Over the last several years, the Securities and Exchange Commission (the “SEC”) and the Commodities Futures Trading Commission (“CFTC”) have been laser-focused on the use of so called “off-channel communications” in the financial services industry. On the theory that employees’ use of personal devices to communicate about business matters violates the “books and records” rules as these communications are not saved in company systems, regulators have conducted intrusive and extensive investigations requiring employees to turn over their personal devices for review. SEC Chairperson Gary Gensler recently stated that “bookkeeping sweeps are ongoing,” having resulted in well over $1 billion in fines so far. While the first round of investigations focused on the large banks, this “sweep” has since spread to hedge funds, credit rating agencies, online banking platforms, and now, to regional banks.
Securities and Exchange Commission
SEC’s Proposed Conflicts of Interest Rule May Impede Hedging
By Aaron Levy on
Posted in Securities and Exchange Commission
Critics are warning that the SEC’s recently proposed rule (the “Proposed Rule”) prohibiting conflicts of interest in asset-backed securities (ABS) transactions may impede the ability of financial institutions, broker-dealers and others to enter into interest rate hedges and other risk-mitigating transactions.…
Continue Reading SEC’s Proposed Conflicts of Interest Rule May Impede Hedging