Katten Muchin Rosenman LLP (JD Supra United States)

BROKER-DEALER - FINRA Publishes 2021 Industry Spotlight - On May 25, the Financial Industry Regulatory Authority (FINRA) published the 2021 FINRA Industry Spotlight (Industry Spotlight), which is FINRA’s annual statistical report covering the brokerage firms, registered representatives and market activity that FINRA regulates. The 2021 edition includes new statistics on US Treasury volume...

On April 27, the US Court of Appeals for the Second Circuit released its opinion in Set Capital LLC v. Credit Suisse Group AG, No. 19-3466 (2d Cir. 2021). The decision is noteworthy because the Court permitted market manipulation claims against an issuer arising from its open-market hedging activities, while rejecting the issuer's explicit disclosure of the hedging as insufficient to avoid...

On April 19, Governor Andrew Cuomo signed into law the New York Budget Bill for the 2021-2022 state fiscal year (Senate Bill S2509C) (the New Budget Bill). The New Budget Bill contains a major change to the liability provisions for New York State's real estate transfer tax (RETT).

BROKER-DEALER - Notice of Filing of a Proposed Rule Change to Adopt a Supplemental Liquidity Schedule - The Securities and Exchange Commission is seeking comments on a Financial Industry Regulatory Authority (FINRA) proposal to adopt a Supplemental Liquidity Schedule (SLS), and instructions thereto, pursuant to FINRA Rule 4524. FINRA Rule 4524 provides in part that each member, as FINRA...

Key Points - - Populating a template lease summary is an effective way to confirm significant commercial, legal and technical provisions in lease due diligence. - Comprehensive seller and lessee representations may be negotiated in the sale and lease-assignment agreements to round out the due diligence. - Real-world examples of unscheduled lessor payment obligations to the lessee and...

The Katten Kattwalk discusses legal issues in the fashion industry affecting the trademarks, patents and copyrights associated with companies, brands and products. Please see full Newsletter below for more information.

BROKER-DEALER FINRA - Shares Practices Firms Use to Protect Customers from Online Account Takeover Attempts - On April 11, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 21-18 (Notice) in response to increasing reports from customers experiencing customer account takeover (ATO) incidents. These incidents involve bad actors using compromised customer information,

Dark Patterns Come to Light in California Data Privacy Laws - Imagine this scenario: You are navigating through a website or watching an in-app ad, when suddenly you are redirected to a subscription page, even though you have no interest in the product being marketed to you. Later on, you come across a platform that you actually want to use, but in order to do so, you are required to sign up...

BROKER-DEALER - FINRA Seeks Comment Regarding Diversity and Inclusion Initiatives - The Financial Industry Regulatory Authority (FINRA) is seeking comment on rules, operations and administrative processes that may create unintended disparate impacts on those within the industries that FINRA regulates. FINRA recognizes that several broker-dealer industry participants have developed...

BROKER-DEALER - SEC Small Business Capital Formation Advisory Committee to Discuss Opportunities for Underrepresented Founders and Investors - On April 26, the Securities and Exchange Commission announced that its Small Business Capital Formation Advisory Committee (Committee) will meet on Friday, April 30, to discuss solutions to increase access to capital for underrepresented founders and

As covered in our earlier advisory, "AML Enforcement Continues to Trend in 2021," the recently passed National Defense Authorization Act for fiscal year 2021 included the Anti-Money Laundering Act of 2020 (AML Act), which expanded the reach of AML regulations and the tools available to law enforcement to investigate and penalize violators. Of particular interest for private businesses, however,...

Recent initiatives by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) evidence the agencies' increasing intent to play significant roles in the ESG space.

Key Points - - The Housing Preservation Opportunities Program (the Program) offers attractive real property tax exemptions for multi-family projects located in New York City, including those that may be experiencing economic difficulty or that have existing real property tax benefits soon expiring (such as existing 421(a) or J51 tax benefits). - The Program offers a 40-year real property...

BROKER-DEALER - Gary Gensler Names Initial Senior Staff Members - On April 19, the Securities and Exchange Commission announced the appointments of SEC Chair Gary Gensler’s senior staff, who will be responsible for advising Gensler on matters before the SEC. Prashant Yerramalli, appointed as SEC’s Chief of Staff, will continue to serve the role, which he has held since January under Acting...

SEC/CORPORATE - SEC Statements Regarding SPACs Address Warrants and Projections - Following the increase in the number of special purpose acquisition companies (SPACs) and the related business combinations between SPACs and private target businesses (commonly referred to as “de-SPAC” transactions), an increase in regulatory scrutiny, particularly from the Securities and Exchange Commission,

In February, Katten conducted a survey of 112 private credit industry professionals that showed how a large percentage of private equity investors and lenders in the private credit industry expect deal flow to increase in 2021 and are optimistic about several deal categories and sectors. Initially hurt by the COVID-19 pandemic, private credit markets began to improve at the end of 2020....

SEC/CORPORATE - SEC Corp Fin Staff Issues Statement on SPAC Transactions - On March 31, the staff of the Division of Corporation Finance (the Staff) of the Securities and Exchange Commission issued a staff statement (the Staff Statement) relating to accounting, financial reporting and governance issues for private companies to consider before engaging in a business combination with a...

Key Points - The risk that prepetition lease payments made by a lessee that is a debtor in a US bankruptcy will be clawed back from an aircraft lessor can be reduced if: - the lease is a true lease rather than a disguised secured loan or finance lease - one or both of basic rent and maintenance reserves are payable in advance (i.e., at the beginning of a rent period rather than at the...

Key Points - - Proposed taxes on mezzanine and preferred equity financing, and a tax on high-value second homes in New York City (commonly known as a “pied-à-terre” tax), were not included among the revenue-raising measures adopted by the New York State lawmakers in the final budget bill adopted on Wednesday, April 7. - This is not the first time these taxes have been proposed and then...

BROKER-DEALER - 2021 Advisory Committee Overview and Engagement Notice - On March 26, the Financial Industry Regulatory Authority (FINRA) published a notice encouraging employees of member firms and other interested persons to apply for upcoming vacancies on FINRA’s advisory and ad hoc committees. The Notice provides a general description of the responsibilities of each of FINRA’s advisory...

Key Points - - New York State lawmakers, who are looking to make up the gap in the state's annual budget, are considering proposals for nearly $7 billion in tax hikes in a package that includes taxes on mezzanine and preferred equity financing, and a tax on individuals with second homes in New York City (commonly known as a "pied-à-terre" tax). - The proposal would subject mezzanine and...

BROKER-DEALER - SEC Issues Amendments, Seeks Public Comment on Holding Foreign Companies Accountable Act - On March 24, the Securities and Exchange Commission adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Holding Foreign Companies Accountable Act (HFCA Act). Please see full Newsletter below for more information.

Attached please find the updated Foreign Listed Stock Index Futures and Options Approvals Chart, current as of March 25, 2021. All prior versions are superseded and should be discarded. Please note the following developments since we last distributed the Approvals Chart... Please see full Chart below for more information.

Recently, staff of the Securities and Exchange Commission (SEC) issued a no-action letter stating that they would not regard "Institutional Family Offices" as retail customers of broker-dealers for purposes of broker-dealers' obligations under Regulation Best Interest (Reg BI) and Form CRS.

SEC/CORPORATE - Acting SEC Chair Lee Provides Public Statement Welcoming Public Comment on Climate Change Disclosures - On March 15, Acting Securities and Exchange Commission Chair Allison Herren Lee made a public statement (Statement) requesting public input from investors, registrants and other market participants regarding climate change disclosures. In light of increased demand for...

On March 11, the Consumer Financial Protection Bureau (CFPB) announced the rescission of its January 24, 2020 policy statement entitled, "Statement of Policy Regarding Prohibition on Abusive Acts or Practices" (Prior Policy).

Introduction This Aviation Advisory considers the desirability of registering a new international interest at the International Registry corresponding to the extension of the term of a lease of an aircraft, airframe or engine, as to which an international interest has already been registered.

BROKER-DEALER - SEC Issues No Action Letter on Treatment of Reserved Powers Trust as Non-US Person by Non-US Investment Adviser for Registration Exemption - On March 5, the Securities Exchange Commission’s Division of Investment Management issued a no-action letter (the No-Action Letter) relating to the treatment of a Reserved Powers Trust as a non-US person by a non-US investment adviser...

Environmental, social and governance (ESG) matters will increasingly be a priority for the Securities and Exchange Commission (SEC) as evidenced by...

BROKER-DEALER - SEC Announces 2021 Examination Priorities - On March 3, the Securities and Exchange Commission’s Division of Examinations announced its examination priorities for 2021. These priorities include a greater focus on climate-related risks, conflicts of interests for brokers and investment advisers, and attendant risks related to FinTech. Please see full Newsletter below for...