January 19, 2022

Volume XII, Number 19

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January 18, 2022

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Lawmakers Tackle Puerto Rico, CFTC; FSOC to Meet on Asset Managers

Legislative Activity

Senate Agriculture Committee Votes to Reauthorize CFTC

Following a Senate Appropriations hearing last week to review the FY17 Budget Requests for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), on Thursday, April 14, the Senate Agriculture Committee voted 11-9, to reauthorize the CFTC. Though the timing of Senate consideration is not yet certain, approval by the Senate Agriculture Committee brings the Commission one step closer to being reauthorized almost three years after the its legislative authority expired. The House voted to reauthorize the CFTC last summer, though the measure contained some different provisions than those approved by the Senate Agriculture Committee on Thursday.

Puerto Rico Fix Still in Flux

Despite continued efforts by the House Natural Resources Committee, lawmakers have still been unable to come together on legislation to address Puerto Rico’s fiscal crisis. Last week, the House Natural Resources Committee held a hearing on a discussion draft of the “Puerto Rico Oversight, Management, and Economic Stability Act,” which highlighted various concerns on both sides of the aisle. Though a markup of the bill was slated to follow the hearing, the markup was postponed to allow Members additional time to agree on a path forward. While House Republicans met on Friday, April 15, to address concerns within the GOP conference, it presently appears that more work is required. As of today – and despite earlier intentions to the contrary – the House has not scheduled floor consideration of the bill. With Speaker Paul Ryan’s (R-WI) May 1 deadline quickly approaching, lawmakers will need to act with a sense of urgency if they expect to finalize a solution before month’s end.

House Continues Efforts to Reign in Dodd-Frank

Last week, on Wednesday, April 13, the House Financial Services Committee marked-up and favorably reported to the House two bills aimed at reforming certain aspects of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Specifically, the Committee approved bills that would: 1) repeal the Dodd-Frank Act’s orderly liquidation authority (H.R. 4894); and 2) bring the CFPB within the appropriations process (H.R. 1486). The very next day, on Thursday, April 14, the full House approved two bills from the House Financial Services Committee: (1) H.R. 3340, which would bring the Financial Stability Oversight Council (FSOC) and the Office of Financial Research (OFR) within the appropriations process; and (2) H.R. 3791, which directs the Federal Reserve Board to revise the Small Bank Holding Company Policy Statement on the Assessment of Financial and Managerial Factors to raise its consolidated asset threshold from $1 billion to $5 billion. With these successes at its back, the House Financial Services Committee is expected to continue its efforts to take on Dodd-Frank, with Chairman Jeb Hensarling (R-TX) potentially ready to move forward with a proposal that would repeal and replace the law.

For its part, following bipartisan opposition during a planned nomination vote, the Senate Banking Committee has yet to reschedule the postponed votes on several pending Obama Administration nominees, including two SEC Commissioners.

This Week’s Hearings:

  • Tuesday, April 19: The House Financial Services Task Force to Investigate Terrorism Financing will hold a hearing titled “Preventing Cultural Genocide: Countering the Plunder and Sale of Priceless Cultural Antiquities by ISIS.”

  • Thursday, April 21: The House Financial Services Committee will hold a hearing titled “Continued Oversight of the SEC’s Offices and Divisions.”

Regulatory Activity

FSOC to Hold Open Meeting, Discuss Asset Management

Today, Monday, April 18, Treasury Secretary Jacob Lew will preside over a meeting of the FSOC. The FSOC will meet in both open and executive session. During the open session, the Council will discuss its continued work on asset management. During the executive session, the FSOC will review its 2016 annual report.

SEC Commissioners Reviewing Draft Fiduciary Rule

Last week, on Tuesday, April 12, SEC staff presented Commissioners with an outline of the SEC-drafted Fiduciary Rule, which will apply to broker-dealers, as well as investment advisers. This comes as the Department of Labor (DOL) recently released the final version of its own Fiduciary Rule amidst severe pushback from industry and lawmakers. Though the timing and substance of the SEC’s rulemaking have not yet been made public, it is likely that DOL will continue to face pushback in Washington in the interim, with various legislative proposals pending that would delay or fully overturn the rulemaking.

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume VI, Number 109
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About this Author

Brandon Roman, Corporate Attorney, Squire Patton Boggs Law Firm
Associate

Brandon Román advises domestic and international clients on a range of legal, legislative, and regulatory issues. Mr. Román helps clients develop comprehensive strategies to address legislative and regulatory interests as well as legal concerns. His work includes identifying client needs and helping them navigate the legal, legislative, and regulatory landscape, focusing primarily on government investigations, financial services and products, tax, and real estate. 

202-457-5330
Stephanie L. Shaker, Squire Patton Boggs, mergers, acquisitions lawyer, dispositions attorney
Associate

Stephanie focuses her practice on a variety of corporate matters, including advising public and privately-held companies on mergers, acquisitions and dispositions, securities law compliance and corporate governance.

Previously, Stephanie analyzed proposed merger documents as a paralegal specialist for the US Department of Justice, Antitrust Division. During law school, she revised a treatise on securities regulations to reflect changes instituted by the Sarbanes-Oxley Act and the Dodd-Frank Act.

202 457 5243
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