Complex products continue to be a regulatory cause célèbre, drawing attention from the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority, Inc. (“FINRA”). FINRA launched a targeted examination of practices relating to options account opening, ongoing options account supervision and customer communications in connection with options in August 2021. Earlier this month, FINRA provided updated guidance in the form of questions for firms to consider as they review and evaluate their supervisory systems for options account activity of both self-directed and full service brokerage account customers. The questions focus on firms’ processes for approving customers to trade options, including related information gathering, options trading disclosures and ongoing supervision of options accounts.

Read our latest Legal Update on these topics here.

In Macquarie Bank Limited v Phelan Energy Group Limited [2022] EWHC 2616 (Comm) the High Court considered what must be contained in a notice of failure to pay or notice of an early termination date under the 2002 ISDA Master Agreement for it to be effective. The findings will be of interest to parties considering closing out derivative transactions.

Continue Reading You Have Been Served: Requirements for a Valid Failure to Pay Notice and Early Termination Date Notice

On Thursday 15 December, Mayer Brown’s Capital Markets team in Germany invites you to an ad hoc webinar on the proposed EU Capital Markets Union package, including the Listing Act and amendments to OTC Derivatives Clearing in the EU.

On 7 December 2022, the European Commission proposed a host of measures designed to facilitate further development of the EU’s capital markets, in particular by:

  1. alleviating – through a new Listing Act – the administrative burden for companies of all sizes, in particular SMEs, so that they can better access public funding by offering their securities to the public and listing securities on stock exchanges;
  2. making EU clearing services more attractive and resilient, supporting the EU’s open strategic autonomy and preserving financial stability within the EU; and
  3. harmonizing certain corporate insolvency rules across the EU, making them more efficient and helping to promote cross-border investment.

Register here.

The Amended Rules are Intended to be “More Technology Neutral” and Specifically Address Cloud Storage 

On October 12, 2022, the SEC adopted amendments to the electronic recordkeeping requirements under SEC Rule 17a-4, applicable to broker-dealers, as well as SEC Rule 18a-6, applicable to security-based swap dealers and major security-based swap participants that are not registered as broker-dealers.

Continue Reading SEC Adopts Amendments to Electronic Recordkeeping Requirements for Broker-Dealers and Security-Based Swap Entities

The recent volatility in the cryptocurrency markets has not tempered the momentum towards developing contractual standards and norms for digital asset derivatives.

Continue Reading The key (terms) to unlocking the market: contractual standards for digital asset derivatives

On June 15, 2022, the Securities and Exchange Commission (the “SEC”) issued a request for comment to “help determine which ‘information providers,’ such as index providers, model portfolio providers, and pricing services, might come under the SEC’s definition of an investment adviser.” The request for comment (the “RFC”) discusses the roles played by these entities in, for example, the construction and calculation of indices, and analyzes the factors used to determine whether an entity is providing investment advice within the meaning of the Investment Advisers Act of 1940 (the “Advisers Act”). Among other things, the SEC is concerned about what it terms “significant discretion” in index methodologies.

Continue Reading SEC Request for Comment on “Information Providers”

The Mayer Brown derivatives team recently attended (virtually, as is increasingly market standard) ISDA’s conference on “Developments in Crypto Derivatives”. This is a “hot” area of the legal market, as we have recently reported on this blog, and so the conference was well attended.

In this post we summarise the main themes of the conference and issues market participants should consider regarding crypto derivatives.

Continue Reading Developments in Crypto Derivatives

March 11, 2022 Webinar

12:00pm – 1:00pm EST

Register here.

On February 10, 2022, the Securities and Exchange Commission (“SEC”) proposed amendments to the rules governing reporting on Schedules 13D and 13G. These proposed amendments are intended to modernize the rules by, among other things, making information available to the public in a more timely manner, deeming holders of certain cash-settled derivative securities to be beneficial owners of the reference equity securities, and clarifying the disclosure requirements in respect of derivative securities. However, the proposed amendments have broader impacts.

During the upcoming Webinar, Mayer Brown panelists will discuss:

  • Proposed changes that would shorten multiple filing deadlines for Schedules 13D and 13G,
  • Proposed amendments to the definition of beneficial ownership to include certain cash-settled derivatives, other than security-based swaps,
  • Proposed method for calculating reference securities underlying cash-settled derivatives,
  • Proposed amendments that would clarify the disclosure requirements with respect to derivative securities,
  • The relationship of these proposed amendments to the SEC’s proposed Rule 10B-1, which would require public reporting of, among other things, certain large positions in security-based swaps,
  • Proposed amendments to clarify when persons are deemed to “act as” a group under Sections 13(d)(3) and (g)(3) of the Exchange Act and exemptions,
  • The effect of the proposed amendments to the beneficial ownership definition on Section 16 filing requirements, and
  • The effect on activist interest and strategies and ongoing private transactions.

On February 10, 2022, the Securities and Exchange Commission (the “SEC”) proposed amendments to Schedules 13D and 13G relating to beneficial ownership reports (the “Proposed Amendments”).

The Proposed Amendments are intended to modernize the rules that govern reporting on Schedules 13D and G by, among other things, making information available to the public in a more timely manner, deeming holders of certain cash-settled derivative securities to be beneficial owners of the reference equity securities, and clarifying the disclosure requirements in respect of derivative securities. The SEC also proposed a series of amendments to Rule 13d-5 to clarify and affirm its application to two or more persons who “act as” a group under Sections 13(d)(3) and (g)(3) of the Exchange Act.

Read the full Mayer Brown Legal Update here.