In this issue...
U.S. appeals courts decided two legal challenges to the Department of Labor’s fiduciary rule: the Tenth circuit upheld a district court summary judgment that the fiduciary rule was not arbitrary or capricious in its treatment of fixed indexed annuities; the Fifth circuit vacated the fiduciary rule in finding that the rule is inconsistent with ERISA's "investment advice fiduciary" provision and the department lacked statutory authority to promulgate the rule.
The Financial Stability Board (FSB) published the final version of its Supplementary Guidance to the FSB Principles and Standards on Sound Compensation Practices; the guidance provides a framework for how compensation practices can be used to reduce misconduct risk and address misconduct incidents.
The Board of the International Organization of Securities Commissions published a report on the growing vulnerability of aging investors to financial fraud and unsuitable investments; the report outlined several sound practices for regulators and financial services providers to enhance investor protections for seniors.
Recent actions related to virtual currencies include:
The Wolfsberg Group, an association of thirteen global banks that aims to develop frameworks and guidance for the management of financial crime risks, recently published an updated Correspondent Banking Due Diligence Questionnaire and related guidance material, including frequently asked questions.
The U.S. Senate passed S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, and forwarded it to the House of Representatives for consideration. S.2155 would:
The House of Representatives passed H.R. 1116, the Taking Account of Institutions with Low Operation Risk (TAILOR) Act of 2017, which requires federal regulators to consider the risk profiles and business models of financial institutions in regulatory actions.
The SEC proposed amendments to disclosure requirements that would require certain open-end investment management companies to disclose information about the operation and effectiveness of their liquidity risk management program in their annual report.
The SEC proposed a new rule under Regulation NMS to conduct a transaction fee pilot program in NMS stocks that would subject stock exchange transaction fee pricing, including “maker-taker” fee-and-rebate pricing models, to new temporary pricing restrictions and require the exchanges to prepare and publicly post data.
The CFPB released the eighth in a series of Requests for Information, this time seeking comment on regulations adopted since its creation, including whether it should amend any of these rules or issue rules under new rulemaking authority. The CFPB is seeking input on potential changes to the regulations to better address tailoring, new technologies, consumer protections, and transparency. The 2015 HMDA rule and the 2017 Payday Lending rule are specifically excluded from the request.
The CFPB issued a final rule that provides technical amendments to its mortgage servicing regulations relating to periodic statement and coupon book requirements for certain consumers in bankruptcy.
The Federal Reserve issued additional responses to questions on the Comprehensive Capital and Analysis Review (CCAR) and Dodd-Frank Act Stress Test (DFAST) programs, including the treatment of the new tax law's base erosion and anti-abuse tax provisions for the 2018 CCAR.