CFTC Solicits Public Comment on Swaps-Related Rulemakings in Response to U.S. District Court Order

On March 10, the CFTC issued a request for comment in response to an order issued by the U.S. District Court for the District of Columbia in the matter Securities Industry and Financial Markets Association, et al. v. United States Commodity Futures Trading Commission remanding eight swaps-related rulemakings to the CFTC to address what the court held to be inadequacies in the CFTC's explanation of its consideration of costs and benefits in those rulemakings, in particular in connection with cross-border activities. Comments must be received on or before May 11, 2015. Release.  Request for Comment.

On March 9, Moody's released its updated methodology for rating privately-financed public infrastructure (PFI/PPP/P3) projects. Report.

On March 9, Fitch released its updated criteria for rating single- and multi-name credit-linked notes. Report.

On March 6, Moody's released its updated methodology for rating trading companies (companies whose primary business involves trading commodities and/or goods) globally. Report.

On March 6, DBRS released its updated methodology for rating public-private partnerships (PPPs). Report.

Court Approves RMBS Settlement, Rejecting Institutional Investors' Attempts to Scuttle It

On March 12, Judge Katherine B. Forrest of the United States District Court for the Southern District of New York approved a $69 million settlement between the plaintiffs and defendants in Policemen's Annuity & Benefit Fund of the City of Chicago v. Bank of America and dismissed the case with prejudice. Plaintiffs, a class of investors, had sued Bank of America and U.S. Bancorp in their capacity as trustees for 50 Washington Mutual RMBS. Plaintiffs alleged that the trustees breached the Trusts' Governing Agreements and the duty of food faith and fair dealing, and violated the Trust Indenture Act. Judge Forrest's approval of the settlement came one week after she denied certain institutional investors' motion to intervene in the action for purposes of blocking the settlement. The institutional investors, led by BlackRock and PIMCO, currently are asserting derivative claims against U.S. Bank, as Trustee, on behalf of 843 RMBS Trusts, and asserted that the settlement excluded them while simultaneously releasing their claims as to RMBS Trusts that overlapped between the two actions. The Court disagreed, finding that although BlackRock and PIMCO were excused from the settlement, the settlement did not release the claims they were pursuing. Order Approving Settlement. Stipulation and Settlement. Order Re Motion to Intervene.

European Parliament Adopts MIF Regulation

On March 10, the European Parliament published a press release announcing that it has adopted the proposed Regulation on interchange fees for card-based payment transactions (MIF Regulation). The adopted text has not yet been made publicly available.

Among other things, the MIF Regulation is intended to lead to transparent fee-capping for cross-border and domestic retail purchases. It is hoped that the lower costs will benefit retailers and shoppers.

The MIF Regulation now needs to be formally adopted by the Council. The press release states that the MIF Regulation should apply six months after its entry into force. Press Release.

European Parliament Adopts ELTIF Regulation

On March 10, the European Parliament published a press release announcing that it has adopted the proposed Regulation on European Long-Term Investment Funds (ELTIF Regulation). The adopted text has not yet been made publicly available.

ELTIFs are vehicles designed to boost non-bank investment in the real economy across the EU. ELTIF investment funds will have to apply for authorisation, have a regulated structure and comply with uniform rules to ensure that they offer long-term and stable returns. ELTIF investors will have to make a long-term commitment as they will not be able to withdraw their money easily. However, to protect retail investors, the Parliament and the Council of the EU agreed "redemption" rules that would enable an ELTIF that has enough liquid assets to return an investor's money at the investor's request.

The ELTIF Regulation now needs to be formally adopted by the Council. The press release states that the ELTIF Regulation should apply six months after its entry into force. Press Release.

Prospectus Directive: Commission Consultation

On February 18, 2015, the European Commission published a consultation paper on the review of the Prospectus Directive (2003/71/EC). Matters on which the Commission seeks views include:

• When a prospectus is needed. In particular, views are sought as to whether the current exemption thresholds should be adjusted so that a larger number of offers can be carried out without a prospectus; whether there should be an exemption for secondary issues under certain conditions, in addition to the proportionate disclosure regime for rights issues; and whether a prospectus should be required when securities are admitted to trading on an MTF.
• The information that a prospectus should contain. Questions include whether the proportionate disclosure regime should be modified or extended; whether there should be a simplified prospectus for SMEs and companies with reduced market capitalization admitted to trading on an SME growth market; and whether there should be a maximum length for prospectuses.
• How prospectuses are approved, including the role of national competent authorities in the approval process of prospectuses and the equivalence of third-country prospectus regimes. In particular, the Commission asks whether the scrutiny and approval procedure should be made more transparent to the public and flexible for issuers, for example by making public the first draft prospectus filed with a competent authority for review and by allowing the issuer to carry out certain marketing activities, going beyond advertising, in the period between the first submission of a draft prospectus and the approval of the final version.

Responses must be received by May 13, 2015. The Commission intends to decide in the next months how the Prospectus Directive should be amended. It plans to prepare amendment proposals in the second half of 2015, to be presented to the European Parliament and Council of the EU, together with its review of the application of the Directive, in early 2016 at the latest.