 Cadwalader lawyers author timely memoranda on significant developments in the law in order to keep our clients and friends apprised as to what these developments may mean for their business. |
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Recent Developments Concerning ERISA at the Department of Labor
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This summer has proven to be one of significant activity at the U.S. Department of Labor (the “DOL”) with respect to the refinement of two significant exemptions to the prohibited transaction provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In July, the DOL amended Prohibited Transaction Exemption (“PTE”) 84-14, 75 Fed. Reg. 38837 (July 6, 2010) (the “QPAM Exemption”) to permit a qualified professional asset manager (a “QPAM”) to manage an investment fund containing assets of such QPAM’s own employee benefit plan. In July, the DOL published an interim final regulation clarifying the disclosure necessary for plan fiduciaries in concluding whether a contract or arrangement is “reasonable” in order to assist such fiduciaries in deciding whether the statutory exemption contained in Section 408(b)(2) of ERISA is available with respect to services provided by a party in interest to a plan.
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August 31, 2010 |  Download
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UK Tax Summer Update 2010
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The summer of 2010 has seen a number of important tax developments and initiatives which will set the context of key legislative changes for the remainder of 2010. Foremost among the raft of consultations and discussion documents which have been published by the Government have been the proposals regarding a UK bank levy, a consultation paper on the overseas branches of UK companies and further insight into the proposed anti-avoidance measures to counteract “group mismatch schemes”. We have included a summary of these initiatives in this Clients & Friends Memorandum as well as some important, but perhaps less prominent, changes such as the introduction of a double tax treaty “passport scheme” and a summary of the new guidance on the changes to the complex legislation relating to debt buybacks.
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August 27, 2010 | Download
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China’s Anti-tax Avoidance Measures for Offshore SPVs
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In a circular issued on 10 December 2009, the State Administration of Taxation (“SAT”) made clear its intention to target offshore transactions involving the indirect transfer of PRC enterprises (Notice on Strengthening the Management of Enterprise Income Tax Collection of Proceeds from Equity Transfers by Non-Resident Enterprises Guoshuihan [2009] No. 698) (“Circular 698”). Circular 698 has ushered in a new era in the China cross-border transactional landscape, and represents the most recent challenge for offshore holding companies or special purpose vehicle (“SPV”) structures in the PRC.
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August 24, 2010 | Download
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IRS Guidance on Release of Real Properties Securing Mortgage Loans Held by REMICs
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On August 17, 2010, the Internal Revenue Service (the “IRS”) released Revenue Procedure 2010-30 (the “Revenue Procedure”), which clarifies Treasury regulations issued in September 2009 (the “Modification Regulations”), concerning changes in the collateral securing mortgage loans held by real estate mortgage investment conduits (“REMICs”).
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August 18, 2010 | Download
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Changes to the Regulation of Broker-Dealers and Investment Advisers Under Title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act
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Part I of this memorandum focuses on Title IX of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) as it relates to the regulation by the Securities and Exchange Commission (“SEC”) of broker-dealers and, to a lesser extent, investment advisers. Part II of this memorandum covers a number of miscellaneous provisions included within Title IX that may affect broker-dealers. Part III describes studies to be conducted by the SEC, the reorganization of the SEC, and a provision that affects current beneficial ownership and short swing profit reporting requirements. Other memoranda prepared by Cadwalader cover the remaining provisions of Title IX, which include (i) significant requirements relevant to credit rating agencies and structured finance products, and (ii) rules related to executive compensation and corporate governance that apply to public companies generally, not merely to those engaged in financial activities.
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August 12, 2010 | Download
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The Education Jobs and Medicaid Assistance Act of 2010
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Yesterday, President Obama signed into law the Education Jobs and Medicaid Assistance Act of 2010 (H.R. 1586) (the “Act”). The Act allocates approximately $10 billion to local school districts to prevent teacher layoffs due to state revenue shortfalls, and approximately $16 billion to help states pay rising Medicaid costs without having to lay off public and private sector employees to raise funds.
The Act funds approximately $1.1 billion of the allocations by eliminating the advance payment option for the earned income credit, and approximately $9 billion of the allocations through several changes to the international provisions of the Internal Revenue Code. Part II of this memorandum lists these international tax law changes, and Part III explains them in greater detail.
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August 11, 2010 | Download
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The EU Commission Proposes Onerous Requirements for Rated Structured Finance Instruments
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The EU Commission has recently proposed amendments to Regulation (EC) No 1060/2009 (the “CRA Regulation”) of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (“CRAs”), which include a proposal to require all information necessary for the CRA hired by an issuer to determine or monitor the credit rating of a structured finance instrument to be made available to non-hired CRAs.
The stated purposes of the proposal are to reinforce competition between CRAs; to help avoid possible conflicts of interest under the issuer-pays model; to enhance transparency and the quality of ratings; and to promote the issuance of unsolicited ratings . The proposal follows closely the recent amendments to Rule 17g-5 of the Securities Exchange Act of 1934 in the U.S.
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July 22, 2010 | Download
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The Dodd-Frank Act: How It Impacts Specific Institutions, Entities and Transactions
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The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act") has been passed by both houses of Congress and is awaiting signature by President Obama. The Act consists of sixteen distinct Titles on a wide variety of topics. Cadwalader has prepared a short summary of the Act and a series of memoranda focused on the Act's application to specific industries, entities and transactions.
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July 20, 2010 | Download
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Summary of the Titles of the Dodd-Frank Wall Street Reform and Consumer Protection Act
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This Overview Memorandum is intended to provide a very brief summary of those Titles of the Act that are most significant to our clients. In addition to this Overview Memorandum, Cadwalader has prepared a series of memoranda, each discussing a different aspect of the Act and how it will affect different industries, types of entities and transactions.
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July 20, 2010 | Download
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Changes to the Regulation of Banks, Thrifts, and Holding Companies Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
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The focus of this Memorandum is on the material changes to U.S. banking regulation made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act” or the “Dodd-Frank Act”), including the potential regulation by the Board of Governors of the Federal Reserve System of nonbank financial companies deemed systemically significant.
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July 20, 2010 | Download
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Regulation of Systematically Significant NonBanks Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
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The focus of this Memorandum is the potential regulation by the Board of Governors of the Federal Reserve System, pursuant to the newly-passed Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act” or the “Dodd-Frank Act”), of nonbank financial companies designated as “systemically significant” as provided by Titles I and VI of the Act, including the Volcker Rule.
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July 20, 2010 | Download
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Orderly Liquidation of Financial Companies, Including Executive Compensation Clawback, Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
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Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“WSRCPA”)
represents Congress’ attempt to address companies considered “too big to fail.” The statute creates a new “orderly liquidation authority” (“OLA”), which allows the Federal Deposit Insurance Corporation (“FDIC”) to seize control of a financial company whose imminent collapse is determined to threaten the financial system as a whole. Commencement of a receivership under the OLA would preempt any proceedings under the Bankruptcy Code. Thus, lenders, rating agencies, and others seeking to transact business with a company, or an affiliate of a company, that could potentially be considered a systemic risk will have to consider the impact on creditors’ rights of both the Bankruptcy Code and the OLA. Further, the OLA is solely a liquidation remedy. Rehabilitation or reorganization is not an option, and the ability of a debtor to stay in possession is eliminated.
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July 20, 2010 | Download
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Hedge Fund Regulation Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
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The inevitable heightened regulation of the hedge fund industry has come to fruition, with the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”) by the Senate on July 15, 2010. While the Act could be worse – it does not appear to be the operational and expense burden to hedge funds that Sarbanes-Oxley is for corporate America – its ultimate effects remain to be seen, as much of the detailed formulation and implementation of the Act’s largely ambiguous provisions are left to future rulemaking by a wide range of increasingly powerful governmental regulators having tremendous discretionary authority, such as the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Board of Governors of the Federal Reserve System, and the to-be-established Financial Stability Oversight Council.
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July 20, 2010 | Download
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Insurance Reforms Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
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On July 15, 2010, the Senate voted in favor of adopting the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). The Act is far reaching in scope and represents the culmination of months of debate and intense lobbying. The Act was precipitated by the financial crisis that began in 2007 and, therefore, its primary goal is to prevent a recurrence. The focus of this Memorandum is Title V – “Insurance” – of the Act.
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July 20, 2010 | Download
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The New Scheme for the Regulation of Swaps, with Appendices on Retroactivity, Special Entities and Tax, Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
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Title VII (the “Derivatives Legislation” or the “Legislation”) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) is among the most far reaching and controversial sets of statutory changes included within the Act. The Derivatives Legislation will give primary authority to the Commodity Futures Trading Commission (the “CFTC”) and the Securities Exchange Commission (the “SEC”; and together with the CFTC, the “Commissions”) to regulate the swaps market, both as to transactions and participants, although the various banking regulators (the “Bank Regulators”; and together with the Commissions, the “Regulators”) will retain substantial authority with respect to banks.
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July 20, 2010 | Download
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Regulation of End Users of Swaps Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
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The purpose of this memorandum is to provide an overview of the application of Title VII (the “Derivatives Legislation” or the “Legislation”) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) to end users, particularly (i) operating corporations (“Corporates”), such as manufacturing companies, insurance companies and airlines (all of which may be impacted somewhat differently), (ii) state and other municipal entities (“Munis”), and (iii) public and private benefit plans (“Plans”; and collectively with Corporates and Munis, “end users”).
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July 20, 2010 | Download
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Reforms to the Asset-Backed Securitization Process and the Regulation of Credit Rating Agencies under Dodd-Frank Wall Street Reform and Consumer Protection Act
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On July 15, 2010, the Senate voted in favor of adopting the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). The Act is far reaching in scope and represents the culmination of months of debate and intense lobbying. To assist our clients in navigating and digesting the portions of the Act that are significant to their lines of business, Cadwalader has prepared a series of Clients & Friends memoranda, each addressing different aspects of the Act. The focus of this Memorandum is Title IX – Subtitle D “Improvements to the Asset-Backed Securitization Process” and Title IX – Subtitle C “Improvements to the Regulation of Credit Rating Agencies”.
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July 20, 2010 | Download
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Executive Compensation and Corporate Governance Provisions Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
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The focus of this Memorandum is Title IX – Subtitle E “Accountability and Executive Compensation” and Title IX – Subtitle G “Strengthening Corporate Governance” of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). We note that the Act requires the Securities and Exchange Commission (“SEC”), or other specified federal regulator, to develop rules in order to fully implement many of these compensation and corporate governance provisions. Accordingly, the ultimate impact of such provisions will in large part depend on how such rules are implemented.
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July 20, 2010 | Download
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Amendments to SOX, Including Section 404(b) Exemption for Nonaccelerated Filers, Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
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This memorandum is focused on certain provisions of Title IX of the Act that relate to SOX Section 404, including an amendment to SOX Section 404 which exempts nonaccelerated filers from the SOX Section 404(b) requirement to obtain an auditors’ report on management’s assessment of the effectiveness of the company’s internal control over financial reporting.
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July 20, 2010 | Download
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BP in the Wake of the Deepwater Horizon Incident and the Bankruptcy Implications of Mounting Environmental Liabilities
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On April 20, 2010, an explosion on the Deepwater Horizon oil drilling rig located off the coast of Louisiana killed eleven crewmen and set off what is now considered the largest offshore oil spill in U.S. history. As a result, BP p.l.c. (“BP”), the parent company of the British Petroleum multi-national corporation, faces mounting liabilities related to the damages caused by the disaster and hundreds of lawsuits that have been filed in numerous U.S. state and federal courts. This memorandum considers how BP may consolidate and address the present and future claims arising from the Deepwater Horizon incident, with particular attention to applicable environmental laws, non-bankruptcy alternatives available to BP, and the issues likely to be raised by a BP bankruptcy filing.
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July 7, 2010 | Download
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Second Circuit Interpretation of "Absolute and Unconditional Clause" May limit the Effectiveness of Limited Recourse and Similar Provisions Common to Structured Finance Indentures
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On June 1, 2010, the U.S. Court of Appeals for the Second Circuit decided a case with broad implications for issuers of limited recourse notes. This is particularly applicable in the context of structured finance transactions and notes issued by special purpose entities. In The Bank of New York v. First Millennium, Inc., the Second Circuit found that the holders of notes issued by a trust of which The Bank of New York (BNY) was trustee, in favor of NextBank, N.A. (NextBank) had a valid claim to all assets held in the trust despite a limited recourse provision in the indenture.
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June 24, 2010 | Download
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The Emergency UK Budget 2010: Key Taxation Aspects
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On Tuesday 22 June 2010, the ‘Emergency’ Budget of the UK’s new Coalition Government was delivered by the Chancellor of the Exchequer. Given that the Government has decided to achieve its aim of eliminating the bulk of the UK’s public sector structural deficit by 2014/15 through spending reductions (as to 80 per cent.) and tax increases (as to 20 per cent.), the changes announced to the UK’s tax regime appeared relatively mild in comparison and, indeed, in some cases quite encouraging.
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June 23, 2010 | Download
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Some Concerns with the Regulation of Large Non-Bank Holding Companies
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The Wall Street Reform and Consumer Protection Act of 2009 (the “House bill”) and the Restoring American Financial Stability Act of 2010 (the “Senate bill”; and together with the House bill, the “Legislation”) both contain a requirement that large financial firms that do not own banks (“NonBHCs”) should be regulated as if they were bank holding companies (“BHCs”).
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June 3, 2010 | Download
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U.S. Senate Bill Creates New Regime for Orderly Liquidation of Financial Companies That Present Systemic Risk
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The comprehensive financial reform bill recently passed by the Senate1 creates a new “orderly liquidation authority” (“OLA”) that would allow the Federal Deposit Insurance Corporation (“FDIC”) to seize control of a financial company whose imminent collapse is determined to threaten the financial system as a whole. This measure — which awaits reconciliation with a similar bill passed by the House of Representatives late last year — represents Congress’ attempt to address companies considered “too big to fail.”
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June 1, 2010 | Download
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The Changing Face of Hedge Fund Regulation
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May 27, 2010 | Download
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Securitization Reforms: What is the Current State of Play?
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May 26, 2010 | Download
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U.S. District Court Affirms Delaware Bankruptcy Court Decision in SemCrude Prohibiting Triangular Setoff
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May 25, 2010 | Download
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FDIC Seeks "Stronger, Sustainable Securitizations" by Imposing Additional Conditions to Eligibility for Securitization Safe Harbor
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May 21, 2010 | Download
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Lehman Bankruptcy Court Rules Safe Harbors Do Not Override Setoff Mutuality Requirement
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May 6, 2010 | Download
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Some Concerns with the Derivatives Legislation
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May 3, 2010 | Download
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Blue Sky Issues of Financial Reform Legislation for Hedge Fund Advisers
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April 21, 2010 | Download
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SEC Proposes Significant Enhancements to Regulation of Asset-Backed Securities
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April 20, 2010 | Download
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Posting Independent Amounts under Derivative Transactions: Industry Recommendations for End User Protection
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April 16, 2010 | Download
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China’s Foreign-Invested Partnership Rules Take Effect
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April 8, 2010 | Download
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SEC Announces Proposal to Significantly Enhance the Regulation of Asset-Backed Securities
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April 7, 2010 | Download
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Cadwalader Files Amici Brief in Peter Cooper Village Foreclosure on Behalf of LNR and American Capital
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March 31, 2010 | Download
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New U.S. Covered Bond Legislation Introduced
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March 25, 2010 | Download
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UK Budget 2010: Key Taxation Aspects
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March 25, 2010 | Download
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The Hiring Incentives to Restore Employment Act
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March 22, 2010 | Download
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Interim Final Rule Interpreting The Helping Families Save Their Homes Act of 2009 Takes Effect
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March 5, 2010 | Download
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Recent Changes to SEC Rating Agency Reform Impose Burdensome Requirements on Structured Products Participants
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March 3, 2010 | Download
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Proposed Regulations Issued With Respect to FBAR Filing Requirements
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March 1, 2010 | Download
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The Securities and Exchange Commission Approves Nasdaq Rule on Sponsored Access and Proposes a Rule to Prohibit Naked Sponsored Access; Issues Concept Release on Market Structure
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February 9, 2010 | Download
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First State AG in the Nation Sues to Enforce HIPAA
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February 8, 2010 | Download
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House Regulatory Reform Bill May Impose Further Burdens On Large Funds
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February 4, 2010 | Download
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The Obama Administration’s Fiscal Year 2011 Revenue Proposals
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February 3, 2010 | Download
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Lehman Court Finds Payment Priority Provision Is Unenforceable Ipso Facto Clause, And Must Be Part Of Swap For Safe Harbor Protection
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January 29, 2010 | Download
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U.S. Federal Estate, Gift and Generation Skipping Transfer (“GST”) Taxes
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January 29, 2010 | Download
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CFTC Proposes to Set Position Limits in the Energy Futures Market
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January 28, 2010 | Download
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IRS Proposes Reporting Requirements for Uncertain Tax Positions Under FIN 48
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January 28, 2010 | Download
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