Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds.
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The Second Trump Administration: Legal News and Regulatory Developments
The Katten team is dedicated to keeping you informed about the latest legal and regulatory changes during President-elect Donald Trump's second term. Our "Second Trump Administration: Legal News and Regulatory Developments" resource center provides comprehensive analysis, authoritative commentary and concise summaries of both anticipated and recent developments. This resource is designed to help you adeptly and efficiently navigate the evolving legal and business environment. Visit "The Second Trump Administration: Legal News and Regulatory Developments" resource center. To receive this content directly via email, subscribe here.
US Federal Court Vacates SEC's Dealer Rule
By Susan Light, Wayne Aaron, James Brady
On November 21, US District Judge Reed O'Connor in Fort Worth, Texas, vacated the rule recently adopted by the SEC that sought to significantly expand entities that may be required to register as a "dealer" or a "government securities dealer" (Dealer Rule). The decision to vacate the rule is noteworthy, as the Court did not remand the case to the SEC, which would have left the future status of "dealer" regulation unclear. Read about District Judge O'Connor's decision.
Not-So-New News Flash? Change in Administration Ushers Back a Deregulatory Agenda – Implications for Investment Advisers
By Adam Bolter, David Dickstein, Christian Hennion, Richard Marshall
While most industry observers agree that the transition to the new presidential administration will bring with it a deregulatory agenda, members of Katten's asset management regulatory team compiled their Top-5 Holiday Wish List (in no particular order): [Spoiler Alert: There's a pretty heavy focus on private funds.] Read Katten's Top-5 Holiday Wish List.
Stephen Morris Shares Thoughts on CME Grace Period Clarification
Financial Markets and Funds Partner Stephen Morris spoke with Risk.net regarding new guidance from the Chicago Mercantile Exchange (CME) clarifying the meaning of a longstanding CME rule, 930.K. The clarification follows fines imposed by CME on four CME clearing members for including unconditional grace periods in client contracts, which CME viewed as impermissibly restricting clearing member discretion to liquidate accounts not in compliance with applicable margin requirements. Read about Steve's comments.
Post-Election Shift: Securities Industry Anticipates Business-Friendly SEC Under Trump Administration
By Wayne Aaron, James Brady, Susan Light
Post-election, securities industry professionals are pondering the new administration's impact on the regulatory environment and their businesses. While there is no sure outcome, many comfortably predict that under the Trump administration, the Securities and Exchange Commission (SEC) will be a more business-friendly environment, particularly with respect to digital assets. Read Katten's article on the new administration.
Alpine v. FINRA Big News
By Susan Light, Wayne Aaron
On November 22, the US Court of Appeals for the District of Columbia Circuit granted Alpine a preliminary injunction, ruling that the Financial Industry Regulatory Authority (FINRA) cannot expel Alpine without the SEC's review. Interestingly, the court stated that "Alpine has also demonstrated a likelihood of success on its argument that the lack of governmental review prior to expulsion violates the private nondelegation doctrine." That doctrine generally requires that a private entity statutorily delegated to perform a regulatory role be supervised by a government actor. Read about the Alpine case.
New Administration, New Direction? What Swap Dealers Can Expect From CFTC Post-2024 Election
By Alexander Kim, Carl Kennedy
The 2024 US presidential elections may signal a shift in the Commodity Futures Trading Commission's (CFTC) regulatory and enforcement approach. Under the incoming Trump administration, the CFTC could steer toward a more cooperative relationship with regulated entities, representing a potential shift in regulatory approach. For swap dealers, these potential changes could herald a more business-friendly regulatory environment with increased emphasis on practical oversight rather than strict enforcement. Read about potential changes to CFTC swap dealer-related priorities.
Expected CFTC Implementations Post-2024 Election: Key Considerations for Futures Commission Merchants
By Carl Kennedy, Stephen Morris, Eli Krasnow, Nicholas Gervasi
The 2024 US elections may signal a shift in the policy orientation of other federal financial regulators, but at the Commodity Futures Trading Commission (CFTC or Commission), at least in the short-term, the most significant Commission actions impacting the operations of futures commission merchants (FCMs) are likely to be the adoption of final rules proposed the CFTC within the last year. Beyond the short-term, however, more impactful changes for FCMs are starting to come into view. Read about potential CFTC changes to FCM-related priorities.
Wayne Aaron Quoted by FinOps Report on SEC's T+1 Settlement Requirements
In an article by FinOps Report, Wayne M. Aaron, partner and co-chair of Katten's Broker-Dealer Regulation practice, discussed the requirements applicable to implementing the move to T+1 settlement and the supervisory and other obligations of broker-dealer operations departments in the trade affirmation process. Read about Wayne's comments.
EU/UK
Brigitte Weaver Discusses the Rigorous Compliance Demands of the EU's CS3D With FinOps Report
Employment Litigation and Counseling Senior Associate Brigitte Weaver spoke with FinOps Report about the EU's new Corporate Sustainability Due Diligence Directive (CS3D), which mandates that financial firms and other businesses operating in the EU enforce human rights, biodiversity and environmental standards throughout their supply chains. Brigitte highlighted the differences between the UK's Modern Slavery Act and the CS3D, stating, "Unlike the CS3D, the UK's Modern Slavery Act does not require firms to actually perform due diligence on suppliers. Firms only have to report on what actions they have or have not taken." Read about Brigitte's comments.
UK Parliamentary Group Publishes "Hard-Hitting" Report on the FCA
By Carolyn Jackson, Nathaniel Lalone, Neil Robson, Christopher Collins, Ciara McBrien, Sara Portillo
The UK's All-Party Parliamentary Group (APPG) on investment fraud and fairer financial services (a group of thirty Members of Parliament and a dozen members of the House of Lords) has published a press release and a "hard-hitting" report (Report) following its call for evidence (Call for Evidence) regarding current issues with the UK's financial regulator, the Financial Conduct Authority (FCA). The Report is based on the analysis of the written testimonies of 174 individuals and has resulted in the FCA being described widely as "incompetent at best, dishonest at worst." Read about the UK Parliamentary Group report.
ICYMI
Here's a look back at recent client advisories from Katten.
"Breaking News: Federal District Court Halts Corporate Transparency Act Enforcement Nationwide," December 4, 2024
"SEC Division of Examinations Highlights Common Deficiencies in Registered Investment Company Core Examination Areas," November 12, 2024
"Foreign Listed Stock Index Futures and Options Approvals November 2024," November 8, 2024
