are able to inform their customers about these securities before they recommend them. Notice 10-57: FINRA expects broker-dealers to develop and maintain robust funding and liquidity risk management practices to prepare for adverse circumstances. Notice 61: The SEC has approved and FINRA has adopted new FINRA Rule 4160 to strengthen its ability to independently verify assets maintained by a member at a non-member financial institution. Originality/value  These are direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends. The FINRA staff is aware of this summary but has neither reviewed nor edited it. For further detail as well as other useful information, the reader should visit www.finra.org
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Summary of selected FINRA regulatory notices, January-February 2011 : Table of Contents
Abstract:
Purpose  The purpose of this summary is to provide excerpts of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices and Disciplinary Actions issued in January and February 2011. Design/methodology/approach  The paper provides excerpts from FINRA Regulatory Notice 11-03, January 2011, Order Audit Trail System (OATS): FINRA Expands the Order Audit Trail System to All NMS Stocks; Notice 11-06, February 2011, Reporting Requirements: SEC Approves Consolidated FINRA Rule Governing Reporting Requirements; and Notice 11-07, February 2011, Sanction Guidelines: FINRA Revises the Sanction Guidelines. Findings  Regulatory Notice 11-03: Effective July 11, 2011, FINRA will begin expanding, in three phases, the order recording and reporting obligations in the OATS Rules to include orders in all NMS stocks, in addition to OTC equity securities. Notice 11-06: The SEC approved FINRA's proposal to adopt a rule governing reporting requirements for the consolidated FINRA rulebook. The rule requires member firms to: report to FINRA certain specified events and quarterly statistical and summary information regarding written customer complaints; and file with FINRA copies of certain criminal actions, civil complaints and arbitration claims. Notice 11-07: Advises FINRA firms of modifications to the FINRA Sanction Guidelines, which reflect the experience of FINRA's Departments of Market Regulation and Enforcement in settling and litigating cases, and incorporate the teachings of federal appellate court and SEC precedent in recent FINRA disciplinary cases. Originality/value  These are direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends. The FINRA staff is aware of this summary but has neither reviewed nor edited it. For further detail as well as other useful information, the reader should visit: www.finra.org
Purpose  The purpose of this summary is to provide excerpts of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices and Disciplinary Actions issued in January and February 2011. Design/methodology/approach  The paper provides excerpts from FINRA Regulatory Notice 11-03, January 2011, Order Audit Trail System (OATS): FINRA Expands the Order Audit Trail System to All NMS Stocks; Notice 11-06, February 2011, Reporting Requirements: SEC Approves Consolidated FINRA Rule Governing Reporting Requirements; and Notice 11-07, February 2011, Sanction Guidelines: FINRA Revises the Sanction Guidelines. Findings  Regulatory Notice 11-03: Effective July 11, 2011, FINRA will begin expanding, in three phases, the order recording and reporting obligations in the OATS Rules to include orders in all NMS stocks, in addition to OTC equity securities. Notice 11-06: The SEC approved FINRA's proposal to adopt a rule governing reporting requirements for the consolidated FINRA rulebook. The rule requires member firms to: report to FINRA certain specified events and quarterly statistical and summary information regarding written customer complaints; and file with FINRA copies of certain criminal actions, civil complaints and arbitration claims. Notice 11-07: Advises FINRA firms of modifications to the FINRA Sanction Guidelines, which reflect the experience of FINRA's Departments of Market Regulation and Enforcement in settling and litigating cases, and incorporate the teachings of federal appellate court and SEC precedent in recent FINRA disciplinary cases. Originality/value  These are direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends. The FINRA staff is aware of this summary but has neither reviewed nor edited it. For further detail as well as other useful information, the reader should visit: www.finra.org
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Commodities tax compliance challenges: Dodd-Frank and beyond : Table of Contents
Abstract:
Purpose  The purpose of this paper is to highlight the continuing diligence required of the tax compliance function of any investment vehicle that holds commodities contracts. In addition to monitoring Congressional developments that are likely to pick up where 2010's Dodd-Frank Act left off, with the globalization of commodities trading, contracts traded on foreign exchanges are being added to the list of ÂSection 1256 contracts, which have special beneficial tax treatment under current law. Design/methodology/approach  This technical paper describes new technical rules applicable to the tax returns for taxpayers who trade in commodities contracts, as well as the need to be alert to future developments, whose likely parameters are provided. Findings  After a period of low levels of new developments, commodities taxation has come to the fore in Washington and an increasing tempo of developments is expected. Originality/value  This paper provides timely guidance from an expert on tax issues relating to tax planning and tax return preparation from commodities traders.
Purpose  The purpose of this paper is to highlight the continuing diligence required of the tax compliance function of any investment vehicle that holds commodities contracts. In addition to monitoring Congressional developments that are likely to pick up where 2010's Dodd-Frank Act left off, with the globalization of commodities trading, contracts traded on foreign exchanges are being added to the list of ÂSection 1256 contracts, which have special beneficial tax treatment under current law. Design/methodology/approach  This technical paper describes new technical rules applicable to the tax returns for taxpayers who trade in commodities contracts, as well as the need to be alert to future developments, whose likely parameters are provided. Findings  After a period of low levels of new developments, commodities taxation has come to the fore in Washington and an increasing tempo of developments is expected. Originality/value  This paper provides timely guidance from an expert on tax issues relating to tax planning and tax return preparation from commodities traders.
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Significant changes to FINRA's Know Your Customer and Suitability rules to take effect in 2011 : Table of Contents
Abstract:
Purpose  The purpose of this paper is to explain two new FINRA rules: Rule 2090 (Know Your Customer) and Rule 2111 (Suitability). Design/methodology/approach  The paper explains the two rules, the expanded requirements in the new suitability rule, and an expansion in the list of factors an associated person is required to consider as part of a customer's investment profile before making a recommendation. Findings  FINRA's new suitability rule is notable for three reasons: the revised rule covers investment strategies and explicit recommendations to hold securities; it expands the necessary factors for making a suitability determination; and it includes definitions for three specific suitability evaluations. Practical implications  Prior to the effective dates of the new rules, most likely in the Fall of 2011, firms may want to consider whether to develop additional procedures to gather customer Âinvestment profile information and whether to memorialize that information in written form. Originality/value  This paper provides practical guidance from experienced financial services lawyers.
Purpose  The purpose of this paper is to explain two new FINRA rules: Rule 2090 (Know Your Customer) and Rule 2111 (Suitability). Design/methodology/approach  The paper explains the two rules, the expanded requirements in the new suitability rule, and an expansion in the list of factors an associated person is required to consider as part of a customer's investment profile before making a recommendation. Findings  FINRA's new suitability rule is notable for three reasons: the revised rule covers investment strategies and explicit recommendations to hold securities; it expands the necessary factors for making a suitability determination; and it includes definitions for three specific suitability evaluations. Practical implications  Prior to the effective dates of the new rules, most likely in the Fall of 2011, firms may want to consider whether to develop additional procedures to gather customer Âinvestment profile information and whether to memorialize that information in written form. Originality/value  This paper provides practical guidance from experienced financial services lawyers.
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FINRA's all public panel option is now available in all customer cases : Table of Contents
Abstract:
Purpose  The purpose of this paper is to explain the rule changes contained in the new SEC Rules 12402 and 12403, which now allow claimants to choose an arbitration panel made up entirely of public administrators. Design/methodology/approach  This paper explains the background, including concern about industry arbitrators in three-person panels and the Public Administrator Pilot Program; details how three-arbitrator panels will be selected under the new rule; and assesses the consequences of the new rule. Practical implications  Among the likely consequences of the new rule are some cases going forward without industry arbitrators and an increase in the selection of chair-qualified arbitrators; among the risks are the occasional need for a randomly appointed Âcram down arbitrator. Originality/value  This paper provides practical guidance from experienced financial services attorneys.
Purpose  The purpose of this paper is to explain the rule changes contained in the new SEC Rules 12402 and 12403, which now allow claimants to choose an arbitration panel made up entirely of public administrators. Design/methodology/approach  This paper explains the background, including concern about industry arbitrators in three-person panels and the Public Administrator Pilot Program; details how three-arbitrator panels will be selected under the new rule; and assesses the consequences of the new rule. Practical implications  Among the likely consequences of the new rule are some cases going forward without industry arbitrators and an increase in the selection of chair-qualified arbitrators; among the risks are the occasional need for a randomly appointed Âcram down arbitrator. Originality/value  This paper provides practical guidance from experienced financial services attorneys.
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An analysis of the Regulated Investment Company Modernization Act of 2010 : Table of Contents
Abstract:
Purpose  The purpose of this paper is to explain the Regulated Investment Company Modernization Act of 2010, P.L. 111-325, signed into law on December 22, 2010. Design/methodology/approach  The paper summarizes the Act and provides a detailed explanation and analysis of each of the provisions in the Act. Findings  An investment company registered under the Investment Company Act of 1940 may elect to be taxed as a Regulated Investment Company (RIC) under the Internal Revenue Code. A RIC that satisfies certain additional minimum distribution requirements is generally allowed to deduct the amount of dividends paid to its shareholders in computing the RIC's taxable income and gains, with the result that the RIC's distributed net income and gains can be passed through to its shareholders free of tax at the RIC level. The Act makes a number of changes to the provisions in the Code related to RICs. Originality/value  The paper provides practical guidance from experienced financial services lawyers.
Purpose  The purpose of this paper is to explain the Regulated Investment Company Modernization Act of 2010, P.L. 111-325, signed into law on December 22, 2010. Design/methodology/approach  The paper summarizes the Act and provides a detailed explanation and analysis of each of the provisions in the Act. Findings  An investment company registered under the Investment Company Act of 1940 may elect to be taxed as a Regulated Investment Company (RIC) under the Internal Revenue Code. A RIC that satisfies certain additional minimum distribution requirements is generally allowed to deduct the amount of dividends paid to its shareholders in computing the RIC's taxable income and gains, with the result that the RIC's distributed net income and gains can be passed through to its shareholders free of tax at the RIC level. The Act makes a number of changes to the provisions in the Code related to RICs. Originality/value  The paper provides practical guidance from experienced financial services lawyers.
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Financial services remuneration in the UK : Table of Contents
Abstract:
Purpose  The purpose of this paper is to explain the final version of the Remuneration Code, published by the Financial Services Authority (FSA) in December 2010, which deals with remuneration in the financial services industry and incorporates requirements contained in the latest version of the European Union (EU) Capital Requirements Directive (CRD3). Design/methodology/approach  The paper gives an overview of the Code, focusing on its scope; the deadlines for compliance; the constraints on variable remuneration; the proportional application of the Code through the division of businesses covered by the Code into four tiers, each with different compliance requirements; and voiding provisions  i.e. provisions which render certain contractual terms on variable remuneration void if they breach Code requirements. It also summarizes the related and new obligations on disclosure of remuneration, which were published by the FSA at the same time as the Code. Findings  The overriding objective of the Code is to ensure that remuneration policies, procedures and practices do not undermine effective risk management. Practical implications  Now the details have been published and deadlines for compliance set, it is imperative that those in the financial services industry with UK operations, whether in the UK or elsewhere, start taking steps straightaway to ensure that their remuneration policies, practices and procedures are compliant with the new regulatory regime. Originality/value  The paper provides practical guidance from experienced securities lawyers.
Purpose  The purpose of this paper is to explain the final version of the Remuneration Code, published by the Financial Services Authority (FSA) in December 2010, which deals with remuneration in the financial services industry and incorporates requirements contained in the latest version of the European Union (EU) Capital Requirements Directive (CRD3). Design/methodology/approach  The paper gives an overview of the Code, focusing on its scope; the deadlines for compliance; the constraints on variable remuneration; the proportional application of the Code through the division of businesses covered by the Code into four tiers, each with different compliance requirements; and voiding provisions  i.e. provisions which render certain contractual terms on variable remuneration void if they breach Code requirements. It also summarizes the related and new obligations on disclosure of remuneration, which were published by the FSA at the same time as the Code. Findings  The overriding objective of the Code is to ensure that remuneration policies, procedures and practices do not undermine effective risk management. Practical implications  Now the details have been published and deadlines for compliance set, it is imperative that those in the financial services industry with UK operations, whether in the UK or elsewhere, start taking steps straightaway to ensure that their remuneration policies, practices and procedures are compliant with the new regulatory regime. Originality/value  The paper provides practical guidance from experienced securities lawyers.
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SEC releases study on the fiduciary duty of investment advisers and broker-dealers : Table of Contents
Abstract:
Purpose  The purpose of this paper is to explain a study released by the Securities and Exchange Commission on January 21, 2011, the ÂFiduciary Study, concerning legal and regulatory standards of care for providing investment advice and recommendations to retail customers. Design/methodology/approach  The paper explains the Fiduciary Study's concern that retail investors do not fully understand the roles played by, and the different standards of care that apply to, investment advisers and broker-dealers. It summarizes the SEC's core recommendations concerning uniform investment adviser and broker-dealer standards for conduct, avoidance of conflicts of interest, fiduciary duties, principal trading, duty of care owed to investors, personalized investment advice about securities, and investor education. It summarizes the SEC's recommendations on harmonizing investment adviser and broker-dealer regulations on advertising and other communications, use of finders and solicitors, supervision, licensing and registration of firms, licensing and continuing education requirements for professionals, and books and records. Findings  The SEC's core recommendations are designed to clarify the respective roles of, and establish uniform standards for, investment advisers and broker-dealers, so that retail investors will be better informed and protected. Originality/value  This paper provides a useful summary and practical advice from experienced financial services lawyers.
Purpose  The purpose of this paper is to explain a study released by the Securities and Exchange Commission on January 21, 2011, the ÂFiduciary Study, concerning legal and regulatory standards of care for providing investment advice and recommendations to retail customers. Design/methodology/approach  The paper explains the Fiduciary Study's concern that retail investors do not fully understand the roles played by, and the different standards of care that apply to, investment advisers and broker-dealers. It summarizes the SEC's core recommendations concerning uniform investment adviser and broker-dealer standards for conduct, avoidance of conflicts of interest, fiduciary duties, principal trading, duty of care owed to investors, personalized investment advice about securities, and investor education. It summarizes the SEC's recommendations on harmonizing investment adviser and broker-dealer regulations on advertising and other communications, use of finders and solicitors, supervision, licensing and registration of firms, licensing and continuing education requirements for professionals, and books and records. Findings  The SEC's core recommendations are designed to clarify the respective roles of, and establish uniform standards for, investment advisers and broker-dealers, so that retail investors will be better informed and protected. Originality/value  This paper provides a useful summary and practical advice from experienced financial services lawyers.
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FINRA IPO Allocation Rule; investment funds must now consider compliance : Table of Contents
Abstract:
Purpose  The purpose of this paper is to describe the Financial Industry Regulatory Authority's new rule for IPO allocation and the requirements for compliance with the rule. Design/methodology/approach  The paper provides an overview of the new FINRA Rule 5131, containing, among other things, provisions that prohibit the Âspinning of IPO shares to certain present and prospective investment banking clients. Specifically, the paper outlines the new regulations on Âquid pro quo allocations, ÂspinningÂ, Âflipping and IPO pricing and trading practices. The paper also provides detailed guidance to broker-dealers regarding their obligations under the rule. Findings  The proposed new rule is intended to prevent the following types of conduct: the allocation of IPO shares as consideration or inducement for the payment of excessive compensation for other services provided by the member; the acceptance of market orders of IPO shares prior to the development of a secondary market; the allocation of IPO shares to an executive officer or director of a company on the condition that the officer or director send the company's investment banking business to the member, or as consideration for investment banking services previously rendered; and the imposition of a penalty on registered representatives whose retail customers have Âflipped IPO shares when similar penalties have not been imposed with respect to syndicate members. Originality/value  The paper provides practical guidance from experienced regulatory lawyers regarding an important proposed change.
Purpose  The purpose of this paper is to describe the Financial Industry Regulatory Authority's new rule for IPO allocation and the requirements for compliance with the rule. Design/methodology/approach  The paper provides an overview of the new FINRA Rule 5131, containing, among other things, provisions that prohibit the Âspinning of IPO shares to certain present and prospective investment banking clients. Specifically, the paper outlines the new regulations on Âquid pro quo allocations, ÂspinningÂ, Âflipping and IPO pricing and trading practices. The paper also provides detailed guidance to broker-dealers regarding their obligations under the rule. Findings  The proposed new rule is intended to prevent the following types of conduct: the allocation of IPO shares as consideration or inducement for the payment of excessive compensation for other services provided by the member; the acceptance of market orders of IPO shares prior to the development of a secondary market; the allocation of IPO shares to an executive officer or director of a company on the condition that the officer or director send the company's investment banking business to the member, or as consideration for investment banking services previously rendered; and the imposition of a penalty on registered representatives whose retail customers have Âflipped IPO shares when similar penalties have not been imposed with respect to syndicate members. Originality/value  The paper provides practical guidance from experienced regulatory lawyers regarding an important proposed change.
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Emerging issues under interim final regulation on plan service provider fee disclosure : Table of Contents
Abstract:
Purpose  The purpose of this paper is to describe interpretive and compliance issues arising under the Labor Department's interim final regulations under the statutory exemption for the provision of services provided by Section 408(b)(2) of ERISA, which will become effective on January 1, 2012. Design/methodology/approach  The paper analyzes the published interim final regulations and considers significant comments filed in response to the proposed regulations. Findings  Effective January 1, 2012, covered service providers who rely on the statutory exemption for the provision of services provided by Section 408(b)(2) must begin complying with the interim final amendments to the regulations under Section 408(b)(2) (the ÂRegulationÂ). Among other changes, the Regulation will require service providers to provide additional disclosures of direct and indirect compensation and to identify whether they expect that they will be providing services as a fiduciary or as a registered investment adviser. The primary purpose of the Regulation is to assist plan sponsors in evaluating service provider relationships, including total compensation that will be received by the service provider and conflicts of interests to which the service provider may be subject. The Regulation will apply to both new and existing service provider arrangements on January 1, 2012. Failure to comply with the Regulation may result in the assessment of excise taxes under Section 4975 of the Internal Revenue Code unless other exemptive relief is available. Service provider arrangements may be eligible for exemptive relief under certain other statutory and administrative exemptions. Originality/value  The paper describes possible compliance issues that may arise under the Regulation and identifies and evaluates interpretive and compliance issues that have been noted since the proposed amendments were published.
Purpose  The purpose of this paper is to describe interpretive and compliance issues arising under the Labor Department's interim final regulations under the statutory exemption for the provision of services provided by Section 408(b)(2) of ERISA, which will become effective on January 1, 2012. Design/methodology/approach  The paper analyzes the published interim final regulations and considers significant comments filed in response to the proposed regulations. Findings  Effective January 1, 2012, covered service providers who rely on the statutory exemption for the provision of services provided by Section 408(b)(2) must begin complying with the interim final amendments to the regulations under Section 408(b)(2) (the ÂRegulationÂ). Among other changes, the Regulation will require service providers to provide additional disclosures of direct and indirect compensation and to identify whether they expect that they will be providing services as a fiduciary or as a registered investment adviser. The primary purpose of the Regulation is to assist plan sponsors in evaluating service provider relationships, including total compensation that will be received by the service provider and conflicts of interests to which the service provider may be subject. The Regulation will apply to both new and existing service provider arrangements on January 1, 2012. Failure to comply with the Regulation may result in the assessment of excise taxes under Section 4975 of the Internal Revenue Code unless other exemptive relief is available. Service provider arrangements may be eligible for exemptive relief under certain other statutory and administrative exemptions. Originality/value  The paper describes possible compliance issues that may arise under the Regulation and identifies and evaluates interpretive and compliance issues that have been noted since the proposed amendments were published.
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Lower courts extend Morrison but SEC asserts Dodd-Frank Act overrules Morrison for enforcement actions : Table of Contents
Abstract:
Purpose  The purpose of this paper is to assess the effects of several lower court decisions, the enactment of the Dodd-Frank Wall Street Reform & Consumer Protection Act of July 2010, and subsequent Securities and Exchange Commission statements on the extraterritorial application of Section 10 (b) of the Securities and Exchange Act of 1934, following the June 2010 US Supreme Court decision in Morrison v. National Australia Bank Ltd. Design/methodology/approach  The paper discusses the Morrison decision, three lower court decisions following Morrison, Section 929P(b) of the Dodd-Frank Act, an October 2011 SEC release supporting the Second Circuit's long-standing Âconduct and effects test, and other expert commentary, and draws interim conclusions, subject to further legal, regulatory and legislative proceedings, concerning the full impact of Morrison on US securities law. Findings  The full impact of Morrison on US securities law has yet to be seen and will be subject to regulations, legislation and court cases. The interim effect of the decisions issued by lower courts following Morrison is to provide foreign defendants with substantial immunity from private suit under US securities law over securities transactions that occur outside the USA. Originality/value  This paper provides a useful summary and practical guidance from experienced securities lawyers.
Purpose  The purpose of this paper is to assess the effects of several lower court decisions, the enactment of the Dodd-Frank Wall Street Reform & Consumer Protection Act of July 2010, and subsequent Securities and Exchange Commission statements on the extraterritorial application of Section 10 (b) of the Securities and Exchange Act of 1934, following the June 2010 US Supreme Court decision in Morrison v. National Australia Bank Ltd. Design/methodology/approach  The paper discusses the Morrison decision, three lower court decisions following Morrison, Section 929P(b) of the Dodd-Frank Act, an October 2011 SEC release supporting the Second Circuit's long-standing Âconduct and effects test, and other expert commentary, and draws interim conclusions, subject to further legal, regulatory and legislative proceedings, concerning the full impact of Morrison on US securities law. Findings  The full impact of Morrison on US securities law has yet to be seen and will be subject to regulations, legislation and court cases. The interim effect of the decisions issued by lower courts following Morrison is to provide foreign defendants with substantial immunity from private suit under US securities law over securities transactions that occur outside the USA. Originality/value  This paper provides a useful summary and practical guidance from experienced securities lawyers.
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Recommended annual review for hedge funds and other private fund managers : Table of Contents
Abstract:
Purpose  The aim of this paper is to provide hedge fund and other private fund managers with a brief recap of regulatory changes in 2010 and a reminder of certain Âbest practices they should consider as they prepare for 2011. Design/methodology/approach  The paper provides 2010 regulatory highlights, including relevant provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Pay-to-Play Rule, and amendments to Form ADV. It outlines issues for consideration in 2011, including preparation for SEC registration (if applicable), review of compliance policies and procedures, updating Form ADV, Form D and Blue Sky Filings, Âcustody rule (Rule 206(4)-2 under the Advisers Act) compliance, other regulatory filings that may be required (including Form 13F, Schedule 13D/13G, and Forms 3, 4, and 5), CFTC regulatory requirements for investment managers who trade or advise others on trading commodity futures contracts, certain tax considerations (including foreign bank, brokerage and other financial account (FBAR) reporting requirements), the Foreign Tax Compliance Act of 2009 (FACTA)), ERISA and Department of Labor considerations, fee deferral arrangements, and offering document updates. Findings  This summary is not intended to provide a complete list of an investment manager's obligations relating to its compliance with applicable rules and regulations or to serve as legal advice. It does not address any non-US or state law requirements and has not been tailored to the specific needs of a particular investment manager's business. Originality/value  This paper provides useful summary practical guidance from experienced financial institutions lawyers.
Purpose  The aim of this paper is to provide hedge fund and other private fund managers with a brief recap of regulatory changes in 2010 and a reminder of certain Âbest practices they should consider as they prepare for 2011. Design/methodology/approach  The paper provides 2010 regulatory highlights, including relevant provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Pay-to-Play Rule, and amendments to Form ADV. It outlines issues for consideration in 2011, including preparation for SEC registration (if applicable), review of compliance policies and procedures, updating Form ADV, Form D and Blue Sky Filings, Âcustody rule (Rule 206(4)-2 under the Advisers Act) compliance, other regulatory filings that may be required (including Form 13F, Schedule 13D/13G, and Forms 3, 4, and 5), CFTC regulatory requirements for investment managers who trade or advise others on trading commodity futures contracts, certain tax considerations (including foreign bank, brokerage and other financial account (FBAR) reporting requirements), the Foreign Tax Compliance Act of 2009 (FACTA)), ERISA and Department of Labor considerations, fee deferral arrangements, and offering document updates. Findings  This summary is not intended to provide a complete list of an investment manager's obligations relating to its compliance with applicable rules and regulations or to serve as legal advice. It does not address any non-US or state law requirements and has not been tailored to the specific needs of a particular investment manager's business. Originality/value  This paper provides useful summary practical guidance from experienced financial institutions lawyers.
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Recent SEC sweep highlights the need for US investment advisers seeking business from sovereign wealth funds to develop policies for FCPA compliance : Table of Contents
Abstract:
Purpose  The aim of this paper is to explain the provisions of the US Foreign Corrupt Practices Act that may be applicable to investment advisers seeking investments from foreign governments. Design/methodology/approach  The paper explains the background of the FCPA and its applicability to investment advisers, recommends policies and procedures for advisers to employ to reduce the risk of FCPA actions, recommends due diligence practices for third-party relationships, and reminds advisers seeking business opportunities outside the USA of the importance of compliance with foreign anti-bribery laws. Findings  The FCPA applies to investment advisers whenever they seek a benefit, directly or indirectly, from a foreign official, as in the course of seeking investments in a sovereign wealth fund. Practical implications  Given the SEC's increased interest in pay-to-play activities, investment advisers who are seeking investments outside the USA should carefully review their existing FCPA policies, or develop new policies if they have not done so already. Originality/value  The paper provides practical guidance from experienced financial services lawyers.
Purpose  The aim of this paper is to explain the provisions of the US Foreign Corrupt Practices Act that may be applicable to investment advisers seeking investments from foreign governments. Design/methodology/approach  The paper explains the background of the FCPA and its applicability to investment advisers, recommends policies and procedures for advisers to employ to reduce the risk of FCPA actions, recommends due diligence practices for third-party relationships, and reminds advisers seeking business opportunities outside the USA of the importance of compliance with foreign anti-bribery laws. Findings  The FCPA applies to investment advisers whenever they seek a benefit, directly or indirectly, from a foreign official, as in the course of seeking investments in a sovereign wealth fund. Practical implications  Given the SEC's increased interest in pay-to-play activities, investment advisers who are seeking investments outside the USA should carefully review their existing FCPA policies, or develop new policies if they have not done so already. Originality/value  The paper provides practical guidance from experienced financial services lawyers.
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FSA discussion paper on product intervention : Table of Contents
Abstract:
Purpose  The aim of this paper is to discuss the implications of the UK Financial Services Authority (FSA) January 25, 2011 discussion paper, DP11/1 Product Intervention. Design/methodology/approach  The paper discusses the FSA's previous regulatory approach; the limited usefulness of disclosure in consumer protection; the impact of trends toward a direct adviser fee structure and the phasing out of commission-based remuneration; the FSA's perceived need to become more directly involved in the product development process; various ways in which the FSA might intervene including product pre-approval, product banning, and price intervention; and possible limitations on the FSA's power to intervene. Findings  The key issues raised by the FSA discussion paper are a new interventionist stance taken by the FSA and prospectively by its successor the Financial Conduct Authority (FCA); the increased focus on the product itself (in addition to disclosure and point of sale); and the possible extension in the scope of the FSA's existing powers. Originality/value  The paper provides practical insight from experienced financial services lawyers.
Purpose  The aim of this paper is to discuss the implications of the UK Financial Services Authority (FSA) January 25, 2011 discussion paper, DP11/1 Product Intervention. Design/methodology/approach  The paper discusses the FSA's previous regulatory approach; the limited usefulness of disclosure in consumer protection; the impact of trends toward a direct adviser fee structure and the phasing out of commission-based remuneration; the FSA's perceived need to become more directly involved in the product development process; various ways in which the FSA might intervene including product pre-approval, product banning, and price intervention; and possible limitations on the FSA's power to intervene. Findings  The key issues raised by the FSA discussion paper are a new interventionist stance taken by the FSA and prospectively by its successor the Financial Conduct Authority (FCA); the increased focus on the product itself (in addition to disclosure and point of sale); and the possible extension in the scope of the FSA's existing powers. Originality/value  The paper provides practical insight from experienced financial services lawyers.
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