October 20, 2021

Volume XI, Number 293

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October 19, 2021

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Dodd Frank – Several Developments of Note

SEC LAUNCHES WHISTLEBLOWER PROGRAM: 

  • The SEC’s new whistleblower program officially launched on August 12, 2011. The program, created by Dodd-Frank, provides monetary incentives for individuals to report possible violations of the federal securities laws to the SEC. Anyone who voluntarily provides the SEC with original information that leads to a successful action resulting in monetary sanctions exceeding $1 million is entitled to an award of between 10 percent and 30 percent of the monetary sanctions. The program also prohibits retaliation by employers against employees who provide the SEC with information about possible securities violations. Attorneys, compliance officers and auditors are also eligible for an award, but only when it is necessary to prevent imminent or ongoing misconduct or the misconduct has been identified and reported, but not remediated in a timely fashion. The program’s webpage can be accessed here.

OFFICE OF FINANCIAL RESEARCH UPDATE ON ESTABLISHING A LEGAL ENTITY IDENTIFIER: 

  • The U.S. Department of Treasury’s Office of Financial Research (OFR), created by Dodd-Frank to support the Financial Stability Oversight Council (FSOC), has been promoting the development of a legal entity identifier (LEI) to collect, process, use, and distribute information about parties to financial transactions. The OFR’s objectives are to facilitate the establishment of a global legal identifier through international consensus, developed jointly by the public sector and private industry. In the United States, the OFR continues to coordinate with the SEC, which is requiring investment advisers to disclose their LEIs on the new Form ADV Part 1A (for those investment advisers who obtain LEIs once the standard is developed) and which has proposed to require private funds to disclose their LEIs on proposed Form PF. The OFR is also coordinating with the CFTC, which is issuing rules together with the SEC that require disclosure of LEIs in reporting swap and security-based swap transactions to trade repositories. Although the OFR initially expected to establish a LEI standard by July 15, 2011, the initial phase of implementation has been delayed until 2012 after the OFR completes its rulemaking process. In addition to facilitating OFR’s collection of systemic risk data, a universal LEI system could help the private sector process transactions, track counterparties and calculate exposures. In July 2011, a global coalition of financial services firms and trade associations recommended a combination of International Organization for Standardization (ISO), the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the Depository Trust & Clearing Corporation (DTCC), the Association of National Numbering Agencies (ANNA), and business registries to maintain the standard, issue identifiers, and validate and maintain reference data for entities assigned an identifier. The OFR is working with the FSB Secretariat and other authorities to organize a workshop this September to discuss the development and implementation of an LEI. The OFR’s statement on its progress can be accessed here.
©2021 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume I, Number 236
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About this Author

Shareholder

Ms. Durham has experience on both the legal and business sides of derivatives, private funds, complex financing transactions, and structured products. Prior to joining Greenberg, she was an investment banker and Head of Structured Equity Products at BNP Paribas where she concentrated on structuring equity financing and equity derivative transactions for corporations and hedge funds. Prior to BNP, she was a partner in the Corporate Dept. at the law firm of Weil, Gotshal & Manges LLP.

Ms. Durham has been involved as both a lawyer and...

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