The Washington Report For week ended November 17, 2017 - KPMG United States
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Washington Report 360 | November 17, 2017

The Washington Report For week ended November 17, 2017

In this issue...


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  • Richard Cordray will resign as Director of the CFPB at the end of November, leaving open an appointment process for a successor that is expected to be contentious, including calls for changes to the CFPB leadership structure. In the near term, CFPB rulemaking and enforcement activities will continue to slow, and prudential regulators will likely continue supervisory attention in areas of risk management, compliance, and consumer protection.
  • The U.S. Senate confirmed the nomination of Joseph Otting to serve as the Comptroller of the Currency. A former banker and colleague of Treasury Secretary Mnuchin, he is expected to be in agreement with Treasury’s recommended bank regulatory reforms.
  • The SEC denied a request by the national securities exchanges and FINRA for a one-year extension to the November 15 initial reporting deadline to the Consolidated Audit Trail (CAT).
  • The Senate Banking Committee announced an initial agreement for regulatory relief that includes raising the SIFI threshold.
  • The SEC detailed its enforcement priorities for 2018.

Financial services policy news

  • Richard Cordray will resign as CFPB Director at the end of November, according to reports. Additionally, reports suggest Mick Mulvaney, Director of the Office of Management and Budget, will be named the interim CFPB Director. Mr. Mulvaney has been a strong and open critic of the Bureau.
  • Joseph Otting has been confirmed by the U.S. Senate to serve as the Comptroller of the Currency. News reports suggest Keith Noreika, Acting Comptroller, will resign from the OCC once Mr. Otting is sworn in.
  • The SEC Division of Enforcement issued a report reviewing its 2017 enforcement results and highlighting its 2018 enforcement priorities, which include protecting retail investors, cyber-related misconduct, investment advisor/broker-dealer issues, financial reporting and public company disclosures, and insider trading and market abuse.
  • The Global Foreign Exchange Committee said market participants operating under the voluntary FX Global Code should not undertake trading activity that utilizes information from the client's trade request during the “last look” window.
  • CFTC Chairman Christopher Giancarlo said the CFTC is considering a new approach to swaps execution that will use "licensure, testing and adoption and abidance of approved codes of industry conduct."
  • The International Association of Insurance Supervisors launched a public consultation on draft revisions to insurance core principles related to risk management and internal controls, investments, and solvency.

Financial services legislative and regulatory news

The SEC denied a request by the national securities exchanges and FINRA for a one-year extension to the initial phase of reporting to the CAT, which commenced November 15. Members of Congress and industry participants have similarly solicited the SEC to delay the CAT launch citing data security concerns.

The Republican chairman of the Senate Banking Committee and nine Democratic senators agreed to a tentative deal to raise the SIFI threshold for bank holding companies from $50 billion to $250 billion and exempt firms below the threshold from the Enhanced Prudential Standards requirements.

The House of Representatives passed the Market Data Protection Act of 2017, which requires the SEC, FINRA, and the CAT operator to safeguard and govern the storage of market data, market data sharing agreements, and academic research using market data.

The House of Representatives passed the 21st Century Flood Reform Act (H.R. 2874), which would reauthorize the National Flood Insurance Program for five years and implement several reforms, including private market competition.

The OCC issued a revisedBackground Investigationsbooklet of the Comptroller’s Licensing Manual, which outlines requirements to notify the OCC about changes in directors or senior executive officers.

The CFTC extended until November 15, 2020 no-action relief to swap execution facilities (SEFs) from the "occurs away" requirement in the definition of a "block trade" in CFTC regulation 43.2.

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