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Investor-Related Regulation

||Investor-Related Regulation

By Some Measures, US Corporate Transparency Lags Behind China, Russia

May 2014 In order to have efficient markets, stakeholders must have access to clear and accurate data and related disclosures that allow for insight and interpretation of that data.  The Western world has long touted the importance and benefits of such corporate transparency and has numerous organizations and government agencies tasked with defining appropriate practices [...]

Investor-Related Regulation, Other|

PCAOB Chinese Agreement Will Not Provide Needed Transparency Into Chinese Stocks

June 2013 In order to address ongoing concerns with transparency into the underlying financials of Chinese companies, the Public Company Accounting Oversight Board (PCAOB) recently announced that it entered into a Memorandum of Understanding (MOU) with the China Securities Regulatory Commission (CSRC) and the Ministry of Finance (MOF). While this is an important step forward, [...]

Investor-Related Regulation, Other|

SEC Inspection of Credit Rating Agencies Shows Drastic Change Needed

January 2013 Credit rating agencies (more formally known as Nationally Recognized Statistical Rating Organizations or “NRSROs”) provide ratings which are used for a variety of regulatory purposes and purport to provide information regarding the relative safety of various investment instruments.  The agencies have been under attack for what seems like forever, notably for collecting huge [...]

Investor-Related Regulation, Other|

PCAOB To Prevent Licensing Of Audit Firms From Certain Countries

October 2010 On October 7, 2010, the Public Company Accounting Oversight Board (PCAOB) announced it will start to refuse registration for auditors based in jurisdictions where American inspectors are not allowed to carry out inspections. This regulatory change will make it difficult on companies in these countries to use U.S. capital markets. The PCAOB’s change [...]

Investor-Related Regulation, Other|

SEC May End Brokerage Mandatory Arbitrations

October 2010 A little-known provision within the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 contains a provision that could dramatically impact how security investment disputes are resolved between brokers and their customers. The Securities and Exchange Commission (SEC) now has the power to remove mandatory arbitration language that is currently part of [...]

Investor-Related Regulation, Other|

DOL Issues Significant New Requirements For 401(K) Plans

August 2008 In late July, the U.S. Department of Labor (DOL) issued proposed regulations that require plan fiduciaries to disclose plan- and investment-related information for 401(k) plans and other participant-directed individual account plans. The regulations, which ran 31 pages in the Federal Register, require uniform disclosures intended to ensure that participants are (i) made aware [...]

Investor-Related Regulation, Other|

Change In “Accredited Investor” Definition Will Cause The Investor Pool For Private Financings To Shrink

August 2010 Issuers conducting private offerings of securities often rely on Regulation D as the exemption from the registration requirements of the federal Securities Act of 1933. When raising money, most hedge funds, private equity funds, and private real estate investment vehicles, as well as those arranging angel financing, generally restrict themselves to “accredited investors”. [...]

Investor-Related Regulation, Other|

Surprise! – U.S. Chamber Of Commerce Seeks More Government Control Over SROs

August 2011 A surprising call for additional government regulation occurs in a report entitled “The Unfinished Agenda”.  The U.S. Chamber of Commerce states that Congress should have (but did not) alter the existing regulation of so-called self-regulatory organizations (SROs) as part of its recent changes in financial regulation passed through the Dodd-Frank Act.  According to [...]

Investor-Related Regulation, Other|

Plan Sponsors Must Now Obtain Information About Usually “Hidden” Costs

July 2010 The Department of Labor (DOL) issued “interim final” fee disclosure regulations that apply to ERISA pension plans, including most notably 401(k) plans. The new regulation requires each plan service provider to disclose specified information in writing to the plan sponsor. The disclosed information includes: A description of the services to be provided; All [...]

Investor-Related Regulation, Other|

SEC Changes Short-Selling Rules

June 2007 Short selling is the practice of borrowing stock (usually from a broker-dealer or institutional investor), then selling it in anticipation that the stock price will go down. Because the short-seller has borrowed the stock, he benefits when the stock price declines, allowing the stock to be subsequently purchased (and the borrowed security returned) [...]

Investor-Related Regulation, Other|

SEC Takes Initial Measures To Avoid A Second Flash Crash. More Changes Are Coming

June 2010 The “flash crash” on May 6, 2010 is the biggest one-day intraday decline in Dow Jones Industrial Average history. The "flash crash" saw the Dow Jones Industrial Average plummet almost 1,000 points before partially recovering. Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission told a Senate banking committee [...]

Investor-Related Regulation, Other|

More Is Needed To Improve Credit Rating Agency Conclusions

June 2010 Ratings of debt instruments are an integral part of U.S. financial markets. Reliance on these ratings is increasing, but their reliability is pathetic. Practically every issuer involved in a major unexpected financial collapse received high ratings immediately before the failure. The most recent and important example involves the failed AAA-rated collateralized debt obligations [...]

Investor-Related Regulation, Other|

SEC Proposes Limitations On Hedge And Private Equity Funds’ Money-Raising Activities

January 2007 The United States Securities and Exchange Commission (SEC) proposed new rules designed to limit investors who could participate in hedge funds and other pooled investment vehicles such as private equity funds. The new proposals respond to the ruling in Goldstein v. SEC (451 F.3d 873, D.C. Cir. 2006), which struck down the SEC's [...]

Investor-Related Regulation, Other|

U.S. Trading On Foreign Exchanges Will Become Easier

April 2008 If regulators are able reach a "mutual recognition" agreement, it would mark a radical shift in how international markets are overseen. The Securities and Exchange Commission (SEC) currently requires foreign trading firms to comply with its rules even though they are fully supervised in their home market. Consequently, a foreign exchange conducting business [...]

Investor-Related Regulation, Other|