Financial Industry Developments

SEC Adopts Final Rules to Facilitate Intrastate and Regional Securities Offerings

On October 26, 2016, the Securities and Exchange Commission adopted rules designed to modernize intrastate and small offerings by companies while maintaining investor protections. Among the changes is the adoption of Securities Act Rule 147A, a new intrastate offering exemption that "further accommodates offers accessible to out-of-state residents and companies that are incorporated or organized out‑of‑state." Press Release.

OCC Issues Responsible Innovation Framework

On October 26, 2016, the Office of the Comptroller of the Currency ("OCC") announced it will establish an office dedicated to responsible innovation and implement a formal framework to improve the agency's ability to identify, understand and respond to financial innovation affecting the federal banking system. Press Release.

SEC Office of Compliance Inspections and Examinations Issues Risk Alert on Whistleblower Rule Compliance

On October 24, 2016, Staff in the Office of Compliance Inspections and Examinations (the "Staff") issued a National Exam Program Risk Alert announcing that it is examining registered investment advisers and registered broker-dealers compliance with key whistleblower provisions arising out of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). The Commission has recently brought several enforcement actions charging violations of Rule 21F-17 of the Commission's whistleblower regulations. Click here to continue reading the full article.

Rating Agency Developments

On October 26, 2016, Fitch published its updated Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds. Press Release.

On October 26, 2016, Fitch published its updated Covered Bonds Rating Criteria. Press Release.

On October 25, 2016, DBRS published a report entitled Rating European Consumer and Commercial Asset‑Backed Securitizations. Report.

On October 25, 2016, DBRS published a report entitled Rating U.S. Credit Card Asset‑Backed Securities. Report.

On October 25, 2016, DBRS published a report entitled Rating European Sub‑Sovereign Governments. Report.

On October 24, 2016, Fitch published its updated Canadian Residential Mortgage Rating Criteria. Release.

On October 20, 2016, DBRS published a report entitled Rating Companies in the Regulated Electric, Natural Gas and Water Utilities Industry. Report.

On October 20, 2016, DBRS published a report entitled Rating Companies in the Gaming Industry. Report.

On October 20, 2016, DBRS published a report entitled Rating Companies in the Automotive Supplier Industry. Report.

On October 20, 2016, DBRS published a report entitled Rating Companies in the Automotive Manufacturing Industry. Report.

European Financial Industry Developments

European Commission Work Program 2017

On October 25, 2016, the European Commission issued a communication outlining its 2017 Work Program (COM(2016) 710 final). The communication is addressed to the European Parliament, the Council of the EU, the European Economic and Social Committee ("EESC") and the Committee of the Regions. Alongside the communication, the Commission has published a Q&As document, together with the following Annexes to the communication.

In Annex 1 of the Work Program, the Commission proposes 21 key initiatives for 2017 to implement 10 priorities for the year. In respect of finance matters, the Commission proposes to:

• Follow up on a review of the European System of Financial Supervision to strengthen the effectiveness and efficiency of oversight at both macro- and micro- prudential levels; and
• Present a mid-term review of the Capital Markets Union Action Plan identifying obstacles and any additional measures required in Q2 of 2017. New CMU measures will include a framework for an EU personal pension product in Q2 2017, a REFIT revision of EMIR (the Regulation on OTC derivatives, central counterparties and trade repositories) (Regulation 648/2012) in Q1 2017 and an action plan on retail financial services in Q1 2017. The Commission notes that the adoption of the Prospectus Regulation and the Securitization Regulation should be accelerated.

Annex 2 sets out 18 new REFIT initiatives being launched, and it complements the items listed with new initiatives in Annex I. REFIT is the Commission's regulatory fitness and performance program. This is designed to make EU law simpler and reduce regulatory costs without compromising policy objectives. One of the new initiatives relates to the Regulation on cross-border payments in the Community (Regulation 924/2009).

The Commission has also published a scoreboard that shows the current state of play in the implementation of 231 REFIT initiatives, together with a summary of the key developments and results of REFIT.

Annex 3 sets out 35 priority‑pending proposals in relation to which the Commission wants the Parliament and the Council to take swift action. These include the proposals for a European deposit insurance scheme ("EDIS") and the CMU reforms. For more information on the EDIS, see Practice note, European deposit insurance scheme (EDIS).

Annex 4 lists the intended withdrawal of 19 pending proposals. These are proposals assessed as no longer relevant, as they have either been blocked or no longer meet the Commission's criteria.

Annex 5 contains a list of existing legislation that the Commission intends to repeal.

The Commission has also published a document that summarizes the legislation that will become applicable in 2017. This includes the Regulation on transparency of securities financing transactions (2015/2365/EU).

ICMA Guide to the European Corporate Debt Private Placement Market

On October 25, 2016, the International Capital Market Association ("ICMA") published the European Corporate Debt Private Placement Guide (the "Guide"). The Guide is intended to provide a voluntary framework of best practices for European corporate private placement ("ECPP") transactions. It aims to support the development of the ECPP market, and it builds on existing practices in the bond and bank loan markets and in other international private placement markets.

The Guide was first published in February 2015 (for more information, see Legal update: archive, ICMA guide to the pan-European private placement market). This edition of the Guide was produced as a result of developments in the ECPP market and is intended to replace and update the original 2015 version. The Guide now also covers aspects of the German Schuldschein market and contains an appendix on general principles of, and best practices applicable to, ECPP deal amendments and waivers. Guide.