http://www.davispolk.com/ en-us © 2011 Davis Polk & Wardwell LLP Wed, 19 Jun 2013 06:45:20 GMT Wed, 19 Jun 2013 06:45:20 GMT On June 5, 2013, the Securities and Exchange Commission (the “SEC”) proposed amendments to rules under the Investment Company Act of 1940 (the “Investment Company Act”) and related requirements that govern money market funds (“MMFs”). The SEC’s proposal is the latest action taken by U.S. regulators as part of the ongoing debate about systemic risks posed by MMFs and the extent to which previous reform efforts have addressed these concerns. /files/Publication/ae8f9fa2-0145-4556-b440-8d86f9f49d13/Presentation/PublicationAttachment/310daf40-b934-45c8-88a0-8e0b61fe0c23/06.11.2013.Money.Market.pdf Publication ae8f9fa2-0145-4556-b440-8d86f9f49d13 Tue, 11 Jun 2013 00:00:00 GMT The Alternative Investment Fund Managers Directive (the Directive) entered into force on July 21, 2011 with E.U. Member States (Member States) having until July 22, 2013 to implement it. The Directive broadly aims to create a single harmonized pan-European regulatory framework for E.U.-established managers (Managers) of alternative investment funds (AIFs). It also sets out a regime for the marketing in the E.U. of both E.U. and non-E.U. AIFs by non-E.U. Managers. This memorandum focuses on the specific provisions of the Directive and the U.K.’s implementing regulations (Draft Regulations) applicable to non-E.U. Managers seeking to market non-E.U. AIFs to E.U. investors. /files/Publication/3c371fa9-2566-48d9-9cc1-bacb377ebeaf/Presentation/PublicationAttachment/b36f0738-b292-460d-8d88-c2800b35132d/06.04.13.Alternative.pdf Publication 3c371fa9-2566-48d9-9cc1-bacb377ebeaf Tue, 04 Jun 2013 00:00:00 GMT http://www.davispolk.com/resources/detail.aspx?publication=1383 Publication b7ac45be-5985-4dda-ab08-c6414db29a9d Tue, 28 May 2013 00:00:00 GMT http://www.davispolk.com/news/detail.aspx?news=2275 News 9a30ece0-719f-422c-8173-bb7da11e23ce Fri, 24 May 2013 00:00:00 GMT SEC Rules and Regulations SEC Staff Responds to Questions About Form PF SEC Requests Information to Inform Consideration of Uniform Fiduciary Standard for Broker-Dealers and Investment Advisers Industry Update SEC Official Discusses Broker-Dealer Registration Issues for Private Fund Advisers NFA Amends Rules to Simplify Reporting Requirements for CPO and CTA Members Litigation SEC Charges Former Public Company Employee in Expert-Network Insider Trading Case SEC Charges Mutual Fund Directors and Service Providers for Deficiencies Relating to Investment Advisory Contract Approvals /files/Publication/a12a4dd7-3282-4dc0-87f9-e3ec34b01fc3/Presentation/PublicationAttachment/7dcf3ce4-ef7f-455f-ac1e-e5d4c3b059dd/051613.IM.Reg.Update.pdf Publication a12a4dd7-3282-4dc0-87f9-e3ec34b01fc3 Thu, 16 May 2013 00:00:00 GMT On May 1, 2013, the Securities and Exchange Commission took long-awaited action to propose rules governing cross-border activities in security-based swaps. The SEC’s proposal, developed over the course of more than two years, reflects a holistic approach that differs in key respects from that taken by the Commodity Futures Trading Commission with respect to transnational swap activities. In light of the far-ranging significance of its cross-border proposal, the SEC has reopened comment periods for many of its previously proposed security-based swap regulations and its policy statement on the sequencing of compliance with these rules. This memorandum provides an overview of key provisions of the SEC’s proposal, highlighting the most important differences from the CFTC Proposal. /files/Publication/78d6def3-0e03-45cc-a376-f90ec865a71c/Presentation/PublicationAttachment/5654ec69-c2b6-4952-9b6c-f9a2b0ef9948/051613.Cross-Border.pdf Publication 78d6def3-0e03-45cc-a376-f90ec865a71c Thu, 16 May 2013 00:00:00 GMT On May 2, 2013, the Securities and Exchange Commission (the “SEC”) settled charges that the five trustees (the “Trustees”) of two registered series trusts (the “Trusts”), the Trusts’ CCO-service provider, Northern Lights Compliance Services (“NLCS”), and the Trusts’ fund administrator, Gemini Fund Services, LLC (“GFS”) violated the Investment Company Act of 1940 (the “Investment Company Act”) in 2009 and 2010. The charges against the Trustees arose from (i) the Trusts’ disclosure to investors regarding the Trustees’ approval of investment advisory contracts and (ii) the Trustees’ approval of compliance manuals of investment advisers to the Trusts. Although this action did not result in the imposition of a monetary penalty on the Trustees, the Trustees consented to the entry of an SEC cease-and-desist order against them. The inclusion of the Trustees in this action highlights the SEC’s apparent newfound willingness to bring enforcement actions against registered fund directors and may also be a warning to other directors. /files/Publication/8d6e052c-3a81-490f-9af7-0c3b1e343a17/Presentation/PublicationAttachment/f8093865-17bf-4300-9a65-0e4d9ede8a4c/05.13.14.Northern.Lights.pdf Publication 8d6e052c-3a81-490f-9af7-0c3b1e343a17 Mon, 13 May 2013 00:00:00 GMT On April 22, 2013, the Financial Industry Regulatory Authority (“FINRA”) issued an Interpretive Letter to ALPS Distributors, Inc. setting forth guidance regarding the use of pre-inception index performance (“PIP”) data for exchange-traded products (“ETPs”) in institutional communications. /files/Publication/cf131f90-efc8-4b52-a59e-6da2a4ff5840/Presentation/PublicationAttachment/0e3e142f-0a99-4957-8536-6f1b811b3758/05.02.13.FINRA.Releases.pdf Publication cf131f90-efc8-4b52-a59e-6da2a4ff5840 Thu, 02 May 2013 00:00:00 GMT SEC Rules and Regulations CFTC and SEC Adopt Identity Theft Rules SEC Staff Responds to Inquiries About Filing Requirements for Certain Electronic Communications /files/Publication/cfe95590-6901-416f-baf2-0167ccc399ba/Presentation/PublicationAttachment/321f9d17-fb57-4224-ab7b-06087b3787d9/04.29.13.IMG.Update.pdf Publication cfe95590-6901-416f-baf2-0167ccc399ba Mon, 29 Apr 2013 00:00:00 GMT Almost half a decade after the onset of the financial crisis, populist sentiment and the resulting political environment continue to fuel stricter regulation of executive and director compensation, with the latest wave in Europe including substantive restrictions on compensation in the financial services industry and “say-on-pay” initiatives (i.e., initiatives providing for shareholder approval of compensation). This memorandum describes these recent European compensation developments, namely: The so-called “banker bonus cap” – substantive limits on the amount of variable compensation that can be paid to certain employees at financial institutions; and Say-on-pay developments in the E.U. and Switzerland. /files/Publication/f3691634-6c28-4c9a-bbbd-bba7a8ad07e0/Presentation/PublicationAttachment/2679f2aa-634f-4093-9a35-c44b9c147edb/04.23.12.European.Compensation.pdf Publication f3691634-6c28-4c9a-bbbd-bba7a8ad07e0 Tue, 23 Apr 2013 00:00:00 GMT Davis Polk is advising the senior management of Strategic Partners, Credit Suisse’s dedicated secondary private equity business, on the sale of Strategic Partners to Blackstone. http://www.davispolk.com/news/detail.aspx?news=2215 News 98826236-3826-4bc5-b5a5-e57a30a92cc3 Mon, 22 Apr 2013 00:00:00 GMT http://www.davispolk.com/news/detail.aspx?news=2213 News 13430d0e-30e1-4d60-b812-4db182733a54 Fri, 19 Apr 2013 00:00:00 GMT Davis Polk Partners Bonnie Chan, Kirtee Kapoor and Mark Lehmkuhler will be among the speakers at Practising Law Institute’s First Annual Institute on Corporate and Securities Law in Hong Kong. http://www.davispolk.com/events/detail.aspx?event=400 Event 442aaa69-b8bc-4c7e-b9c4-bf740697367e Thu, 18 Apr 2013 12:00:00 GMT http://www.davispolk.com/events/detail.aspx?event=446 Event 62118015-226c-452a-aa3f-790505ec0b77 Fri, 12 Apr 2013 12:00:00 GMT In the March 2013 issue of The Investment Lawyer , Part 1 of this article addressed the process by which investment funds or their advisers could be designated as systemically important financial institutions (SIFIs), including the factors that regulators have indicated they would consider in making a SIFI designation. Part 2 of this article further discusses this process, as well as the potential consequences of such a designation for those designated, as well as for the industry as a whole. /files/Publication/496c5f23-8c9a-48ae-bd95-078e31e4b632/Presentation/PublicationAttachment/5585c767-083c-48ed-b549-0d07d4cc1515/IL_April_2013_Rowland_article.pdf Publication 496c5f23-8c9a-48ae-bd95-078e31e4b632 Mon, 01 Apr 2013 00:00:00 GMT SEC Rules and Regulations SEC Staff Responds to Questions About Form PF Industry Update SEC Issues Risk Alert Identifying Significant Deficiencies in Compliance with the Custody Rule SEC’s National Examination Program Releases its Examination Priorities for 2013 NFA Amendment Clarifies Rule Prohibiting Loans by Commodity Pools to CPOs ' Litigation Supreme Court Overturns Second Circuit Ruling and Confirms that the Statute of Limitations for SEC Penalty Claims Begins when the Fraud Occurs SEC Charges Hedge Fund Adviser with Fraudulently Raising Capital by Misrepresenting a Fund’s Structure to Investors FINRA Orders Broker-Dealer to Pay more than $11 Million in Restitution and Fines for Late Pricing of Paper Mutual Fund Orders /files/Publication/7aa65c24-8485-483b-ae3f-01310a78d19e/Presentation/PublicationAttachment/defb82d4-7473-4409-8e52-09af50198e06/03.25.13.IMG.Update.pdf Publication 7aa65c24-8485-483b-ae3f-01310a78d19e Mon, 25 Mar 2013 00:00:00 GMT Davis Polk is advising Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) on its €1.935 billion sale of approximately 90.01% of the equity in Robeco Groep N.V. to ORIX Corporation. http://www.davispolk.com/news/detail.aspx?news=2106 News b4caed88-406f-4b14-afdb-e6fb266e7f5d Wed, 13 Mar 2013 00:00:00 GMT As a result of the Dodd-Frank Act, the over-the-counter derivatives markets have become subject to significant new regulatory oversight. As the markets respond to these new regulations, the menu of derivatives instruments available to asset managers, and the costs associated with those instruments, will change significantly. As the first new swap rules have come into effect in the past several months, market participants have started to identify risks and costs, as well as new opportunities, arising from this new regulatory landscape. This memorandum is designed to provide asset managers with background information on key aspects of the swap regulatory regime that may impact their derivatives trading activities. The memorandum highlights practical considerations and potential opportunities for asset managers, as they assess the impact these regulations will have on their trading activities. /files/Publication/3da4a30d-abe5-49a6-9363-01c2f424b433/Presentation/PublicationAttachment/061b111b-c2c6-4d21-b8e9-4d183b49161d/An_Asset_Managers_Guide_to_Swap_Trading.pdf Publication 3da4a30d-abe5-49a6-9363-01c2f424b433 Mon, 11 Mar 2013 00:00:00 GMT http://www.davispolk.com/events/detail.aspx?event=427 Event 4a44ec0a-22e5-4a51-be79-0663f37d63b7 Thu, 07 Mar 2013 12:00:00 GMT While Washington’s power to regulate large banks and insurance companies as systemically important financial institutions (SIFIs) under the systemic importance regime established by the Dodd-Frank Act has received a significant amount of attention over the past two years, the prospect that this regime might be applied to investment funds and their advisers has garnered relatively little discussion outside of the money market fund context. /files/Publication/cc040be7-3426-4e3c-a555-0ef1fd595b25/Presentation/PublicationAttachment/a52b978d-dd91-4238-8f85-1032ecf3c697/IL_March_2013_Rowland_article.pdf Publication cc040be7-3426-4e3c-a555-0ef1fd595b25 Fri, 01 Mar 2013 00:00:00 GMT SEC Rules and Regulations  SEC Issues Guidance on New Iran Disclosure Requirements SEC Extends No-Action Relief to Broker-Dealers Who Rely on Registered Investment Advisers to Perform Customer Identification Program Obligations Industry Update European Commission Adopts AIFMD Level 2 Regulations FinCEN Extends FBAR Filing Deadline for Certain Employees and Officers SEC Official Discusses Enforcement Priorities in the Private Fund Space SEC Expected to Move Forward with Uniform Fiduciary Standard Litigation First Circuit Considers Current and Prospective Business Relationships When Evaluating Independence of Fund Directors in Shareholder Derivative Cases /files/Publication/fa297502-7ce5-4099-96a6-f32ef07baba2/Presentation/PublicationAttachment/58ba7c2a-1f6f-4ff5-a05e-44c9795a7dd4/022713.IMG.Update.pdf Publication fa297502-7ce5-4099-96a6-f32ef07baba2 Wed, 27 Feb 2013 00:00:00 GMT The Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) on February 15 released a second consultative paper on margin requirements for uncleared derivatives (the “Second Consultative Paper”). The proposal is intended to establish minimum standards for uncleared derivatives margin rules, which would be implemented by national regulators. Comments on the Second Consultative Paper are due by March 15, 2013. /files/Publication/007763d1-389b-4629-8fe5-d273c97d3fbc/Presentation/PublicationAttachment/737b9585-1736-48b9-8553-01ed6437b4ed/02.25.13_IOSCO.pdf Publication 007763d1-389b-4629-8fe5-d273c97d3fbc Mon, 25 Feb 2013 00:00:00 GMT Davis Polk is advising Crestview Partners on its $246 million acquisition of Victory Capital Management Inc. from KeyCorp. http://www.davispolk.com/news/detail.aspx?news=2080 News 5b30e134-c684-4424-bca4-dbdf9cfb0138 Thu, 21 Feb 2013 00:00:00 GMT Davis Polk is advising Artio Global Investors Inc.’s Strategic Review Committee of independent directors in connection with Artio Global’s acquisition by Aberdeen Asset Management PLC for $2.75 in cash per share. http://www.davispolk.com/news/detail.aspx?news=2075 News bd020302-167c-4aa4-ae70-3b5e9fa7dbc2 Fri, 15 Feb 2013 00:00:00 GMT /files/Publication/22016c95-f5df-4d87-864f-28a3e74d1269/Presentation/PublicationAttachment/719d7ad3-c793-4aba-adf6-3e7226f14637/021513.FINRA.pdf Publication 22016c95-f5df-4d87-864f-28a3e74d1269 Fri, 15 Feb 2013 00:00:00 GMT http://www.davispolk.com/resources/detail.aspx?publication=1359 Publication fc7abebd-d522-40f6-a0b9-11d022feeae5 Tue, 12 Feb 2013 00:00:00 GMT http://www.davispolk.com/resources/detail.aspx?publication=1321 Publication 21c63b17-3898-424b-94dc-2a307f286508 Thu, 24 Jan 2013 00:00:00 GMT On January 10, 2013, the Financial Industry Regulatory Authority (“FINRA”) announced that it is inviting prospective crowdfunding funding portals to voluntarily submit information to FINRA about their proposed business models, activities and operations. According to FINRA, the purpose of the information collection is to help FINRA become more familiar with the funding portal community and to assist it in developing rules specific to funding portals. /files/Publication/8be8142a-8bd2-41d2-a5c1-5c3d5b5b452a/Presentation/PublicationAttachment/680d46ee-b69d-437c-af1f-5d5de2df5386/012313_Crowdfuncing.pdf Publication 8be8142a-8bd2-41d2-a5c1-5c3d5b5b452a Wed, 23 Jan 2013 00:00:00 GMT SEC Rules and Regulations SEC Lifts Moratorium on Approving Actively Managed ETFs That Invest in Derivatives SEC Extends Temporary Rule 206(3)-3T Regarding Principal Transactions with Certain Advisory Clients Industry Update  Annual Affirmation Requirement for Certain Exempt CPOs and CTAs Bill to Merge SEC and CFTC Introduced in the House of Representatives Litigation  District Court Dismisses ICI and Chamber of Commerce Challenge to CFTC Amendments Affecting Registered Investment Companies SEC Settles Charges Against a Business Development Company and Its Executives for Overvaluing Assets and for Internal Control Failures SEC Settles Charges Against Investment Adviser for Misleading Use of Hypothetical Back-Tested Performance Models /files/Publication/1cbaa9b8-212f-4905-a675-4c6ac3993f43/Presentation/PublicationAttachment/bba04c21-716a-4ac7-b1e6-522186309beb/012213_IMG_Reg_Update.pdf Publication 1cbaa9b8-212f-4905-a675-4c6ac3993f43 Tue, 22 Jan 2013 00:00:00 GMT On December 21, 2012, the SEC unanimously adopted rules required by the Dodd-Frank Act that require broker-dealers and certain other market participants to search for holders of securities with whom they have lost contact and provide notifications to persons who have not negotiated checks that have been sent to them. /files/Publication/10f41c50-5f62-4ad2-b282-1b3946d5254c/Presentation/PublicationAttachment/517c44be-7108-40eb-9447-1c888ad003e3/010313_SEC_Adpots.pdf Publication 10f41c50-5f62-4ad2-b282-1b3946d5254c Thu, 03 Jan 2013 00:00:00 GMT http://www.davispolk.com/news/detail.aspx?news=1999 News 14b6a27f-1b9b-497d-9cc6-05907f3cd009 Wed, 02 Jan 2013 00:00:00 GMT SEC Rules and Regulations SEC Staff Responds to Questions About Form PF SEC Releases Guidance on Advisers Act Exemption for CFTC-Registered Investment Advisers that Advise Private Funds SEC Adopts New Credit Quality Standard for BIDCOs Relying on Section 6(a)(5) of the Investment Company Act SEC Announces List of Federal Securities Law Rules to be Reviewed Over the Next 12 Months Industry Update CFTC Grants Registration Relief for Family Offices, Funds of Funds and Business Development Companies FSOC Issues Proposed Recommendations for Money Market Mutual Fund Reform Director of the OCIE Speaks on the Significance of Conflicts of Interest and Risk Governance FINRA Announces Arbitration for Investment Advisers that are not FINRA-Regulated Firms   Litigation Court Ruling Addresses Pension “Controlled Group” Liability for Private Equity Funds Jury Issues Mixed Verdict in Reserve Primary Fund Trial SEC Charges Mutual Fund Directors for Inadequate Valuation Oversight /files/Publication/3d18a830-89ad-44e1-a92f-c7add34ac7b3/Presentation/PublicationAttachment/b78cfe9d-588a-40c6-98e1-e27c0bd137f0/12.20.12_IMG_Update.pdf Publication 3d18a830-89ad-44e1-a92f-c7add34ac7b3 Thu, 20 Dec 2012 00:00:00 GMT On December 10, 2012, the Securities and Exchange Commission (the “SEC”) charged eight former directors (the “Directors”) of five Morgan Asset Management (“MAM”) registered investment companies (“RICs”) with securities laws violations for their role in valuing the RICs’ securities from March 2007 through August 2007. Section 2(a)(41)(B) of the Investment Company Act of 1940, as amended, requires that when market quotations are not readily available in respect of securities held by RICs, the securities must be given a fair value as determined in good faith by the RICs’ boards of directors. Pursuant to SEC guidance, boards of directors are permitted to delegate their responsibility for calculating fair values, pursuant to board-approved policies and procedures. According to the SEC’s Order Instituting Public Administrative and Cease-And-Desist Proceedings (the “Order”), RICs managed by MAM, which included one open-end RIC that had three series and four closed-end RICs, had approximately $3.85 billion in assets under management. The RICs’ assets included mortgage-backed securities and other types of structured products. According to the Order, the Directors delegated their asset pricing duties to MAM and, pursuant to the RICs’ policies and procedures (the “Valuation Procedures”), the MAM valuation committee (the “Valuation Committee”) determined the fair value of securities that did not have available quotations. According to the Order, fair-valued securities made up more than 60 percent of the net asset value for most of the RICs. /files/Publication/782af81b-2fc0-4b4d-8bde-3c462a835c31/Presentation/PublicationAttachment/253fd5bb-db40-42ae-8f35-331622d83d26/12.14.12_Mutal_Fund.html Publication 782af81b-2fc0-4b4d-8bde-3c462a835c31 Mon, 17 Dec 2012 00:00:00 GMT Davis Polk advised the Second Swedish National Pension Fund, Andra AP-fonden (AP2) on its investment in a $1.8 billion portfolio of commercial office buildings jointly owned by the South Korean National Pension Fund (NPS), affiliates of Tishman Speyer and the Government of Singapore Investment Corporation. http://www.davispolk.com/news/detail.aspx?news=1937 News 7accfb14-c7c9-4600-852d-e19613318d93 Thu, 29 Nov 2012 00:00:00 GMT SEC Rules and Regulations SEC Proposes Extension of Temporary Rule 206(3)-3T Regarding Principal Transactions with Certain Advisory Clients Industry Update SEC Announces Presence Exams of Newly Registered Investment Advisers Additional Guidance Extends FATCA Deadlines and Expands the Scope of “Grandfathered” Obligations Investor Advisory Committee Submits Recommendations to the SEC on the SEC’s Proposal to Eliminate the General Solicitation Ban SEC Staff Issues Report on Authority to Enforce the Anti-Evasion Rule Under Section 12(g) of the Exchange Act NFA Waives Series 3 Proficiency Exam Requirement for Associated Persons of Certain Registered CPOs and CTAs Speech by SEC Chairman on New Technology Initiatives to Detect Suspicious Trading Litigation SEC Charges Hedge /files/Publication/9ab1c06c-f3f8-414b-b9e4-19d72a440a0a/Presentation/PublicationAttachment/1ef2e466-3fd9-4903-998e-3d139888e58f/112712_IM_REG_Update.pdf Publication 9ab1c06c-f3f8-414b-b9e4-19d72a440a0a Tue, 27 Nov 2012 00:00:00 GMT On November 16, 2012, the Secretary of the Treasury issued a much awaited determination that foreign exchange (“FX”) swaps and forwards should not be regulated as swaps under the Commodity Exchange Act for most purposes, including registration, mandatory clearing and trade execution, and margin. As was the case in the proposed determination, FX derivatives other than FX swaps and forwards, such as FX options, currency swaps and non-deliverable forwards, are not exempted from the definition of swap. /files/Publication/ceeeadaa-4885-4f6e-a182-57b1c9136a68/Presentation/PublicationAttachment/4f07d4fb-fb7b-4b6b-af41-581a932d2dd4/11.19.12_FX_Swap.html Publication ceeeadaa-4885-4f6e-a182-57b1c9136a68 Mon, 19 Nov 2012 00:00:00 GMT SEC Rules and Regulations  SEC Grants No-Action Relief to Exclude Tax Blocker from Definition of Investment Company SEC Grants No-Action Relief from Surprise Examinations to Investment Advisers to 529 Plans Industry Update CFTC Provides Temporary Registration Relief to CPOs and CTAs that are Required to Register Solely Because of their Swap Activities; NFA Issues Notice that CPOs Relying on Rule 4.13(a)(4) Can Now Pre-file a Rule 4.7 Exemption FINRA Rule 5123 Regarding Filing Obligations in Private Placements to Take Effect on December 3, 2012 Litigation SEC Finds “In-Kind” Contributions Violate Pay-to-Play Rules SEC Settles Charges Against Investment Advisers for Failure to Disclose Revenue Sharing Arrangement and Other Conflicts of Interest Supreme Court to Address the Statute of Limitations for SEC Penalty Claims /files/Publication/9e041933-8862-4f4f-8854-00f82bc88f85/Presentation/PublicationAttachment/a97903c0-f37a-464c-8ef9-6ccaaa06665e/101712_IM_REG_Update.pdf Publication 9e041933-8862-4f4f-8854-00f82bc88f85 Wed, 17 Oct 2012 00:00:00 GMT SEC Rules and Regulations  SEC Issues Proposal to Eliminate General Solicitation Ban SEC Staff Responds to a Question About Preserving Client Anonymity on Item 7.B. of Form ADV Industry Update CFTC Issues Guidance on CPO/CTA Registration and Compliance Obligations Statement by SEC Chairman on Money Market Reform SEC Announces its First Award under its Whistleblower Program House Passes Bill Seeking to Tighten SEC and CFTC Cost-Benefit Analysis Litigation Second Circuit Relaxes Standard to Prove Aiding and Abetting Liability in SEC Enforcement Actions SEC Announces Deferred Prosecution Agreement with Investment Fund /files/Publication/327be028-7f65-4a25-b005-7a399d9fa3f3/Presentation/PublicationAttachment/72fbabc6-0401-4c29-8fb6-6a1ecb6b3dc0/092612_IM_REG_Update.pdf Publication 327be028-7f65-4a25-b005-7a399d9fa3f3 Wed, 26 Sep 2012 00:00:00 GMT On September 10, 2012, in response to market uncertainty, the CFTC issued FAQs clarifying the timing of swap dealer registration. The guidance confirms that entities will not be deemed to be swap dealers, and therefore will not have to register, before December 31, 2012, at the earliest. By clarifying this treatment, the CFTC has, in effect, set compliance dates for many key provisions of the Title VII swap regulatory regime. Full compliance will not be required for entities until the end of 2012, except for those swap dealers that voluntarily register early, and thereby become “swap dealers” before December 31, 2012. /files/Publication/83452cf6-c7cb-4595-ae1d-2110e6301800/Presentation/PublicationAttachment/79078e3d-e539-4d8f-ab7a-2ba1d463e2cd/091212_CFTC.pdf Publication 83452cf6-c7cb-4595-ae1d-2110e6301800 Wed, 12 Sep 2012 00:00:00 GMT Davis Polk advised Verisk Analytics, Inc. on its SEC-registered offering of $350 million aggregate principal amount of 4.125% senior notes due 2022, which are guaranteed by certain of Verisk’s subsidiaries. http://www.davispolk.com/news/detail.aspx?news=1834 News e7fbab83-af31-42a7-a6f4-97dcaf271e8d Wed, 12 Sep 2012 00:00:00 GMT Davis Polk advised Warner Chilcott plc in connection with an SEC-registered offering of 42,864,843 of its ordinary shares by certain selling shareholders for an aggregate price to the public of approximately $561.5 million. http://www.davispolk.com/news/detail.aspx?news=1835 News 04b3ec9d-89e6-403f-93a7-99c8e9064d8b Tue, 11 Sep 2012 00:00:00 GMT Davis Polk partners Danforth Townley and Susan Ervin will be among the speakers at Practising Law Institute’s “Hedge Funds 2012: Strategies and Structures for an Evolving Marketplace.” Townley, who will also serve as chair of the program, will present “The Changing Regulatory Framework for Hedge Funds and Managers.” Ervin will present “Trading Issues Relating to Swaps Under Dodd-Frank.” The program will be held on September 5, 2012, in New York and via live webcast. http://www.davispolk.com/events/detail.aspx?event=363 Event 372248d2-fe4b-4695-9300-97a40e0fd23b Wed, 05 Sep 2012 12:00:00 GMT On August 29, 2012, the Securities and Exchange Commission (“SEC”) issued a proposal to permit widespread advertising and other forms of “general solicitation” in private offerings made in reliance on Rule 506 of Regulation D or Rule 144A of the Securities Act of 1933, so long as the purchasers in the offering are accredited investors (“AIs”) (in Rule 506 offerings) or qualified institutional buyers (“QIBs”) (in Rule 144A offerings). The proposal is mandated by Section 201(a) of the Jumpstart Our Business Startups Act (the “JOBS Act”) but, unlike other portions of the JOBS Act, the proposal would apply to all issuers, not just emerging growth companies. /files/Publication/64621e87-86a1-4323-a300-05b7de0b1f06/Presentation/PublicationAttachment/ff74d00b-b6b4-4941-a795-06fe74f14766/090412_SEC_Issues_Proposal.pdf Publication 64621e87-86a1-4323-a300-05b7de0b1f06 Tue, 04 Sep 2012 00:00:00 GMT On July 19, 2012, the Division of Investment Management of the Securities and Exchange Commission (the “SEC”) issued additional responses (the “Responses”) to frequently asked questions regarding Form PF. Investment advisers registered or required to register with the SEC under the Investment Advisers Act of 1940 (the “Advisers Act”) that advise one or more private funds (i.e., 3(c)(1) or 3(c)(7) funds) and that have at least $150 million in private fund assets under management (“private fund advisers”) are required to file Form PF with the SEC for the purpose of reporting systemic risk information to the SEC. Additionally, private fund advisers that are also registered with the Commodity Futures Trading Commission (the “CFTC”) as commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”) and are required to file Form PF under the Advisers Act must file Form PF with the SEC to satisfy certain CFTC filing requirements with respect to their commodity pools that are private funds. Such CPOs and CTAs may file Form PF with the SEC to satisfy certain CFTC filing requirements with respect to their commodity pools that are not private funds. /files/Publication/09b2d934-c786-42fe-bcdc-c479b43c064c/Presentation/PublicationAttachment/98437207-9b22-483c-8f25-c481f6b26399/08.22.12_IMG_Update.pdf Publication 09b2d934-c786-42fe-bcdc-c479b43c064c Wed, 22 Aug 2012 00:00:00 GMT On July 24, 2012, the CFTC finalized a rule establishing a schedule for compliance with the mandatory clearing requirements for swaps under Title VII of the Dodd-Frank Act. On the same day, the CFTC proposed the first determination of classes of swaps that will be subject to mandatory clearing. Together, these actions bring the mandatory swap clearing requirement a step closer to realization. /files/Publication/b23f96a9-64a5-4002-92c3-437bff0b7df8/Presentation/PublicationAttachment/cab6a876-2704-489b-be6f-4ad5eb1d4575/073012_CFTC_Begins_Implementation.pdf Publication b23f96a9-64a5-4002-92c3-437bff0b7df8 Mon, 30 Jul 2012 00:00:00 GMT On July 10, 2012, the U.S. Commodity Futures Trading Commission (the “CFTC”) issued a no-action letter that will extend until December 31, 2012 relief from registration as a commodity pool operator (“CPO”) or commodity trading advisor (“CTA”) that was previously available to investment managers. The no-action letter, which was made public on July 13, 2012, comes in the wake of the adoption by the CFTC and SEC of final rules defining the terms “swap,” “security-based swap,” and “mixed swap,” which trigger numerous compliance dates under rules adopted pursuant to Title VII of the Dodd-Frank Act. Both the no-action letter and the definition rules will have significant consequences for investment managers whose funds trade in swaps, futures or commodity options (collectively, “commodity interests”) and therefore may be “commodity pools” under the CFTC rules. /files/Publication/45161a51-b634-4efe-a6af-8d3bca082186/Presentation/PublicationAttachment/763f1930-78d2-454f-b08d-8dc447493fc3/071912_CFTC_Addresses_Compliance.pdf Publication 45161a51-b634-4efe-a6af-8d3bca082186 Thu, 19 Jul 2012 00:00:00 GMT The U.S. Court of Appeals for the Seventh Circuit (the “Court”) recently potentially expanded the extraterritorial reach of the U.S. antitrust laws. Its unanimous en banc decision in Minn-Chem, Inc. v. Agrium Inc. (7th Cir. 2012) may make it easier for the Department of Justice (“DOJ”), the Federal Trade Commission (“FTC”) and private litigants to challenge the conduct of foreign parties in foreign markets under the U.S. antitrust laws. The decision also creates and entrenches several circuit splits regarding the proper interpretation of the Foreign Trade Antitrust Improvements Act of 1982 (“FTAIA”), and thereby increases the likelihood that the Supreme Court will elect to weigh in on these questions. /files/Publication/f46b2435-9c7c-4d95-8de4-0ae30c09b4e0/Presentation/PublicationAttachment/63a0f521-a508-40b4-8db5-0cc23b2862a1/071912_Expansion_in_Global_Reach_of_U.S._Antitrust%20Laws.pdf Publication f46b2435-9c7c-4d95-8de4-0ae30c09b4e0 Thu, 19 Jul 2012 00:00:00 GMT On July 11, 2012, the SEC adopted a rule requiring the national securities exchanges and FINRA to jointly propose and implement a plan that would require these organizations and their members to report, into one consolidated audit trail (the “CAT”), comprehensive information about every material event in the lifecycle of every quote, order, and execution in all exchange-listed stocks and options. When implemented, the CAT will revolutionize the way the SEC and the self-regulatory organizations oversee the securities markets by providing a searchable database of detailed time-sequenced (to the millisecond) information—including customer identity—with respect to every secondary market order and quote. This improved market oversight, however, comes at the cost of extensive new reporting obligations on market participants, untold costs for marketwide systems and technological upgrades, and the risk of leakage or misuse of highly confidential personal and business information. /files/Publication/c78accc4-8701-4293-bc2f-06c3f0f8ac75/Presentation/PublicationAttachment/546883f7-d74d-4eab-a33a-07264f3248c8/071912_SEC_Adopts_Rule.pdf Publication c78accc4-8701-4293-bc2f-06c3f0f8ac75 Thu, 19 Jul 2012 00:00:00 GMT On July 11, 2012 the Board of Governors of the Federal Reserve System issued supervisory guidance describing a new, optional process for pre-filing staff review of specific aspects of proposed acquisitions or other proposals prior to the formal submission of an application or notice. The pre-filing review process is designed particularly for the benefit of infrequent filers, such as individuals, family trusts, private equity firms new to banking investments and community banking organizations, and filers with novel proposals, and is expected to facilitate speedier review of and Board action on final submissions. /files/Publication/38a6bb2f-2be3-4846-aa57-408b35317b19/Presentation/PublicationAttachment/ead078b2-55cc-49b6-bb96-4187d3ac5304/07.16.12_FED_Pre-Filing.html Publication 38a6bb2f-2be3-4846-aa57-408b35317b19 Mon, 16 Jul 2012 00:00:00 GMT On June 8, 2012 and June 29, 2012, the Division of Investment Management of the Securities and Exchange Commission (the “SEC”) issued responses (the “Responses”) to frequently asked questions regarding Form PF. Investment advisers registered or required to register with the SEC under the Investment Advisers Act of 1940 (the “Advisers Act”) that advise one or more private funds (i.e., 3(c)(1) or 3(c)(7) funds) and that have at least $150 million in private fund assets under management (“private fund advisers”) are required to file Form PF with the SEC for the purpose of reporting systemic risk information to the SEC. Additionally, private fund advisers that are also registered with the Commodity Futures Trading Commission (the “CFTC”) as commodity pool operators (“CPOs”) and commodity trading advisors (“CTAs”) and are required to file Form PF under the Advisers Act must file Form PF with the SEC to satisfy certain CFTC filing requirements with respect to their commodity pools that are private funds. Such CPOs and CTAs may file Form PF with the SEC to satisfy certain CFTC filing requirements with respect to their commodity pools that are not private funds. /files/Publication/5bf3f47e-21d6-41d8-872a-478059fd0ac9/Presentation/PublicationAttachment/d129585c-a41e-43f2-8695-7dc95cd0defe/071612_IMG_Reg_Update.pdf Publication 5bf3f47e-21d6-41d8-872a-478059fd0ac9 Mon, 16 Jul 2012 00:00:00 GMT The SEC and CFTC have adopted joint final rules further defining the terms “swap,” “security-based swap” and “security-based swap agreement,” and delineating jurisdiction over mixed swaps between the agencies. The SEC voted to adopt the rules unanimously on July 6. The CFTC held an open meeting yesterday at which it voted 4-1 to adopt the rules (Commissioner Chilton voting against). The rules will become effective 60 days after their publication in the Federal Register. The SEC, however, stated in its press release that the rules provide for some interim exemptions for security-based swaps under federal securities laws for 180 days after publication of the final rules. /files/Publication/87e066d6-1a3b-484a-be9a-9392433e38b2/Presentation/PublicationAttachment/39e9d40d-539e-494d-a467-c9c9fb9d676d/071112_SEC_and_CFTC_Finalize.pdf Publication 87e066d6-1a3b-484a-be9a-9392433e38b2 Wed, 11 Jul 2012 00:00:00 GMT On July 6, the Basel Committee on Banking Supervision and the International Organization of Securities Commissions released a consultation paper on margin requirements for uncleared derivatives. In response, the CFTC reopened the comment period for its proposed rule on margin requirements for uncleared swaps until September 14, 2012. This newsflash describes the BCBS/IOSCO consultation paper and points out similarities to and differences from the U.S. regulators' proposed margin rules for uncleared swaps under Dodd-Frank. /files/Publication/2030c899-5f44-4c78-b700-d21d94e6c8f8/Presentation/PublicationAttachment/b1018b3a-e0c9-4d01-b79d-d637cce4d23d/071012_Basel_Committee.pdf Publication 2030c899-5f44-4c78-b700-d21d94e6c8f8 Tue, 10 Jul 2012 00:00:00 GMT Davis Polk partners Yukako Kawata and Michael Davis will be among the participants at Practising Law Institute’s Thirteenth Annual Private Equity Forum. Kawata will serve as Program Chair, and will speak on a panel addressing Investment Advisers Act registration. Davis will speak on two panels: “Fundamentals of Private Equity Investing” and “Current Environment for Private Equity Investing.” The program will be held July 9-10, 2012, in New York and via live webcast. http://www.davispolk.com/events/detail.aspx?event=346 Event c565751b-b4a6-45c4-9293-67ea33c1fa78 Mon, 09 Jul 2012 12:00:00 GMT On June 29, the CFTC released proposed interpretive guidance regarding the cross-border impact of the swap-related provisions of Title VII of the Dodd-Frank Act. The CFTC also released a proposed exemptive order that would provide non-U.S. registered swap dealers and major swap participants with temporary conditional exemptions from many swap-related Title VII requirements for one year, and permit SDs and MSPs that are U.S. persons to defer compliance with some requirements until January 2013. /files/Publication/51502eac-c34a-4d79-bc89-4124d9826c5f/Presentation/PublicationAttachment/37ee9770-2187-4fa8-acb0-43f929758c3f/070312_CFTC_crossborder.pdf Publication 51502eac-c34a-4d79-bc89-4124d9826c5f Tue, 03 Jul 2012 00:00:00 GMT