Chelsea Cowan – Global Investment Law Watch

United States: Potential Increase to Debenture Limit for Levered Small Business Investment Companies (SBICs)?

Feb 26 2025

By: TJ Bright, Matthew F. Phillips, and Kate E. Miller

Small Business Investment Companies (SBICs), which invest in qualifying small businesses in the United States, are eligible to receive Small Business Administration (SBA)-guaranteed debentures at favorable rates to finance their investment activities. Standard SBIC debentures typically have 10-year terms with interest payments due semi-annually, and a lump-sum payment of the principal at maturity.

Europe: Are the UK FCA’s Revised “Name and Shame” Proposals an Improvement?

Jan 21 2025

By: Michael Ruck, Rosie Naylor, and Helen Phizackerley

In November 2024, the UK FCA released a Consultation which seeks to clarify its proposed approach to publicising ongoing enforcement action—dubbed the “name and shame” plan—and to assure the wider market of the plan’s benefits. Responses are due by 17 February 2025.

United States: “Oops, I was a Broker!?” SEC Cracks Down on Investment Adviser Representatives Acting as Unregistered Brokers

Jan 15 2025

By Richard Kerr, Pablo Man, Jessica Cohn, and Sydney Faehling

On 14 January 2025, the Securities and Exchange Commission (SEC) announced settled charges against three investment adviser representatives for acting as unregistered brokers in the sale of membership interests in certain limited liability companies (i.e., Funds) that each purportedly owned shares of private issuers that had prospects of becoming publicly traded. The SEC separately announced settled charges against an advisory firm in a related action involving improperly managing conflicts of interests and the use of liability waivers.

United States: Federal Court Vacates SEC’s Expanded Dealer Definition

Nov 25 2024

By: Eden L. Rohrer, Richard F. Kerr, Jessica D. Cohn, and Joshua L. Durham

On 21 November 2024, the US District Court for the Northern District of Texas (Court) ruled against the US Securities and Exchange Commission (SEC) in two separate cases, vacating its rule which expanded the definition of securities dealers.

United States: D, F, G, 3, 4, 5: Firms Charged for Failing to Make Section 13 and 16 Filings

Sep 26 2024

By: Pablo J. Man, C. Todd Gibson, and Lisa N. Ju

On 25 September 2024, the SEC announced settled charges against 23 entities and individuals for failing to make timely filings about their holdings and transactions on Schedules 13D and 13G and on Forms 3, 4 and 5, pursuant to Sections 13 and 16 of the 1934 Act, respectively. The individuals charged were officers, directors and/or beneficial owners of publicly traded companies that failed to make “insider” filings. Two firms were charged for contributing to their officers’ and directors’ failures to file insider reports and for failing to comply with their own disclosure obligations to report such delinquencies. The penalties ranged from US$10,000 to US$750,000, and in the aggregate exceeded US$3.8 million.

United States: Firms Fail to File 13Fs, Fines Follow

Sep 18 2024

By: C. Todd Gibson, Pablo J. Man, and Brian Doyle-Wenger

On 17 September 2024, the SEC announced settled charges against 11 institutional investment managers for failing to file Form 13F. In addition, two of the 11 firms also failed to file Forms 13H as large traders. The penalties ranged from US$175,000 to US$725,000, and in the aggregate exceeded US$3 million combined. However, two firms self-reported and paid no penalties and one firm self-reported Form 13H filing violations and paid no penalties on that portion of the settlement. Furthermore, all of the institutional investment managers made remedial filings covering several years (in one case over 50 such filings).

Europe: Updated FCA Guidance on Registration for the UK Overseas Funds Regime

Aug 19 2024

By: Emma O’Dwyer, Aoife Maguire, and Hazel Doyle

On 12 August 2024, the UK’s Financial Conduct Authority released updated information on its website page on the Overseas Funds Regime (OFR). It provides details on how UCITS management companies (Operators) can register for FCA Connect – which is the first step for any Operator looking to register funds under the OFR. See our previous OFR-related blogs for more information on the OFR.

United States: ISDA Publishes Framework to Facilitate Close-Out of Derivatives Contracts

Jul 08 2024

By: Kenneth Holston, Cheryl L. Isaac, Matthew J. Rogers, Jordan A. Knight, and Bradley D. Bostwick

On 27 June 2024, ISDA published the ISDA Close-out Framework, an interactive decision tree that market participants can use to help prepare for potential terminations of collateralized derivatives contracts that are documented under an ISDA Master Agreement. The ISDA Close-out Framework was launched in response to the March 2023 failures of Signature Bank and Silicon Valley Bank, which shed light on the complexities of terminating swaps and other over-the-counter derivatives in the multifaceted post-financial crisis swap regulatory regimes. ISDA designed this framework in response to feedback from the derivatives industry that factors such as segregated margin and stays on the exercise of termination rights and remedies makes terminating and closing out derivatives contracts increasingly complex.

Europe: The Central Bank of Ireland Continues to Focus on Financial Stability

Jun 05 2024

By: Shane Geraghty, Michelle Lloyd, and Ruth Hennessy

The Central Bank of Ireland has announced this week that they will publish a feedback statement on their approach to macroprudential policy for investment funds, we expect in the coming months.

They issued a discussion paper on this topic late last year. The European Commission also released a targeted consultation on macroprudential policies for non-bank financial intermediaries on 22 May 2024.

The Central Bank’s announcement follows hot on the heels of its publication of a macroprudential policy framework for Irish-authorised GBP-denominated liability driven investment funds, as discussed here.

At the Central Bank’s recent Macroprudential Policy for Investment Funds Conference, the Governor of the Central Bank, Gabriel Makhlouf, indicated that a macroprudential framework for investment funds should not be a replication of the banking framework and should have:

A well-articulated set of objectives and principles; and
A framework tailored to the nature of the systemic risk from different fund cohorts – i.e. not a
‘one-size-fits-all approach’.

Governor Makhlouf noted that the objective is to ensure that this growing segment of the financial sector becomes more resilient and less likely to amplify adverse shocks.

United States: SEC Adopts Enhanced Privacy Safeguards

May 17 2024

By: Rich Kerr, Sasha Burstein, and Brian Doyle-Wenger

On 16 May 2024, the US Securities and Exchange Commission (SEC) adopted amendments to Regulation S-P’s safeguards and disposal rules. The amendments are designed to address the expanded use of technology and corresponding risks that have emerged since the original adoption of Regulation S-P in 2000. The amendments expand the scope of information and broaden the number of customers protected under both rules. The safeguards and disposal rule will apply to “customer information”, which includes records that contain “nonpublic personal information” as defined in the existing rule. Additionally, the amended rule expands the applicability of the safeguards rule to include transfer agents, and the disposal rules to include all transfer agents including those registered with appropriate regulatory authorities other than the SEC.

Author:Chelsea Cowan