A new ratings framework aligned to regulatory reform priorities

On August 3, 2017, the Federal Reserve Board (Fed) released a notice of proposed rulemaking that would establish a new rating system for large financial institutions (LFIs). Specifically, the new rating system would apply to bank holding companies (BHCs) and non-insurance, non-commercial savings and loan holding companies (SLHCs) with more than $50 billion in total assets, as well as intermediate holding companies (IHCs) of foreign banking organizations.

The proposal includes a new rating scale under which component ratings would be assigned for:

  1. Capital planning and positions,
  2. Liquidity risk management and positions, and
  3. Governance and controls.

In essence, the Fed is revamping its rating system for LFIs to catch up with the Fed’s post-crisis heightened supervisory expectations and approach to LFI supervision.  The Fed proposes to assign initial ratings under the new rating system during 2018.

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A new age for governance

On August 3, 2017, the Federal Reserve Board (Fed) proposed guidance that would significantly revise its expectations for boards of directors by laying out its view of the five key attributes that describe an effective board.  The proposal would also set in motion efforts to better delineate the roles, responsibilities, and accountabilities among senior management and the board by rescinding or revising past guidance and rules.  The proposed guidance on board effectiveness would apply to US bank holding companies (BHCs), savings and loan holding companies (SLHCs), and nonbank financial companies designated by the Financial Stability Oversight Council (FSOC) as systemically important.  The proposed guidance would not apply to intermediate holding companies (IHCs) of foreign banking organizations or state member banks, but the Fed noted that it anticipates proposing guidance on board effectiveness for IHCs at a later date, and requested feedback on how the guidance should be adapted to apply to IHCs and state member banks. The proposed guidance would also be used as part of the Fed’s supervisory assessment of board effectiveness outlined in a companion proposal on a new rating system for large financial institutions (LFIs).1

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Preparing for FDA Social Media Guideline Implementation

Preparing for FDA Social Media Guideline Implementation

The FDA has released new guidance regarding utilization of social media for advertising and promotion of pharmaceuticals and medical devices. This long-awaited guidance is the start of numerous specific guidance documents addressing defined issues in social media.

As companies search for new and effective ways to reach healthcare professionals through non-personal channels, the emergence of short-form media options is increasingly becoming a meaningful marketing and information dissemination platform. However, the legal, regulatory and safety professionals need to begin conversations with the commercial and marketing teams to take full advantage of the new communication channels, while remaining compliant. Effective processes and controls will need to be put into place to enable companies to leverage these platforms; and, in order to use these platforms, companies will need to have modified review and approval pathways to facilitate expedited approvals to keep pace with the speed of social media posting.

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Fed FAQs for FBOs

The Securities and Exchange Commission Reforms Money Market Rules

On June 26, 2014, the Federal Reserve (Fed) published answers to a list of frequently asked questions (FAQs) from foreign banking organizations (FBOs) that face enhanced prudential standards — including formation of an intermediate holding company (IHC) for non-branch U.S. operations and submission of an Implementation Plan. Many of the questions were generated from a town hall meeting the Fed conducted in May 2014 to help selected FBOs understand the planning requirements and timing associated with the enhanced standards.

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Dodd-Frank Four Years Later

Dodd-Frank Four Years Later

The fourth anniversary of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) is a perfect opportunity to reflect on the progress that has been made since the Act’s passage in 2010 and to look forward to the required regulations that have to be implemented. The law was a direct response to the financial downturn, and was specifically designed to prevent a similar crisis from happening again. So how are things going so far?

Overall, it’s a mixed bag. Considerable progress toward implementation and reform has been made in some areas, while others are just getting warmed up.

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