Cabinet News & Views

In This Issue ...

While there was considerable public attention in the U.S. last week on the soap opera drama surrounding the election of a new Speaker of the House, the real work of government has continued throughout the political power transfer in Washington.

As we are seeing in Washington, along with London and Europe, there is a sharp focus on the very important issues of the day, including − of course! − climate and crypto. This week we also take a look at an important development at the SEC, along with banking policy updates from the Federal Reserve and the European Banking Authority.

Any comments or questions? Just drop me a note here.

Daniel Meade
Editor, Cabinet News and Views

FRB Chair Powell Speaks on Central Bank Independence

By Daniel Meade

Partner | Financial Regulation

Federal Reserve Board Chair Jerome Powell spoke at a symposium hosted by the Swedish Central Bank on Tuesday. In his speech, Chair Powell highlighted three main points: (1) that Federal Reserve monetary policy independence “is an important and broadly supported institutional arrangement that has served the American public well”; (2) “the Fed must continuously earn that independence … by providing transparency to facilitate understanding and effective oversight by the public and their elected representatives in Congress”; and (3) “stick to our knitting.”

On 20 December 2022, the European Banking Authority published the final report on its draft Regulatory Technical Standards on the identification of a group of “connected clients” under Article 4(4) of the Capital Requirements Regulation (Regulation (EU) No 575/2013).

By Peter Y. Malyshev

Partner | Financial Regulation

In November 2022, the International Organization of Securities Commissions published two reports − one on Compliance Carbon Markets and one on Voluntary Carbon Markets. IOSCO continues to seek comments from market participants on key structural considerations for these markets, such as optimal design, efficient regulation, and improved integrity of the carbon credits. Comments are due by February 10, 2023.

By Erica Hogan

Partner | Corporate

On December 14, 2022, the U.S. Securities and Exchange Commission unanimously adopted final rules adding new conditions applicable to Rule 10b5-1 trading plans and requiring disclosure of the adoption, modification or termination of Rule 10b5-1 trading plans by directors and officers of public companies. In addition, the new rules require disclosure of option grant practices and insider trading policies and procedures of public companies and amend disclosure requirements for option grants to named executive officers close in time to an issuer’s disclosure of material nonpublic information. Finally, the new rules amend Forms 4 and 5 to require reporting persons to identify transactions made pursuant to a Rule 10b5-1 trading plan and disclose all gifts of equity securities on Form 4.

By Ingrid Bagby

Partner | Financial Restructuring

By Michele Maman

Partner | Financial Restructuring

The “crypto winter” of 2022 brought a bear market and a recent wave of bankruptcies to the crypto industry, leaving some retail customers of crypto exchanges frozen out of their accounts. As the bankruptcy filings mounted from Voyager Digital and Celsius Network to FTX US and BlockFi, lawyers, industry experts, market participants and retail customers wondered alike – who owns the cryptocurrency stored on a debtor’s platform in the event of a bankruptcy? Although limited to the specific terms of the customer agreements at issue in Celsius, Judge Martin Glenn issued a ruling in the Celsius bankruptcy proceedings giving an initial indication as to how this inquiry may be assessed.