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DODD FRANK: 2013 the Regulators Extend Their Reach Into the Capital Markets Seventh Annual Capital Markets Symposium October 2, 2013 DODD FRANK: 2013 The Regulators Extend Their Reach into the Capital Markets Symposium_4.indd 1 9/24/2013 11:28:44 AM Herrick, Feinstein LLP’s Seventh Annual Capital Markets Symposium October 2, 2013 DODD FRANK: 2013 The Regulators Extend Their Reach into the Capital Markets Keynote Speaker: Jill E. Sommers Former Commissioner of the Commodity Futures Trading Commission Symposium Faculty: Michael Otten Therese Doherty Executive Director, Legal, Nomura Holdings America Partner, Herrick, Feinstein LLP Deborah Prutzman Irwin Latner Chief Executive Officer, Partner, Herrick, Feinstein LLP Regulatory Fundamentals Group LLC Patrick Sweeney Steven Schwartz Partner, Herrick, Feinstein LLP Global Head of Enforcement, Chicago Mercantile Exchange Symposium_4.indd 3 9/24/2013 1:42:05 PM Contents Speaker Bios 1 Symposium Materials Regulation of Swap Dealers under Title VII of the Dodd-Frank Act 9 By Patrick D. Sweeney and Samuel Bazian Herrick, Feinstein LLP Regulation of End Users of Swap Transactions under Dodd-Frank 23 By Patrick D. Sweeney and Marc Shepsman Herrick, Feinstein LLP Cross Border Application of U.S. Swap Regulations: 35 Conflicts Abound at Home and Abroad By Patrick D. Sweeney, Adam D. Wolper and Kyle Shenfeld Herrick, Feinstein LLP What’s Happening in Enforcement? 43 By Therese M. Doherty, LisaMarie F. Collins and Philip W. Raimondi Herrick, Feinstein LLP SEC Focus Areas Regarding Investment Advisers 51 By Irwin M. Latner and John D. Cleaver Herrick, Feinstein LLP Broker-Dealer Registration Issues Involving Private Funds 63 By Irwin M. Latner and Jessica D. Wessel Herrick, Feinstein LLP Symposium_4.indd 4 9/24/2013 6:06:55 PM Speaker Bios Jill E. Sommers Former Commissioner of the Commodity Futures Trading Commission Jill E. Sommers was nominated by both President George W. Bush and President Barack Obama, confirmed twice by the United States Senate and served two consecutive terms as a Commissioner of the Commodity Futures Trading Commission. She ended her six years of service on July 8, 2013. During her time at the agency, Commissioner Sommers was a consistent advocate for common sense regulation that included a thorough cost benefit analysis. In November of 2011, Ms. Sommers was named senior Commissioner with respect to MF Global matters, including overseeing the enforcement division’s investigation and ultimate filing of charges against both the companies as well as senior MF Global executives. Commissioner Sommers served as Chairman and Designated Federal Official of the Commission’s Global Markets Advisory Committee (GMAC), which discussed issues of concern to exchanges, firms, market users and the Commission regarding the regulatory challenges of a global marketplace. She also had the opportunity to represent the United States throughout the world while serving as the Commission Representative to the Technical Committee meetings of the International Organization of Securities Commissions (IOSCO). Ms. Sommers has worked in the commodity futures and options industry in a variety of capacities throughout her career. She served as Policy Director and Head of GovernmentAffairs for the International Swaps and Derivatives Association, where she worked on a number of over-the counter derivatives issues. Prior to that, Ms. Sommers worked in the Government Affairs Office of the Chicago Mercantile Exchange (CME), where she was instrumental in overseeing regulatory and legislative affairs for the exchange. Ms. Sommers started her career in Washington in 1991 as an intern for Senator Robert J. Dole (R-KS). She has continued her work engaging with Members of Congress on a variety of issues over the past twenty years including three Commodity Exchange Act Reauthorizations. A native of Fort Scott, Kansas, Ms. Sommers holds a Bachelor of Arts degree from the University of Kansas. She and her husband, Mike, currently reside in the Washington, DC area and have three children ages 11, 10 and 9. Herrick, Feinstein LLP 1 Bios Sommers, Otten, Prutzman.indd 1 9/24/2013 11:30:15 AM Speaker Bios Michael J. Otten Executive Director in the Legal Department of Nomura Holding America Inc. Michael J. Otten is an Executive Director in the Legal Department of Nomura Holding America Inc. where he works closely with Nomura’s registered Swap Dealers, Futures Commission Merchant, Broker-Dealer, and affiliates world-wide on implementation of regulatory reforms. Prior to joining Nomura in July 2012, he spent nearly 10 years at the Commodity Futures Trading Commission (“Commission”) in Washington, DC. While at the Commission, Michael most recently served as Legal Counsel to Commissioner Jill E. Sommers, and also served as Legal Counsel to Acting Chairman Walt Lukken and Chairman Reuben Jeffery. Michael began his tenure at the Commission in the Division of Enforcement, where he served as a Chief Trial Attorney. Prior to joining the Commission, Michael was a Partner in the Litigation Division of LeClair Ryan, a Richmond, Virginia law firm. Michael began his legal career on active-duty in the United States Air Force, Judge Advocate General’s Corps, serving as a Captain from 1994 until 1998. Michael is a graduate of Boston College Law School and Manhattanville College. 2 Herrick, Feinstein LLP Herrick, Feinstein LLP 3 Bios Sommers, Otten, Prutzman.indd 2 9/24/2013 11:30:15 AM Deborah Prutzman Chief Executive Officer of the Regulatory Fundamentals Group LLC Deborah Prutzman is the Chief Executive Officer of the Regulatory Fundamentals Group LLC. She has an exceptionally wide-ranging and deep background in the domestic and international financial services industry, and has hands-on experience in regulatory risk management and corporate governance. She has earned a reputation for helping financial institutions thrive despite difficult business circumstances. Ms. Prutzman has assembled a team of highly skilled experts with decades of expertise in the financial services regulatory environment. RFG’s objective is to bring its clients a level of counsel, creativity, and practical expertise that cuts across complex technical areas in a manner not readily available elsewhere. RFG offers an experienced brain trust that has more than 250 years negotiating financial services issues, particularly in the banking, payment and clearing systems, and asset management spaces. As General Counsel to the Merrill Lynch Global Bank Group, Ms. Prutzman conceived and managed the reorganization of Merrill’s U.S. banking operations to create a full service federal thrift, which enabled Merrill to offer banking services throughout its network of financial advisors. She built and recruited a 60+ person team of legal and compliance professionals. Her team handled regulatory and product issues with a unique focus on “knowledge management” systems designed to assure both quality and consistency of results and business partner understanding of key issues. As part of this process, Ms. Prutzman designed the compliance infrastructure and recruited the compliance team professionals for the ML banks in the United States. In addition, she was able to obtain favorable regulatory rulings in a variety of circumstances, including the handling of “brokered deposits.” Ms. Prutzman has also served as General Counsel of CLS Services, the world’s foreign exchange netting system, during its start-up stages. In the absence of precedent, she developed rules and contracts that satisfied the laws and regulations of 13 jurisdictions and allowed 63 of the world’s largest financial institutions to clear foreign exchange transactions on a real-time, continuously linked basis. She recruited and staffed the legal and compliance function. Earlier in her career, Ms. Prutzman was General Counsel for the New York Clearing House Association. Also, Ms. Prutzman served as Senior Vice President and Deputy General Counsel of Chemical Bank. Ms. Prutzman has been a partner at Paul, Weiss, Rifkind, Wharton & Garrison and Arnold & Porter. She earned her law degree from Columbia University. 2 Herrick, Feinstein LLP Herrick, Feinstein LLP 3 Bios Sommers, Otten, Prutzman.indd 3 9/24/2013 11:30:15 AM Speaker Bios Steven M. Schwartz Executive Director, Global Head of Enforcement, CME Group Steven M. Schwartz serves as Executive Director, Global Head of Enforcement of CME Group. He is responsible for oversight of the company’s Market Regulation Department enforcement function. Prior to his role as Global Head of Enforcement, he joined the company in 2011 as the Regional Head of Enforcement for New York. Prior to joining the company, he had over 20 years of litigation experience at various law firms. Most recently he was a partner at Winston & Strawn where he litigated complex commercial cases in the futures, securities and bankruptcy areas. He also worked for Hertzog, Calamari & Gleason and Webster & Sheffield where he litigated complex commercial cases, including some involving securities and futures trading, bankruptcy matters and product liability actions. He earned a bachelor’s degree in business management from the State University of New York at Binghamton and a J.D. from Cornell Law School where he graduated Magna Cum Laude and Order of the Coif. He also served as an Editor on the Cornell Law Review. 4 Herrick, Feinstein LLP Herrick, Feinstein LLP 5 Round 2 of bios.indd 4 9/24/2013 1:24:35 PM Therese M. Doherty Partner and Co-Chair of the Securities and Commodities Litigation and Regulatory Practice Group, Herrick, Feinstein Therese M. Doherty is a senior partner
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