Posted on Jul 26, 2016
Although the dust has somewhat settled following the historic “leave” vote on June 23, 2106, in which voters in the United Kingdom elected to leave the European Union, many questions remain. Of particular importance to fund managers based in the UK is the question of Brexit’s impact on the applicability of AIFMD. There are several possible scenarios that have been raised. The UK may elect for a full withdrawal, in which case, it will no longer be a “European fund manager” under the terms of AIFMD, thus eliminating the benefits of European “passporting.” Alternatively,...
Posted on Jun 10, 2016
On May 24, 2016, the U.S. Commodity Futures Trading Commission (“CFTC”) adopted rules (the “Final Rule”) establishing a framework for applying the CFTC’s previously adopted margin rules (the “CFTC Margin Rules”) to cross-border uncleared swaps. The Final Rule provides that certain parties that are subject to the CFTC Margin Rules may, in certain circumstances, (i) be partially or wholly exempt from the CFTC Margin Rules or (ii) satisfy certain requirements under the CFTC Margin Rules by complying with certain foreign jurisdictions’ margin requirements instead. The Final...
Posted on Jun 1, 2016
In a recent speech, Andrew Ceresney, the Director of the SEC’s Division of Enforcement, discussed his division’s focus on the private equity industry, reviewing eight recent enforcement actions that Enforcement’s Asset Management Unit has brought against private equity advisers, and vowing that there will be “more to come.”
Mr. Ceresney said that the enforcement actions against private equity advisers so far fall into three interrelated categories: (i) advisers that receive undisclosed fees and expenses; (ii) advisers that impermissibly shift and misallocate expenses; and (iii)...
Posted on May 24, 2016
On May 5, 2016, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued final rules (the “Final Rules”) on customer due diligence requirements for banks, broker-dealers, mutual funds, and futures commission merchants and introducing brokers in commodities (collectively, “covered financial institutions”). Among other things, the Final Rules require covered financial institutions to identify and verify the beneficial owners of legal entity customers.
The Final Rules define a “legal entity customer” as a “corporation, limited liability...
Posted on Apr 29, 2016
In a public statement earlier this month, SEC Chair Mary Jo White expressed her support for the Financial Stability Oversight Council’s (“FSOC”) Update Statement on its review of asset management products and activities for potential financial stability risks. The Update Statement includes an evaluation of risks focused on the following areas: (1) liquidity and redemption; (2) leverage; (3) operational functions; (4) securities lending; and (5) resolvability and transition planning.
Per her public statement, Chair White also believes that FSOC’s work in this area is complementary to...
Posted on Apr 29, 2016
Earlier this month, the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of the Treasury, submitted its long-awaited Final Rule on due diligence of beneficial owners of customer accounts to the White House Office of Management and Budget. This new anti-money laundering rule is expected to require financial institutions to obtain and possibly verify certain information from customers regarding the beneficial owners of customer accounts. Information about the status of the submission of the Final Rule can be found...
Posted on Apr 22, 2016
Recently proposed Treasury regulations under IRC § 385 (the Proposed Regulations) would potentially treat related-party debt, in whole or in part, as equity for U.S. tax purposes. The Proposed Regulations generally apply to debt among members of an expanded corporate group, which includes certain controlled partnerships, without regard to whether any of the parties have engaged in an inversion transaction or whether the group is U.S. or non-U.S. parented.
The Proposed Regulations would require corporate groups to satisfy new documentation requirements in order for related-party debt to be...