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Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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NEWSLETTERS & ALERTS
Rules & Regulations
'LET THEM EAT CAKE!' But Not on Wall Street
[Photo: Chris Dodd and Barney Frank have a 'victory lap', courtesy of President Obama]
by Howard Haykin
Following the mandates of the Dodd-Frank Act, six federal regulators jointly proposed in 2016 a rule that would impose significant restrictions on incentive-based compensation arrangements at large financial institutions - including banks, investment advisors, broker-dealers and credit unions.
The 6 regulators were: (i) National Credit Union Administration; (ii) Office of the Comptroller of the Currency; (iii) Federal Deposit Insurance Corporation; (iv) Federal Housing Financing Agency; (v) the Federal Reserve System; and, (vi) the SEC.
Among other things, the proposed rule would:
- require all incentive-based compensation payable to a “senior executive officer” or “significant-risk taker” at a Level 1 or Level 2 covered institution to be subject to a 7-year claw-back requirement;
- require a substantial portion of incentive-based compensation payable to a “senior executive officer” or “significant-risk taker” at a Level 1 or Level 2 covered institution to be deferred and subject to the risk of forfeiture;
- expand the group of executives considered “senior executive officers” under the rule;
- prohibit Level 1 and Level 2 covered institutions from accelerating the incentive-based compensation that is required to be deferred, other than in the event of death or disability.
SO MUCH FOR THE BEST INTENTIONS OF GOVERNMENT. On Thursday, the White House released its bi-annual regulatory agenda on regulation and, to no one’s surprise, the proposed rule was listed under the heading “Long-Term Action” - rather than "Pending." The LTA designation, in Washington-speak, means the federal government has halted work on the proposed rule and it's basically 'dead in the water."
[For the record, the law was supposed to be completed by 2011.]