On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), the most sweeping financial regulatory reform legislation since the Great Depression. One year later, Dodd-Frank continues to have reverberations across the financial services industry, particularly as many key provisions take effect on the first anniversary of Dodd-Frank’s enactment. To help you stay informed of key developments under Dodd-Frank, Simpson Thacher has launched an online resource center that will contain timely, practical commentary on a wide array of areas, from capital developments and consumer protection matters to derivatives and systemic risk determinations.

As part of the resource center, Simpson Thacher has published “Reflections on Dodd-Frank: A Look Back and a Look Forward,” a compendium of articles that review and analyze key rulemaking developments over the past year. To download a copy of this publication, please click here.

We have also prepared a collection of other materials and memoranda that relate to the significant legal and regulatory developments under Dodd-Frank, which you can access below.

The Federal Reserve’s Evolving Financial Stability Analysis in Bank and Nonbank Acquisitions
02.17.12

On February 14, the Federal Reserve issued an order approving Capital One Financial Corporation’s proposed acquisition of ING Bank, fsb.  The Capital One order, together with the Federal Reserve’s earlier order approving the acquisition of RBS Bank (USA) by The PNC Financial Services Group, Inc., are the first interpretations of the new “financial stability” factor, which the Federal Reserve is required by Dodd-Frank to consider in connection with approving acquisitions. Read more.

Regulating Systemically Important Financial Companies
01.10.12

The Federal Reserve has released a much-awaited proposed rule on the enhanced prudential standards and early remediation framework that will apply to large bank holding companies and to those nonbank financial companies designated by the new Financial Stability Oversight Council as “systemically important.”  The proposed rule would implement Sections 165 and 166 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) and, together with other rulemakings, form the heart of systemic risk regulation under Dodd-Frank.  Comments on the proposed rule, which was published last week in the Federal Register, are due by March 31, 2012.  Read more.

Financial Stability Oversight Council Releases Proposed Rules and Interpretive Guidance on Designations of Systemically Important Nonbank Financial Companies
10.24.11

On October 11, 2011, the Financial Stability Oversight Council (the “FSOC”) issued a second notice of proposed rulemaking and interpretive guidance  regarding the standards and process that it will use to determine whether a nonbank financial company should be treated as “systemically important” and, therefore, subject to supervision by the Federal Reserve in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act.  In particular, the FSOC has outlined a three-stage process that it intends to follow in making so-called “SIFI” determinations.  Comments on the FSOC’s proposal are due by December 19, 2011.  Read more.

Regulations Proposed to Implement the Volcker Rule
10.13.11

The Federal Reserve and other agencies have issued a much-awaited proposed rule implementing the so-called “Volcker Rule,” a set of provisions contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The Volcker Rule, once effective, will prohibit banking entities from engaging in proprietary trading and from investing in or sponsoring private equity and hedge funds, subject to certain exceptions and transition considerations.  The agencies are seeking comment on the proposed rule until January 13, 2012.  Read more.

SEC Removes Credit Rating Criteria from Form S-3 and F-3 and from Certain SEC Rules
08.31.11

The Securities and Exchange Commission recently adopted amendments to remove investment grade criteria from the transaction eligibility requirements of Form S-3 and F-3.  The SEC also adopted corresponding amendments to modify certain SEC rules that reference credit ratings.  These form and rule changes will generally become effective on September 2, 2011.  These changes were made in light of Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which requires that the SEC review its regulations with a credit ratings component and “remove any reference to or requirement of reliance on credit ratings and to substitute in such regulations such standard of credit-worthiness.”  Read more.

Federal Reserve Issues Regulations for Savings and Loan Holding Companies
08.19.11

On August 12, the Federal Reserve Board issued an interim final rule establishing regulations for savings and loan holding companies.  The regulations follow the recent transfer under the Dodd-Frank Act of supervisory and rulemaking authority for savings and loan holding companies and their nondepository subsidiaries from the Office of Thrift Supervision to the Federal Reserve Board.  Read more. 

Federal Reserve Issues Final Rule Regulating Debit Interchange Fees and Network Exclusivity
06.29.11

Today, the Board of Governors of the Federal Reserve System approved its final rule regulating debit interchange fees and network exclusivity and routing, as well as its interim final rule on fraud-prevention adjustment, pursuant to Section 1075 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  After receiving over 11,000 comments, the Board made significant changes to its proposed rule, including a substantial increase in allowable interchange fees.  Read more. 

SEC Announces Final Rules Implementing The Dodd-Frank Whistleblower Program
05.26.11

On May 25, 2011, the SEC announced the long-awaited final rules implementing the sweeping whistleblower program included in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). While Dodd-Frank enacted a framework for the new whistleblower program, it explicitly left it to the SEC to adopt specific rules and procedures for implementing the program. In November 2010, the SEC released proposed rules and extensive commentary and solicited comments, prompting a flurry of letters from business interests and whistleblower advocates, especially over the question of whether the SEC should require that whistleblowers report wrongdoing through internal corporate compliance channels before becoming eligible for bounties under the whistleblower program. The rules answer many of the uncertainties about the Dodd-Frank whistleblower program that have been lingering since the Dodd-Frank Act was signed into law last summer. Read more.

Securitization After Dodd-Frank: A Look at the Proposed Risk Retention Rules
04.07.11

On March 29, five federal banking and housing agencies, as well as the SEC, released proposed rules implementing the credit risk retention requirement mandated by Dodd-Frank for certain securitization transactions. Section 941 of Dodd-Frank added a new Section 15G to the Securities Exchange Act of 1934, which directs regulators to adopt rules that generally require sponsors of asset-backed securities to retain at least 5% of the credit risk relating to the assets that underlie such asset-backed securities. This so-called “skin in the game” requirement is intended to provide sponsors with a meaningful incentive to monitor and control the quality of securitized assets and align the interests of the sponsor with those of investors. The proposed rules provide a complete exemption for securities collateralized exclusively by “qualified residential mortgages” that meet stringent underwriting standards. Special treatment is also provided for securities that are backed by qualifying commercial loans, commercial real estate loans and automobile loans. Read more.

SEC Proposes Readoption of Rules 13d-3 and 16a-1 Regarding Beneficial Ownership in Light of Dodd-Frank
03.24.11

On March 17, 2011, the Securities and Exchange Commission (the “SEC”) proposed to readopt, without change, certain portions of Rules 13d-3 and 16a-1 (the “Rules”) under the Securities Exchange Act of 1934 (the “Exchange Act”). The proposed readoption of the Rules is intended to preserve the existing application of the beneficial ownership rules promulgated under Sections 13 and 16 of the Exchange Act (the “Beneficial Ownership Rules”) to security-based swaps following the effectiveness of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The SEC is soliciting comments on the proposed readoption through April 15, 2011. Read more.

U.S. Regulators Propose Rules on Incentive-Based Compensation Arrangements at Large Financial Institutions
02.24.11

On February 7, the FDIC issued proposed rules governing incentive-based compensation arrangements at major financial institutions with consolidated assets of at least $1 billion. The proposed rules impose prohibitions on compensation arrangements that encourage inappropriate risks and also establish new reporting requirements. The same rules are expected to be proposed by the other major banking and financial regulators, including the Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Securities and Exchange Commission. Read more.

The Sweeping Whistleblower Provisions Tucked Inside Dodd-Frank: Why And How Companies Should Prepare For a New Era of Corporate Whistleblowing
11.30.10

In announcing their blockbuster $750 million settlement with GlaxoSmithKline last month, federal officials described the case as proof that the Department of Justice is committed to cracking down on health care fraud. What the official announcement left out was that the investigation into drug safety concerns at Glaxo began more than six years ago not with a subpoena or a customer who fell ill, but when a former Glaxo employee blew the whistle on quality control problems at a Glaxo plant. In return for that information, the former employee will receive $100 million from the government — the largest whistleblower award ever paid in this country. But the record set by the Glaxo award might not last long. Read more.

Federal Reserve Issues Proposed Transition Rules for “Volcker Rule” Compliance
11.19.10

On November 17, 2010, the Federal Reserve released proposed transition rules for banking entities and certain other companies that will be subject to the “Volcker Rule” restrictions on proprietary trading and on investments in and sponsorship of private equity funds and hedge funds. The proposed transition rules, which are subject to a 45-day public comment period, implement provisions of the Volcker Rule that provide banking entities and certain other companies a defined period of time to conform their activities and investments to the Volcker Rule. This memorandum provides a summary of the Federal Reserve’s proposed transition rules. Read more.

The CFTC and the SEC Issue Interim Final Reporting Rules for “Pre-Enactment Unexpired” Swaps and Security-Based Swaps
10.22.10

As required under the Dodd-Frank Act, the Commodities Futures Trading Commission (the “CFTC”) and the Securities Exchange Commission (the “SEC”) have issued interim rules with respect to the reporting of swaps and security-based swaps entered into prior to July 21, 2010, the date of enactment of the Dodd-Frank Act (the “enactment date”), that had not expired as of the enactment date (“pre-enactment unexpired swap transactions”). Read more.

Regulation of Private Funds and Their Advisers Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
08.03.10

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), a broad overhaul of the nation’s financial regulatory system. This memorandum focuses on the provisions of the Act that alter the registration, reporting and recordkeeping obligations applicable to private funds and their advisers. Previously, private equity and hedge fund advisers generally were not required to register with the Securities and Exchange Commission (“SEC”) or comply with related reporting, recordkeeping and other burdens in reliance on the “private investment adviser” exemption under the Investment Advisers Act of 1940. Under the Act, however, private equity and hedge fund advisers will be required to register with the SEC if their advisee funds and other client accounts have $150 million in assets or more under management. Advisers solely to “venture capital funds,” regardless of their size, are not required to register, although they will be subject to certain reporting requirements. The registration, reporting and recordkeeping obligations become effective one year after the Act is enacted. While the Act establishes a framework for heightened regulation of the private funds industry, the provisions of the Act are in many respects incomplete (and in some cases intentionally so), and Congress has authorized the SEC and other federal regulators to fill in these gaps and complete this process through further analytical review, rulemaking and interpretation. This administrative process will dictate important aspects of the reform and the exact ways in which the new legislation will affect private funds and their advisers. As a result, it will likely be quite some time until such reforms are broadly implemented and the direct and indirect impact of the Act on the private funds industry is fully understood. Read more.

Guidance on New SEC Rating Agency Expert Consent Requirement
07.21.10

With President Obama signing the Dodd-Frank Wall Street Reform and Consumer Protection Act into law today, a new requirement has become effective that generally requires filing of written consents from credit rating agencies with the SEC where any portion of a credit rating agency report or opinion is quoted or summarized in a registration statement or prospectus. In light of the conflict between this new consent requirement and preliminary positions adopted by the leading credit ratings agencies not to deliver consents, we have collaborated with a number of other law firms and have spoken with the staff of the Securities and Exchange Commission with a view to developing guidance with respect to the application of the new consent requirement. This guidance is set forth in the white paper appended to our memorandum. Read more.

The Volcker Rule Provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act
07.14.10

On June 30, 2010, the U.S. House of Representatives passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is widely expected to be passed by the U.S. Senate and signed into law by President Obama. Among the most consequential features of the legislation is the so-called “Volcker Rule”. Named after Paul Volcker, the former chairman of the Federal Reserve, the Volcker Rule will, subject to limited exceptions, ban banking organizations from engaging in proprietary trading and sponsoring or investing in hedge funds and private equity funds. Our July 6, 2010 memorandum, “U.S. Congress Nears Completion of Landmark Financial Services Reform Legislation”, provided an overview of the legislation. This memorandum provides additional detail on the Volcker Rule. Read more.

U.S. Congress Nears Completion of Landmark Financial Services Reform Legislation
07.06.10

On June 30, 2010, the U.S. House of Representatives approved the most sweeping financial reform legislation in decades, entitled the “Dodd-Frank Wall Street Reform and Consumer Protection Act.” The U.S. Senate has yet to vote on the legislation, but it is widely anticipated that it will be approved by the Senate when it reconvenes on July 12. Once enacted, the legislation will have far-reaching implications, affecting virtually every segment of the financial services industry and its customers. This memorandum provides a summary of the key provisions in the legislation. Read more.

The Prospective Impact on Public Companies of the Financial Regulatory Reform Bills: A Legislative Update
06.03.10

On May 20, 2010, the U.S. Senate passed a comprehensive set of financial regulatory reforms that, if enacted, will represent the most sweeping set of changes to the U.S. financial regulatory system since the Great Depression. The reforms, which are set forth in a bill of more than 1,500 pages called the Restoring American Financial Stability Act of 2010 (S. 3217, or the “Senate Bill”), come after nearly a year of Congressional hearings and months of stop-and-start legislative negotiations. The Senate Bill tracks many of the themes contained in the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173, or the “House Bill”) that was passed by the U.S. House of Representatives on December 11, 2009. Both bills mandate specific executive compensation and corporate governance practices at U.S. public companies generally. Read more.