SEC Proposes Rules to Require Disclosure Regarding the Relationship Between Executive Pay and Company Financial Performance

On April 29, the Securities and Exchange Commission published proposed rules that would require companies to disclose the relationship between executive compensation and the financial performance of the company, as well as how the company compares to members of its peer group. Comments to the proposed rule are due 60 days after publication in the Federal Register. Release. Proposed Rule.

SEC Proposes Rules for Cross-Border Security-Based Swap Transactions

On April 29, the Securities and Exchange Commission published proposed rules that would require non-United States persons that use United States personnel to arrange, negotiate or execute a security-based swap transaction in connection with its dealing activity to include such transaction for purposes of the de minimis exception set forth in Exchange Act Section 3(a)(71)(D). Comments to the proposed rule are due 60 days after publication in the Federal Register. Release. Proposed Rule.

HUD Announces Changes to Distressed Asset Stabilization Program

On April 24, the U.S. Department of Housing and Urban Development changed its Distressed Asset Stabilization Program to require loan servicers to wait one-year before initiating a foreclosure action. Servicers will also be required to evaluate all borrowers for modifications under the Home Affordable Modification Program or other loss mitigation program. Release.

On April 28, Moody's released its Rating Methodology for the Homebuilding and Property Development Industry. Report.

On April 27, DBRS released its Rating Canadian Covered Bonds Methodology. Report.

On April 27, S&P updated its Bank Rating Methodology and Assumptions to add a new Additional Loss-Absorbing Capacity component, effective immediately. Report.

On April 24, Fitch released its updated U.S. Auto Lease ABS Ratings Criteria. Report.

SEC Staff Issues Update Guidance Regarding Cybersecurity

Recently, the Staff of the Division of Investment Management of the Securities and Exchange Commission (the "Staff") issued updated Guidance that highlights the importance of cybersecurity of registered investment funds and registered investment advisers. The Guidance discusses a number of measures that funds and advisers may wish to consider when addressing cybersecurity risks. In particular, the Staff identified a number of measures that funds and advisers may with to consider in addressing cybersecurity risk. It further advised that funds and advisers should identify their respective compliance obligations when assessing their ability to prevent, detect and respond to cyber attacks. Fund managers and advisers should anticipate that cybersecurity will be a focal point of the Staff's examination program. Guidance Update.

New York Court of Appeals Hears Arguments on RMBS Put-Back Claim Statute of Limitations

On April 30, New York's highest court heard arguments in ACE Securities Corp. v. DB Structured Products Inc. regarding the accrual date for RMBS put-back claims – i.e., the date on which the statute of limitations begins to run. Plaintiff ACE appealed an intermediate appellate court's ruling that claims for breaches of representations and warranties are time-barred unless brought within six years of the transaction's closing date. ACE argued that the claim does not accrue, and the statute of limitations does not begin to run, until a demand for cure or repurchase has been made and rejected, contending that investors may not know of the alleged representation and warranty breaches within six years of closing. The defendant argued that if the Court adopted plaintiff's approach and ruled that a put-back claim does not accrue until demand is made, plaintiffs would be able to tactically take a "wait and see" attitude. Depending on how the deal performs, they potentially could wait for decades after a transaction was entered into before making a repurchase demand, and only then bring suit if the demand is rejected.

European Commission's CCP Recovery and Resolution Roadmap

The European Commission has published a roadmap for non-bank recovery and resolution to provide a high-level public description of the planned initiative. Roadmaps give a first description of planned Commission initiatives – they describe the problem and set out possible policy options. They also provide an overview of the different planned stages in the development of the initiative, including consultation of stakeholders and impact assessment work. This roadmap identifies central counterparties as the sector for which a recovery and resolution framework may be necessary. An impact assessment is currently under preparation, with a legislative proposal on central counterparties expected in the third quarter of 2015.

European Parliament Votes to Adopt ECON Report on MMF Regulation

On April 29, the European Parliament adopted a report by its Committee on Economic and Monetary Affairs (ECON) containing amendments to the European Commission's proposed Regulations on Money Market Funds (MMF Regulation). The ECON report proposes:

• limiting constant net asset value (CNAV) MMFs to two types (retail CNAV MMFs and public debt CNAV MMFs);
• introducing low volatility net asset value MMFs, requiring MMFs to divest their asset portfolios and have in place sound stress-testing processes;
• preventing MMFs from receiving external support from third parties, including their sponsors;
• requiring MMFs to report certain information to their investors on a weekly basis; and
• requiring public debt and retail CNAV MMFs and low volatility net asset value MMFs to apply "liquidity fees" and "redemption gates" to help stem sudden outflows.