• SEC Decision on IFRS Delayed.

On July 6th, the Wall Street Journal reported that SEC staff will issue a report on IFRS accounting standards within a few weeks. The report, however, will not recommend whether the SEC should adopt IFRS standards nor will it discuss how an adoption of international standards could be implemented. IFRS.

• Suitable Concern.

On July 5th, InvestmentNews discussed the new obligations associated with the Financial Industry Regulatory Authority's new suitability rule, FINRA Regulatory Notice 12-25, which is effective July 9, 2012. Suitable Concern.

• Mortgage Reform.

On July 5th, the New York Times profiled Consumer Financial Protection Bureau Director Richard Cordray and his efforts to reform the home mortgage industry. Mortgage Reform.

• The Volcker Rule and Commodity Forwards.

On July 3rd, Reuters discussed Federal regulators' proposed application of the Volcker Rule to commodity forwards. Commodity Forwards.

• California's Anti-Foreclosure Measures.

On July 2nd, the Los Angeles Times reported that California will be the first state to prohibit "dual tracking," the process in which lenders simultaneously foreclose on a delinquent home mortgage while negotiating a mortgage modification with the homeowner. The bill would also ban "robo-signing" and create a private right of action for violations of the law. California Law.

• Monster Error Avoided.

On July 2nd, Reuters reported that NYSE Euronext's use of real people averted what could have been a multi-million dollar headache when an NYSE designated market maker noticed a likely computer-generated erroneous trade for Monster Worldwide. Monstrous Error.

• Money Market Stress Test.

On June 29th, Reuters reported that the president of the Federal Reserve Bank of Boston, Eric Rosengren, has suggested that a stress test be developed for banks that sponsor money market funds. Money Market Stress Test. On July 3rd, Bloomberg noted that some contend that if money market funds pose risks to banks, those risks should be monitored by the banking regulators, not the SEC. Banking Risks.

• Congress Criticizes Fiduciary Duty Plan.

On June 27th, Reuters reported that 33 congressmen have written the Department of Labor to criticize its fiduciary duties proposal for pension plan investment advisers. Critical Letter.

• FDIC Makes Living Wills Available.

On July 3rd, the FDIC made available the public sections of the initial resolution plans submitted to the FDIC and Federal Reserve under the Dodd-Frank Act. The nine firms in this group include U.S. bank holding companies with $250 billion or more in total non-bank assets and foreign-based bank holding companies with $250 billion or more in total U.S. nonbank assets. The public summaries are available at: www.fdic.gov/regulations/reform/resplans/index.html. FDIC Press Release. On June 29th, the FDIC and the Federal Reserve Board announced the process for receiving and evaluating the initial resolution plans, also known as living wills, from the largest banking organizations operating in the United States. Joint Press Release.

• Host State Loan-to-Deposit Ratios Published.

On June 29th, the Federal Reserve Board, FDIC, and OCC issued the host state loan-to-deposit ratios that the banking agencies will use to determine compliance with section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. These ratios update data released on June 30, 2011. Joint Press Release.

• List of Distressed or Underserved Nonmetropolitan Middle-Income Geographies Released.

On June 29th, the federal bank and thrift regulatory agencies announced the availability of the 2012 list of distressed or underserved nonmetropolitan middle-income geographies where revitalization or stabilization activities will receive Community Reinvestment Act consideration as "community development." Joint Press Release.

• OCC Report Discusses Risks Facing Banks.

On July 5th, the OCC discussed the top risks facing national banks and federal savings associations in its Semiannual Risk Perspective for Spring 2012. Top risks facing national banks and federal savings associations include the lingering effects of a weak housing market, revenue challenges related to slow economic growth and market volatility, and the potential that banks may take excessive risks in an effort to improve profitability. OCC Press Release.

• OCC Issues Bulletin on Interim Lending Limits Rule.

On June 29th, the OCC issued a bulletin on its interim final rule that amends its lending limits rule, 12 CFR 32, to implement Section 610 of the Dodd-Frank Act. Section 610 revises the lending limits statute to include credit exposures arising from derivative transactions and repurchase agreements, reverse repurchase agreements, securities lending transactions, and securities borrowing transactions.

• National Bank Branches Affected by Colorado Wildfires May Close.

On June 29th, the OCC issued a proclamation allowing national bank offices affected by the Colorado wildfires to close at their discretion. OCC Press Release.

• OCC Survey Shows Unchanged Underwriting Practices.

On June 28th, the OCC published its 18th Annual Survey of Credit Underwriting Practices, which shows that underwriting standards remained largely unchanged from last year, although some easing was noted in select commercial and retail products. OCC Press Release.

• Mortgage Delinquencies Decline.

On June 27th, the OCC released its Mortgage Metrics Report for the First Quarter of 2012. The report finds that the percentage of first-lien mortgages that were current and performing at the end of the first quarter of 2012 increased to the highest levels in three years. Percentages of mortgages that were 30-to-59 and 60-to-89 days delinquent also decreased to their lowest levels since the OCC began publishing its report on mortgage performance in the first quarter of 2008. OCC Press Release.

• OCC Issues Bulletin on Alternatives to External Credit Ratings.

On June 26th, the OCC published a bulletin on its new final rules that remove references to credit ratings from its regulations pertaining to investment securities, securities offerings, and foreign bank capital equivalency deposits. The new rules also revise OCC regulations pertaining to financial subsidiaries of national banks to better reflect the language of the underlying statute, as amended by Section 939(d) of the Dodd-Frank Act. The bulletin also discusses related guidance on determining whether particular securities are "investment grade" when assessing credit risk for portfolio investments.

• OCC Publishes Community Developments Insights.

On June 22nd, the OCC published a Community Developments Insights report that looks at bank participation in the USDA Business & Industry Guaranteed Loan Program. The report highlights how banks can make loans through this program to support businesses, expand employment, further economic development in rural areas, and help meet Community Reinvestment Act goals. OCC Press Release.

• CFPB Adjudication Rules.

On June 29th, the Consumer Financial Protection Bureau published procedures for the conduct of adjudication proceedings. 77 FR 39058.

• CFPB Adopts Rule to Protect Privileged Information.

On June 28th, the Consumer Financial Protection Bureau adopted a rule codifying protections for privileged information submitted to the Bureau by the financial institutions it oversees. The rule is effective August 6, 2012. CFPB Press Release.

• CFPB Issues Report on Reverse Mortgages; Requests Public Input.

On June 28th, the Consumer Financial Protection Bureau released a report, required by the Dodd-Frank Act, concerning reverse mortgages. The report finds that many consumers are confused by reverse mortgages and that some may be receiving misleading or deceptive materials. The Bureau has also published a Request for Information to gather additional public input on reverse mortgages. Comments should be submitted on or before August 31, 2012. CFPB Press Release.

• Top Mortgage Fraud Locations Identified.

On June 26th, the Financial Crimes Enforcement Network released its First Quarter 2012 Update of mortgage loan fraud suspicious activity reports ("MLF SARs") that shows California, Nevada, and Florida leading the nation in the number of MLF SAR subjects per capita. Of the 50 most populous Metropolitan Statistical Areas ("MSAs") ranked by the number of MLF SAR subjects reported, the top nine are MSAs located in California, Nevada, and Florida, with the Los Angeles-Long Beach-Santa Ana area ranked first in the nation. FinCEN Press Release.

• Bill Paying Service is a Money Transmitter.

On June 25th, the Financial Crimes Enforcement Network released an administrative ruling on the application of the money services business rules to daily money management services. It concludes that a bill paying services company is a money transmitter for Bank Secrecy Act purposes. FIN-2012-R004.

• Designations.

On June 27th, the Treasury Department designated four individuals and three entities involved in laundering the proceeds of narcotics trafficking for drug kingpin Ayman Joumaa. Treasury also designated a Colombia-based individual under its terrorism authority, Executive Order 13224, for directing Hezbollah's fundraising activities in the Americas. This individual was previously designated under the Foreign Narcotics Kingpin Designation Act for his role in narcotics-related money laundering. The designations further expose Ayman Joumaa's network as a major narcotics and money laundering enterprise that has reach throughout the Americas and the Middle East with links to Hezbollah. Treasury Department June 27 Press Release. On June 29th, the Treasury Department designated two exchange houses, the Haji Khairullah Haji Sattar Money Exchange ("HKHS") and the Roshan Money Exchange, which principally operate in Afghanistan and Pakistan, pursuant to the U.S. government's terrorism sanctions authority, Executive Order 13224, for storing or moving money for the Taliban. The Treasury Department also designated the co-owners of HKHS, Haji Abdul Sattar Barakzai and Haji Khairullah Barakzai, for donating money and providing financial services to the Taliban. Treasury Department June 29 Press Release. On July 5th, the Treasury Department designated six individuals pursuant to Executive Order 3536, "Blocking Property of Certain Persons Contributing to the Conflict in Somalia." The individuals targeted include Col. Tewolde Negash and Col. Taeme Goitom, two Eritrean government officials; Suhayl Salim Muhammad Abd-el-Rahman, a Sudanese al-Shabaab foreign fighter facilitator; and Abubaker Shariff Ahmed, Omar Awadh Omar and Aboud Rogo Mohammed, who are three Kenyan al-Shabaab supporters. Treasury Department July 5 Press Release. As a result of these actions, all property in the United States or in the possession or control of U.S. persons in which the designees have an interest is blocked, and U.S. persons are prohibited from engaging in transactions with them.

• Order Amending the Effective Date for Swap Regulation.

On July 3rd, the CFTC issued an exemptive order extending to December 31, 2012, the latest date by which certain Dodd-Frank Act implementing rules will become effective. The July 3rd exemptive order also allows agricultural swaps cleared through a derivatives clearing organization or traded on a designated contract market to be transacted and cleared as any other swap. The exemptive order permits unregistered trading facilities that offer swaps for trading, additional time to register as swap execution facilities or designated contract markets. Finally, the exemptive order provides guidance regarding enforcement of rules that require that certain off-exchange swap transactions only be entered into by eligible contract participants ("ECP"). The guidance provides that if a person takes reasonable steps to verify that its counterparty is an ECP, but the counterparty turns out not to be an ECP based on subsequent Commission guidance, absent other material factors, the CFTC will not bring an enforcement action against the person. CFTC Press Release.

• Phased Compliance Proposed for Swaps Compliance.

On June 29th, the CFTC published for comment a proposed phased-in swaps compliance program for non-U.S. swap dealers, non-U.S. major swap participants, U.S. swap dealers, U.S. major swap participants, and foreign branches of U.S. swap dealers and U.S. major swap participants. The phased approach applies to certain entity-level requirements and transaction-level requirements and would become effective on the compliance date for registration of swap dealers and major swap participants and expire: (1) for non-U.S. swap dealers, non-U.S. major swap participants, foreign branches of U.S. swap dealers, and foreign branches of U.S. major swap participants, 12 months following the publication of the proposal; and (2) for U.S. swap dealers and U.S. major swap participants, January 1, 2013. Comments should be submitted within 30 days after publication in the Federal Register, which is expected during the week of July 9. CFTC Press Release.

• Proposed Interpretive Guidance on the Cross-Border Application of Swaps Rules.

On June 29th, the CFTC published for comment proposed interpretive guidance regarding the cross-border application of the swaps provisions of Title VII of the Dodd-Frank Act and the CFTC's regulations. The proposed guidance interprets Section 2(i) of the Commodity Exchange Act, which states that the swaps provisions of the CEA shall not apply to activities outside the United States unless those activities have a direct and significant connection with activities in, or effect on, commerce of the United States. Comments should be submitted within 45 days after publication in the Federal Register, which is expected during the week of July 9. CFTC Press Release.

• Account Ownership and Control Report.

On June 28th, the CFTC published for comment proposed rules and related forms that would enhance its identification of participants in futures and swaps markets. The proposed rules would require the electronic submission of expanded trader identification and market participant data. In addition, the proposed rules would strengthen the Commission's existing trade practice and market surveillance programs for futures and options on futures, and facilitate surveillance programs for swaps. The CFTC is also withdrawing its previous proposal to collect an ownership and control report for trading accounts active on designated contract markets or swap execution facilities. Comments should be submitted within 60 days after publication in the Federal Register. CFTC Press Release.

• CFTC Re-Publishes Proposed Prohibition against the Aggregation of Orders to Satisfy Block Size Requirements.

On June 25th, the CFTC re-published for comment amendments adding certain provisions to Part 43 of the CFTC's regulations pertaining to block trades in swap contracts. The proposed amendments would prohibit the aggregation of orders for different trading accounts in order to satisfy the minimum block size or cap size requirements, except for orders aggregated by certain commodity trading advisors, investment advisers and foreign persons, if such qualifying persons have more than $25,000,000 in total assets under management; provide that parties to a block trade must individually qualify as eligible contract participants, except where a designated contract market allows certain commodity trading advisors, investment advisers and foreign persons to transact block trades for customers who are not eligible contract participants, if such qualifying commodity trading advisor, investment adviser or foreign person has more than $25,000,000 in total assets under management; and require that persons transacting block trades on behalf of customers must receive prior written instructions or consent from the customer. Comments should be submitted on or before July 27, 2012. CFTC Press Release.

• Open Meeting.

The CFTC will hold an open meeting on July 10, 2012, to consider whether to adopt definitions for swap, security-based swap, and security-based swap agreement; mixed swaps; security-based swap agreement recordkeeping; whether to adopt a final rule related to the end-user exception to the clearing requirement for swaps; and whether to propose for comment a rule related to clearing exemption for certain swaps entered into by cooperatives. CFTC Press Release.

• First Swap Data Repository is Provisionally Registered.

On June 28th, the CFTC approved the application of ICE Trade Vault, LLC for provisional registration as a swap data repository for the interest rate, credit, foreign exchange, and other commodity asset classes. CFTC Press Release.

• Process for SEC Review of Clearing Agency Decision to Clear Swaps.

On June 27th, the SEC published the adopting release and text of new final rules specifying the process by which a registered clearing agency will submit for SEC review its decision to accept a security-based swap for clearing. The Commission also adopted a rule to specify that when a security-based swap is required to be cleared, the submission of the security-based swap for clearing must be for central clearing to a clearing agency that functions as a central counterparty. In addition, the Commission defined and described when notices of proposed changes to rules, procedures or operations are required to be filed by designated financial market utilities. SEC Press Release.

• Open Meeting.

The SEC will hold an open meeting on August 22, 2012 to consider whether to adopt disclosure and reporting obligations regarding the use of conflict minerals; whether to adopt disclosure and reporting rules regarding payments to governments made by resource extraction issuers; and whether to propose for public comment rules that would eliminate the prohibition against general solicitation and general advertising in securities offerings conducted pursuant to Rule 506 of Regulation D and Rule 144A. SEC Meeting Notice.

• Incremental Change.

On July 6th, Reuters discussed the pros and cons of larger trading increments for smaller companies. Incremental Change.

• AML Compilation for Mutual Funds.

On July 2nd, the Office of Compliance Inspections and Examinations posted a compilation of key anti-money laundering laws, rules, and guidance applicable to mutual funds. AML Compilation.

• Commissioner Aguilar Supports Shareholder Vote on Auditors.

On June 29th, Reuters reported that SEC Commissioner Luis A. Aguilar supports allowing shareholders to submit proxy proposals on auditor independence. Independence Vote.

• Corporation Finance Provides Status Update on the Submission of JOBS Act Registration Statements.

On June 28th, the Division of Corporation Finance announced that some of the revisions to EDGAR that will allow Emerging Growth Companies to submit draft registration statements for confidential, non-public review, in accordance with Section 106 of the JOBS Act, have been made. Full implementation of the system, however, remains incomplete. Filers should therefore continue to use the secure email system until further notice. Corporation Finance Statement.

• State Securities Regulators Issue Crowdfunding Advisory.

On June 27th, the North American Securities Administrators Association issued an advisory reminding small businesses that the JOBS Act's crowdfunding provisions cannot be used until the SEC adopts implementing regulations. Until that time, federal and state securities laws prohibiting publicly accessible Internet securities offerings remain in effect. NASAA Press Release.

• Investment Management Associate Director Discusses Variable Annuities.

On June 26th, Susan Nash, SEC Associate Director, Division of Investment Management, discussed variable annuities. Issuers are urged to review offering materials to ensure the clear disclosure of the costs and limitations associated with living benefits. The interests of existing contract holders should also be considered when limiting or discontinuing investment options. Nash warned that suitability should be considered when exchanging an investor's existing contract for another. Nash Remarks.

• Commissioners Reviewing Money Market Fund Proposal.

On June 26th, Reuters summarized draft money market fund proposals being reviewed by SEC Commissioners. The draft contains a floating net asset value and a capital requirement/redemption holdback alternative. Money Fund Proposal. Steven M. Davidoff, writing for the New York Times' DealBook, discussed other possible reforms for money market funds and whether industry resistance to reforms is well-founded. Alternative Thinking. On June 28th, Reuters reported SEC Chairman Mary L. Schapiro is optimistic that the Commission will adopt a reform proposal. Optimism.

• Revised Mini-Option Contract Proposals Are Filed.

On June 21st, the SEC provided notice of NYSE Arca's and the International Securities Exchange's withdrawal of their respective proposals to list mini-option contracts, option contracts overlying 10 shares of a security. Both exchanges filed revised proposals on June 27th. In the revised filings the exchanges propose to initially list and trade mini-options contracts overlying 5 high priced securities for which the standard contract overlying the same security exhibits significant liquidity. The exchanges believe that investors would benefit from the availability of mini-options contracts by making options overlying high priced securities more readily available as an investing tool and at more affordable and realistic prices, most notably for the average retail investor. Comments should be submitted on or before July 24, 2012. SEC Release No. 34-67283 (NYSE Arca); SEC Release No. 34-67284 (ISE).

• Route Peg Order Proposed.

On June 28th, the SEC provided notice of EDGX Exchange's and EDGA Exchange's separately filed proposals to amend their respective Rule 11.5(c) to add a new subparagraph that describes a Route Peg Order. A Route Peg Order would be a non-displayed limit order eligible for execution at the national best bid for Route Peg Orders to buy, and at the national best offer for Route Peg Orders to sell, against routable orders that are equal to or less than the size of the Route Peg Order. Thus, the Route Peg Order would only be eligible for execution at a price that matches the NBB for buy orders, and the NBO for sell orders. The Route Peg Order would be a passive, resting order designed exclusively to provide liquidity; therefore, it would not be permitted to take liquidity. Comments should be submitted on or before July 26, 2012.

• SEC Approves Amendments to FINRA Mediation Code.

On July 6th, the Financial Industry Regulatory Authority ("FINRA") advised that the SEC has approved amendments to the FINRA Mediation Code granting the Mediation Director discretion to determine whether parties may select a mediator who is not on FINRA's mediator roster. The amendments are effective August 6, 2012 for all mediation cases filed on or after that date. FINRA Regulatory Notice 12-35.

• FINRA Requests Comment on the Applicability of its Rules to Crowdfunding.

On July 5th, FINRA requested comment on the application of FINRA rules to firms engaging in crowdfunding activities. Comments should be submitted on or before August 31, 2012. FINRA Regulatory Notice 12-34.

• FINRA's New Member Form Amended and New Form for Continuing Membership Adopted.

On July 5th, FINRA advised that it has amended Form NMA and adopted new electronic form CMA. Beginning July 23, 2012, all prospective applicants for FINRA membership (new member applicants or NMA applicants) pursuant to NASD Rules 1012 (General Provisions) and 1013 (New Member Application and Interview) must submit the revised Form NMA as part of their new member applications; and all prospective applicants for approval of a change in ownership, control, or business operations (continuing membership applicants or CMA applicants) pursuant to NASD Rules 1012 and 1017 (Application for Approval of Change in Ownership, Control, or Business Operations) must submit the new electronic Form CMA as part of their continuing membership applications. FINRA Regulatory Notice 12-33.

• FINRA Launches Pilot Program for Large Arbitrations.

On July 2nd, FINRA launched a pilot program specifically designed for arbitration cases involving claims of $10 million or more. The program enables parties to customize the administrative process to better suit special needs of a larger case and allows them to bypass certain FINRA arbitration rules. FINRA Press Release.

• FINRA Announces New Fees.

On June 27th, FINRA announced new fees. Effective July 2, 2012, FINRA is increasing fees for (1) reviewing advertising material filed with FINRA and (2) filing offering documents pursuant to FINRA Rule 5110. Effective July 23, 2012, FINRA is increasing its new member application filing fee and imposing a new continuing membership application filing fee. Effective January 2, 2013, FINRA is changing fees relating to (1) the Central Registration Depository, including fees for initial/transfer registration, disclosure filing, system processing, fingerprint processing, mass transfer registration and late disclosure; and (2) branch office annual registration and related waiver process. FINRA Regulatory Notice 12-32.

• Trading Activity Fee Increase.

On June 25th, FINRA advised that, effective July 1, 2012, the Trading Activity Fee rate for sales of covered equity securities will increase from $0.000095 per share for each sale of a covered equity security to $0.000119 per share, with a corresponding increase to the per-transaction cap for covered equity securities from $4.75 to $5.95. The new rate applies to any sale of a covered equity security subject to the TAF occurring on or after July 1, 2012. FINRA Regulatory Notice 12-31.

• Changes to Volatility Model Are Approved.

On July 2nd, the SEC approved the Fixed Income Clearing Corporation's proposed clarification of the ability of FICC's Government Securities Division to use implied volatility indicators as part of the volatility model in its clearing fund formula. SEC Release No. 34-67336.

• Proposal to Clear Emerging Market Sovereign CDS Is Approved.

On June 28th, the SEC approved ICE Clear Credit's proposed rule change adding rules related to the clearing of emerging markets sovereign index credit default swaps. SEC Release No. 34-67289.

• Amendment to Rule G-34, on CUSIP Numbers, New Issue, and Market Information Requirements, Is Proposed.

On July 3rd, the SEC provided notice of the Municipal Securities Rulemaking Board's filing of a proposal amending MSRB Rule G-34 to prohibit any broker, dealer, or municipal securities dealer from using the term "not reoffered" or other comparable term or designation, such as the commonly used designation of "NRO," without also including the applicable price or yield information about the securities in any of its written communications, electronic or otherwise, sent by or on behalf of the dealer. Such prohibition would apply to any such communication occurring from and after the time of initial award of a new issue of municipal securities. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of July 9. SEC Release No. 34-67344.

• Longer Period Designated to Consider Proposed Benchmark Orders.

On June 26th, the SEC designated August 15, 2012 as the date by which it will either approve, disapprove, or institute disapproval proceedings regarding the NASDAQ Stock Market's proposed rule change establishing "Benchmark Orders" under NASDAQ Rule 4751(f). SEC Release No. 34-67258.

• Guidance to Persons Operating or Advising Funds Pursuant to an Exemption under CFTC Regulation 4.13(a)(4).

On June 27th, the National Futures Association advised members concerning the CFTC's new final rules amending CFTC Part 4 Regulations, which rescind an exemption from CPO registration for certain qualifying pools under CFTC Regulation 4.13(a)(4) (this rescission applies to CPOs with a 4.13 No Action letter exempting the CPO from registration based upon qualifying under the terms of 4.13(a)(4)). NFA Notice I-12-12.

• FCMs Required to File Segregated Investment Detail Reports.

On June 27th, the National Futures Association advised that effective July 2, 2012, all NFA Member FCMs that hold customer futures and option segregated funds and/or foreign futures and foreign options secured amount funds will be required to file the Segregated Investment Detail Report ("SIDR") as of the 15th and the last business day of each month. The report is due by 11:59 P.M. Eastern time on the business day following the 15th and last business day of each month. The first SIDR under this requirement will report the information as of close of business on July 16, 2012 and must be filed by 11:59 P.M. Eastern time on July 17, 2012. NFA Notice I-12-11.

• Guidance on Carrying Accounts for, or Transacting Business with, Persons Exempt from Registration.

On June 25th, the National Futures Association advised members that on February 24, 2012, the CFTC issued final rules amending a number of CFTC Regulations related to exemptions from CPO/CTA registration. Members that currently carry accounts for or transact business with any person who is exempt from CPO or CTA registration based on these exemptions should carefully review this guidance because the amendments may affect their ability to do business with these persons in the future. NFA Notice to Members I-12-10.

• Retail Liquidity Pilot Program Approved.

On July 3rd, the SEC approved the New York Stock Exchange's and NYSE Amex's individually proposed new NYSE Rule 107C establishing a Retail Liquidity Program on a pilot basis to attract additional retail order flow to each exchange. SEC Release No. 34-67347. See also NYSE Press Release.

• NYSE Euronext Announces Third Quarter Circuit Breakers.

On June 29th, NYSE Euronext announced the Rule 80B circuit breaker levels for the third quarter of 2012. NYSE Euronext Information Memo 12-18.

• New Products Proposed.

On June 29th, the SEC provided notice of NYSE MKT's filing of proposed new rules that would govern the listing and trading of new products known as DORS, which are comprised of DIVS, OWLS, and RISKS. The Exchange believes that the product will give investors additional opportunities to manage risk by offering the ability to invest discretely in three instruments that, when taken together, represent the total return of a security over a certain period of time. Comments should be submitted on or before July 27, 2012. SEC Release No. 34-67315.

• New Order Types Proposed.

On June 29th, the SEC provided notice of the New York Stock Exchange's and NYSE MKT's filing of proposed rule changes to establish new order types, to delete obsolete text, and to clarify and update the description of the allocation of market and limit interest in opening and reopening transactions, to include better-priced G orders in the allocation of orders in closing transactions, and to make other technical and conforming changes. Comments should be submitted on or before July 27, 2012.

• SEC Approves Rules Creating Supplemental Liquidity Providers at NYSE Euronext Exchanges.

On June 28th, NYSE Euronext advised members of the New York Stock Exchange and NYSE MKT of recent amendments to NYSE and NYSE MKT Equities Rule 107B relating to Supplemental Liquidity Providers ("SLP"). The amendments add a class of SLPs that are registered as market makers at each Exchange. The amendments to both versions of Rule 107B are effective July 2, 2012. NYSE Euronext Information Memo 12-17.

• After Severing Unconscionable Provision, Court Orders Arbitration.

On July 6th, the Eleventh Circuit ordered arbitration in a putative class action complaint alleging that a bank charges its retail customers overdraft fees even if an account contains sufficient funds. After determining that the instant state's unconscionability doctrine does not interfere with fundamental attributes of arbitration, and is therefore not preempted by the Federal Arbitration Act, the Court found that the parties' arbitration agreement contains an unconscionable fee-shifting provision. However, because that provision is severable from the arbitration agreement, arbitration can still be compelled. In re: Checking Account Overdraft Litigation.

• Bank Liability for Account Intrusion Schemes.

On July 3rd, the First Circuit addressed bank liability when a commercial customer's account is compromised. The customer claimed the bank should bear the losses associated with an account intrusion scheme because the bank's security system was not commercially reasonable under the Uniform Commercial Code. The First Circuit held that when taken as a whole, the bank's security measures were not commercially reasonable. It therefore reinstated the customer's claims and remanded for a determination of whether the customer bears any responsibilities under the UCC and what the customer's damages were. Patco Construction Co., Inc. v. People's United Bank.

• Stanford Claims Aren't Covered by the SIPC.

On July 3rd, the federal District Court for the District of Columbia denied the SEC's application to compel the Securities Investor Protection Corporation to exercise its statutory authority for the benefit of those who purchased certificates of deposits sold by Stanford International Bank. In doing so, the Court holds that the SEC must establish by a preponderance of the evidence that the purchasers were customers within the meaning of the Securities Investor Protection Act, a burden which the SEC has failed to meet. SEC v. SIPC.

• AIG Backdoor Bailout Case Proceeds.

On July 2nd, the Court of Federal Claims issued an opinion allowing much of a lawsuit challenging the federal government's bailout of AIG during the financial crisis to proceed. Starr International, once one of the largest shareholders of AIG, claims the government exploited AIG's vulnerable financial position by becoming a controlling lender and controlling shareholder of AIG, using AIG and its assets to provide a "backdoor bailout" to other financial institutions. In so doing, Starr alleges the government took AIG's property without due process or just compensation. Starr International Co., Inc. v. U.S.

• Supreme Court Will Not Review RESPA Standing Decision.

On June 28th, the Supreme Court dismissed a petition for certiorari as improvidently granted. Supreme Court Order. Petitioner sought review of a Ninth Circuit opinion which held that plaintiff had standing to bring claims alleging violations of the Real Estate Settlement Procedures Act prohibition against the payment of kickbacks even though plaintiff did not allege an overcharge. See Edwards v. The First American Corp. In a related summary order, the Ninth Circuit also held that plaintiff was entitled to limited discovery for class certification purposes and that a sub-class of plaintiffs should be certified.

• Investors Cannot Sue Issuers' Lawyer.

On June 28th, the Sixth Circuit held that an attorney who provides traditional legal services, and nothing more, cannot be liable to disappointed investors alleging violations of state securities laws. Investors in oil and gas exploration companies alleged that the offering documents contained misrepresentations amounting to securities fraud and sought to hold the lawyer who drafted the documents liable as an agent of the issuer. The Sixth Circuit holds that the state statute, which is based on the Uniform Securities Act, does not impose liability on an attorney who performs traditional legal services for a company offering its securities for sale to the public. Bennett v. Durham.

• Supreme Court Won't Hear Madoff Investors' Appeal Seeking Lost Profits.

On June 25th, the Supreme Court denied the petition for certiorari filed by victims of Bernard Madoff's Ponzi scheme. The Supreme Court's decision lets stand the Second Circuit's opinion affirming the method by which the Securities Investors Protection Act ("SIPA") trustee overseeing the liquidation of Madoff's broker-dealer calculated investors' net equity. The Second Circuit found that the trustee properly used the "net investment method," which credited the amount of cash deposited by the investor less any amounts withdrawn. The trustee's method did not credit investors for the paper profits appearing on the fictitious account statements Madoff sent to them. See Picard Statement.

• Listing Standards for Compensation Committees - Effective July 27, 2012.

The SEC is adopting a new rule and amendments to the proxy disclosure rules to implement Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which added Section 10C to the Securities Exchange Act of 1934. Section 10C requires the SEC to adopt rules directing the national securities exchanges and national securities associations to prohibit the listing of any equity security of an issuer that is not in compliance with Section 10C's compensation committee and compensation adviser requirements. In accordance with the statute, new Rule 10C-1 directs the national securities exchanges to establish listing standards that, among other things, require each member of a listed issuer's compensation committee to be a member of the board of directors and to be "independent," as defined in the listing standards of the national securities exchanges adopted in accordance with the final rule. In addition, pursuant to Section 10C(c)(2), the SEC is adopting amendments to proxy disclosure rules concerning issuers' use of compensation consultants and related conflicts of interest. 77 FR 38422.

• Delaware Quarterly Newsletter.

Recent Developments in Delaware Business and Securities Law. Delaware Quarterly.

• Record Sentence Handed Down in Sanders Insider Dealing Case.

On 19 June 2012 Mr. Justice Simon at Southwark Crown Court sentenced James Sanders, a director of the former UK brokerage firm Blue Index, to four years' imprisonment after pleading guilty to 10 counts of insider dealing. Briefing.

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