Top Story Operations Related

OFAC announced it has issued General License 16 authorizing U.S. persons to engage in specified transactions related to winding down or maintaining business involving EN+ Group PLC, JSC EuroSibEnergo, or any entity in which EN+ Group PLC or JSC EuroSibEnergo owns, directly or indirectly, a 50 percent or greater interest, until October 23, 2018.

The FDIC has released State Profiles for the first quarter of 2018. The Profiles are a quarterly summary of banking and economic conditions in each state.

The Federal Reserve has posted G.5 foreign exchange rate data for May 2018.

In an insignificant non-event on Friday, the OCC and FDIC issued a joint press release announcing their adoption of a final rule to shorten the standard settlement cycle for securities purchased or sold by the institutions they supervise. The final rule will require banks to settle most securities transactions within the number of business days in the standard settlement cycle followed by registered broker dealers in the United States unless otherwise agreed to by the parties at the time of the transaction. The effective date of the amendments is October 1, 2018.

The OCC and FDIC understand that, consistent with the industry's transition to T+2, OCC Bulletin 2017-22, and FDIC FIL 32-2017, banks are already complying with a two-business-day settlement standard.

UPDATE: The amendments to OCC regulations at 12 CFR Parts 12 and 151 and the FDIC regulations at 12 CFR Part 344 are scheduled for publication on June 7, 2018.

The Caribbean Financial Action Task Force (CFATF) Plenary reports it has agreed to remove Haiti from its special monitoring process given the forthcoming 4th Round Mutual Evaluation of Haiti. Saint Vincent and the Grenadines made significant progress in addressing the deficiencies identified in the 3rd round Mutual Evaluation and have successfully exited the follow-up process.

OFAC has made changes to an existing listing regarding the Al-Nusrah Front for the Peoples of Levant. Details of the change are in our OFAC Update.

The Internal Revenue Service has published in today's Federal Register proposed regulations that would amend the rules for determining whether information returns must be filed electronically. The proposed regulations would require that all information returns, regardless of type, be taken into account to determine whether a person meets the 250-return threshold and, therefore, must file the information returns electronically. The proposed regulations also would require any person required to file information returns electronically to file corrected information returns electronically, regardless of the number of corrected information returns being filed. Current rules provide a separate 250-return threshold for each type of information return. Comments and requests for a public hearing on the proposal will be accepted for 60 days (through July 30, 2018).

On Wednesday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two Iranian entities for committing serious human rights abuses on behalf of the Government of Iran, as well as three leaders of one of these entities. Additionally, OFAC designated an entity that has operated information or communications technology that facilitates monitoring or tracking that could assist or enable serious human rights abuses by or on behalf of the Government of Iran. Finally, OFAC designated two individuals for engaging in censorship activities that prohibit, limit, or penalize the exercise of freedom of expression or assembly by citizens of Iran, and one individual for acting for or on behalf of an entity engaged in such censorship activities. For identity information on the affected entities and individuals, and three updated OFAC listings, see our OFAC Update.

The Federal Reserve Board announced Wednesday it has approved for publication a proposed rule to simplify and tailor compliance requirements relating to the "Volcker rule." By statute, the Volcker rule generally prohibits banking entities from engaging in proprietary trading and from owning or controlling hedge funds or private equity funds. The proposed changes are intended to streamline the rule by eliminating or modifying requirements that are not necessary to effectively implement the statute, without diminishing the safety and soundness of banking entities. The proposal was developed by the five federal agencies responsible for administration of the Volcker rule -- the Board, the CFTC, the FDIC, the OCC, and the SEC. The proposal would:

• Tailor the rule's compliance requirements based on the size of a firm's trading assets and liabilities, with the most stringent requirements applied to firms with the most trading activity;
• Provide more clarity by revising the definition of "trading account" in the rule, in part by relying on commonly used accounting definitions;
• Clarify that firms that trade within appropriately developed internal risk limits are engaged in permissible market making or underwriting activity;
• Streamline the criteria that apply when a banking entity seeks to rely on the hedging exemption from the proprietary trading prohibition;
• Limit the impact of the Volcker rule on the foreign activity of foreign banks; and
• Simplify the trading activity information that banking entities are required to provide to the agencies.

The proposal will not be published until the other four agencies have individually approved it and any corrections are made. Comments will be accepted for 60 days following publication. A separate rulemaking will be undertaken by the agencies to implement the changes to the statutory Volcker Rule provisions made by the recently enacted Economic Growth, Regulatory Reform, and Consumer Protection Act (P. Law 115-174).

UPDATE: The SEC was the last of the five agencies to approve the proposal, on June 5. Publication should occur soon after that date, followed by the 60-day comment period.

FinCEN, the CFPB and the Treasury Department issued a joint Memorandum on financial institution and law enforcement efforts to combat elder financial exploitation on August 30, 2017. FinCEN and the CFPB will host a webinar on the Memorandum on Thursday, June 7, from 2:00 -3:30 p.m. EDT, to encourage coordination among financial institutions, law enforcement, and adult protective service agencies to protect older adults from elder financial exploitation (EFE). The webinar will focus on the importance of Suspicious Activity Reports (SARs) and the role that they may play in aiding law enforcement’s investigation of EFE cases. Registration is required.