On November 27, 2019, the United States Department of Commerce issued an advance notice of proposed rulemaking seeking public comment on “regulations that would govern the process and procedures that the Secretary of Commerce will use to identify, assess, and address certain information and communications technology and services transactions that
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Fintech
U.S. Federal Banking Regulators Propose a Madden Fix
Since the 2016 Second Circuit decision in Madden v. Midland Funding, LLC,[1] banks and their non-bank lending partners have faced legal uncertainty about their ability to assign or transfer loans. The Madden decision and subsequent actions by state courts have called into question the “valid-when-made” doctrine, which stands…
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Davis Polk Client Memorandum: Federal Reserve Announces Plan to Build Its Own Real-Time Gross Settlement System for Retail Payments
The Federal Reserve has announced that it plans to build its own 24x7x365 real-time gross settlement (RTGS) system for retail payments, called the FedNow Service. In a 4-1 decision, with Vice Chairman for Supervision Quarles dissenting, the Federal Reserve stated that the FedNow Service would allow consumers and…
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Davis Polk Client Memorandum: SEC and FINRA Staffs Highlight Broker-Dealer Regulatory Challenges Raised by Digital Assets—And Hint at Solutions
Broker-dealer custody of on-blockchain assets has been a key hurdle in the development of a more regulated financial infrastructure for digital assets in the United States. In a joint statement (the Joint Statement), the staffs of the SEC and FINRA outlined their concerns about broker-dealers’ ability to comply with…
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The FSB and IOSCO Are Watching Crypto Assets and DeFi
By Jai R. Massari & Annette L. Nazareth on
Posted in Fintech
The Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) are increasing their focus on crypto assets and decentralized financial technologies (DeFi). Over the past week, the organizations published reports providing updates on, discussing developments in, and assessing risks relating to…
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The Fintech Charter Goes into Hibernation
By Randall D. Guynn & Margaret E. Tahyar on
A federal judge has put the fintech charter into the deep hibernation of a long litigation battle. It is back to the drawing board for those who might desire a fintech charter. Time to take another look at bank partnerships or industrial loan companies. Moreover, in light of the Federal…
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SEC Staff Doubles Down on Howey for Digital Assets
Last week, the SEC staff published new detailed guidance on its views of when a digital asset may be considered a security, in the form of two documents: a guidance “framework” issued by the SEC’s Strategic Hub for Innovation and Financial Technology and a no-action letter from the SEC’s Division…
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Board Interlocks and Investment in the Banking Sector—The Federal Banking Regulators Propose to Raise the Asset Thresholds
Posted in Bank Regulation, FDIC, Federal Reserve, Fintech, Management Interlocks, OCC, Proposed Rule
The Federal Reserve, FDIC and OCC (the Banking Agencies) recently published a proposal to increase the thresholds associated with the “major assets” prohibition governing management official interlocks contained in the Depository Institutions Management Interlocks Act (DIMIA)[1] and implemented by Regulation L. DIMIA permits the Banking Agencies to raise the…
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Davis Polk Financial Services Regulatory Reform Tool—Post Midterm Election Edition
Posted in Administrative Law, Anti-Money Laundering, Bank Capital, Bank Regulation, CFPB, CFTC, Community Reinvestment Act, Cost-Benefit Analysis, Dodd-Frank, Economic Sanctions, FDIC, Federal Reserve, Fintech, FSOC, Legislation, Liquidity, OCC, OFAC, Stress Testing, Swap Regulation, TLAC, U.S. Basel III, U.S. Congress, Volcker Rule
Financial services regulatory reform will continue to evolve in 2018 and 2019. As we observe the changing legislative landscape, here is the Post Midterm Election Edition of our reference tool, which provides context and summarizes current developments across a range of key regulatory areas, agencies and actors. We will continue…
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SFC Announces Regulatory Framework for Virtual Asset Trading Platform Operators, Portfolio Managers and Fund Distributors
By Martin Rogers, Bo Huang & Noble Mak on
Posted in Fintech
As we discuss in our memorandum released today and available here, the Hong Kong Securities and Futures Commission (“SFC”) last week took a significant step in its regulation of virtual asset activities by establishing a new, opt-in regulatory sandbox framework for virtual asset trading platform operators, proposing…
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