Financial Services Authority July 25, 2011 In response to the introduction of the Commission Auction Regulation, the EU's new carbon emission allowance auctioning regime, the FSA has issued a consultation paper to propose changes to the Recognised Investment Changes and Recognised Clearing House sourcebook and Fees. The key change suggested is the introduction of the Recognised Auction Platform regime, which will form the framework for the authorisation and supervision of auction platforms auctioning emission allowances. Any comments on the proposals should be sent to the FSA no later than 18

The FSA has opened a guidance consultation on liquidity swaps. The consultation arose in response to the increasing trend of banks seeking to access liquidity embedded within asset portfolios held by insurers by entering into various transactions which the FSA collectively refers to as "liquidity swaps". The proposed guidance addresses the following key issues: (i) Wrong-way risk: use of own-issued or own-originated securities as collateral; (ii) Limit structures: interdependencies between micro-prudential and macro-prudential risks; (iii) Intra-group transactions: conflicts of interest; and

SEC Release No. 33-9245 / 34-64975 July 26, 2011 The SEC adopted new rules, as required by the Dodd-Frank Act, to remove credit ratings as eligibility criteria for issuers seeking to use “short forM” registration for their securities.In lieu of credit ratings, the new rules replace it with four tests that look at, among other things, the company’s amount of securities issuances and company’s regulatory filing history. Cross References SEC Press Release No. 2011-155 Securities Act Forms S-4 and F-4 Securities Act Rules 134, 138, 139,168 Dodd-Frank § 939A

July 22, 2011 ESMA has published a discussion paper setting out policy orientations on guidelines for UCITS Exchange-Traded Funds and structured UCITS. ESMA has reviewed the current regulatory regime applicable to such funds and considers that the existing requirements are not sufficient to take account of the specific features and risks associated with these types of fund. In the discussion paper, ESMA examines the possible measures that could be introduced to mitigate the risk that particularly complex products, which may be difficult to understand and evaluate, are made available to retail

FINRA RN 11-31 July 15, 2011 FINRA published a regulatory notice to inform firms of its recently established pilot program on margin requirements for credit default swap transactions and to address the approval of margin methodologies used by clearing agencies or derivative clearing organizations (DCOs) for the purpose of the rule, FINRA Rule 4240. Currently, FINRA has approved the use of the margin methodology of the central counterparty clearing facilities at the CME; the notice states that FINRA will consider the use of other counterparty clearing services and will announce the approval of