The SEC charged a business development company (BDC) and three of its officers with overstating the fund's assets during the financial crisis. The fund's asset portfolio consisted primarily of corporate debt securities and investments in collateralized loan obligations (CLOs). According to the order, the BDC's valuation procedures should have been consistent with the requirements of FAS 157, which prioritizes market value over other measures of value. Instead, the fund had treated all of its securities as illiquid, notwithstanding that many of the securities did trade, and valued the

FINRA and the Japan Securities Dealers Association (JSDA) have entered into a Memorandum of Understanding (MOU) to support more robust cooperation between the two regulators. View Press Release in full here (links externally to FINRA website).

The Committee on Financial Services is holding a joint hearing on the impact of the proposed rules to implement Basel III Capital Standards on Thursday, November 29, 2012. Click here for further information (links externally to House Financial Services Committee website).

The CFTC has withdrawn parts of its "Frequently Asked Questions on Reporting of Cleared Swaps," which are now under consideration by the CFTC as part of its review of a request from the Chicago Mercantile Exchange for approval of CME Rule 1001 ("Regulatory Reporting of Swap Data"). Specifically, the staff withdrew the following questions, and their corresponding answers: "Which party has the authority to select the particular SDR for purposes of cleared swap reporting?" "May a DCM, SEF or DCO that is also registered as an SDR or legally affiliated with an SDR require counterparties to use

Federal Reserve Governor Daniel K. Tarullo gave a speech discussing what he termed a "practical and reasonable way forward" in the U.S. regulation of foreign banking organizations. In Governor Tarullo's speech, delivered at the Yale School of Management, he noted that the profile of foreign bank operations in the United States changed significantly in the run-up to the financial crisis (see also attached study), shifting from a "lending branch" model to a "funding branch" model, in which U.S. branches of foreign banks began borrowing large amounts of U.S. dollars "to upstream to their parents