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Dodd-Frank Turns One, Let’s See What’s Been Done

July 21, 2011

Photo from Flickr by Kid's Birthday Parties. Some rights reserved.

Much has been made of what has yet to be done to implement the Dodd-Frank Act: no Volcker rule; no substantive swaps regulation; no knowing what constitutes a systemically important financial institution; no risk retention rules; and no one confirmed to head the Consumer Financial Protection Bureau. And efforts continue to repeal or limit the Act’s provisions. Representative Michelle Bachman has introduced a bill repealing the Act in its entirety. Other bills seek to repeal “expert liability” for credit rating agencies; limit how the SEC can define a swap execution facility; and seek to starve regulators of money.

But while the lobbyists lobby and the politicos posture, rulemaking has occurred. Herewith, a summary.

The SEC 

The SEC has adopted 8 substantive final rules implementing provisions of the Act. They are: Facilitating Shareholder Director Nominations, which requires, under certain circumstances, a company’s proxy materials to provide shareholders with information about, and the ability to vote for, a shareholder’s nominees for director.

Internal Control over Financial Reporting in Exchange Act Periodic Reports of Non-Accelerated Filers, which exempts smaller issuers from having to provide Sarbanes-Oxley attestation reports concerning their internal controls over financial reporting.

Disclosure for Asset-Backed Securities Required by Section 943 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which adopts new rules related to representations and warranties in asset-backed securities offerings.

Shareholder Approval of Executive Compensation and Golden Parachute Compensation, which requires issuers to conduct a separate shareholder advisory vote to approve the compensation of certain executives and golden parachute arrangements.

Implementation of the Whistleblower Provisions, which sets forth the criteria for awarding whistleblower bounties.

Family Offices, which define what constitutes a “family office” exempt from having to register with the SEC as an Investment Adviser.

Exemptions for Advisers to Venture Capital Funds, Private Fund Advisers With Less Than $150 Million in Assets Under Management, and Foreign Private Advisers, which exempts  from the registration requirements of the Investment Advisers Act certain privately offered investment funds.

Rules Implementing Amendments to the Investment Advisers Act of 1940, which increase the statutory threshold for registration by investment advisers with the Commission, require advisers to hedge funds and other private funds to register with the Commission, and require reporting by certain investment advisers that are exempt from registration.

The SEC also adopted a substantive interim final rule, Temporary Registration of Municipal Advisors, which establishes a means for municipal advisors to temporarily satisfy the Act’s requirement that they register with the SEC by October 1, 2010.


The CFTC has also adopted 8 substantive final rules implementing provisions of the Act. They are:

Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries, which sets forth the regulatory scheme for retail off-exchange transactions in foreign currency.

Agricultural Commodity Definition, which defines for the first time what is an agricultural commodity.

Prohibition on the Employment, or Attempted Employment, of Manipulative and Deceptive Devices and Prohibition on Price Manipulation, which gives the CFTC enforcement authority like that of the SEC.

Large Trader Reporting for Physical Commodity Swaps, which adopts reporting requirements for physical commodity swaps and options.

Business Affiliate Marketing, which requires CFTC-regulated entities to comply with the business affiliate marketing provisions of the Fair Credit Reporting Act.

Privacy of Consumer Financial Information, which requires CFTC-regulated entities to comply with the privacy provisions of the Gramm-Leach-Bliley Act.

Process for Review of Swaps for Mandatory Clearing, which establishes procedures for determining the eligibility of a derivatives clearing organization to clear swaps, the submission of swaps for a mandatory clearing determination, CFTC initiated reviews of swaps, and staying a clearing requirement.

Provisions Common to Registered Entities, which establishes the CFTC’s procedural framework for the submission of new products, rules, and rule amendments by designated contract markets, derivatives clearing organizations, swap execution facilities, and swap data repositories.

Joint Banking Regulatory Agencies

The Federal banking regulatory agencies have jointly adopted risk-based capital rules.

The FDIC and OCC

The FDIC and OCC have each adopted rules imposing requirements on how their respectively supervised entities engage in foreign currency futures transactions with retail customers.

In addition, the FDIC has adopted Certain Orderly Liquidation Authority Provisions under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which includes definitions, executive compensation clawback provisions, and procedures for prioritizing claims under the resolution authority granted to it under the Act.

And the OCC has issued a new final rule concerning the transfer of functions from the Office of Thrift Supervision to the OCC, and revised the OCC’s rules on preemption and visitorial powers.

The Federal Reserve Board

The Federal Reserve Board has been particularly active in implementing various consumer-related rules under the Truth in Lending Act. The final rules it has adopted concern loan originator compensation practices; appraisal independence; new escrow requirements for jumbo mortgages; and increasing the threshold for exempt consumer credit transactions and consumer leases;

Other rules adopted by the Federal Reserve Board are: Fair Credit Reporting Risk-Based Pricing Regulations; Equal Credit Opportunity; and Debit Card Interchange Fees;


The Financial Stability Oversight Council has issued new final rules on the designation of financial market utilities (“FMU”) as systemically important.

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