Essentials of the Dodd-Frank Act E-Book

Sanjay Anand

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Essentials Series
• Sprache: Englisch

Seitenzahl: 222

Veröffentlichungsjahr: 2011

Beschreibung

An executive overview of the new Financial Regulations Act This book provides an executive summary of the newly passed Financial Regulations Act. It examines the most important sections of the Act, how it impacts the financial industry, as well as what executives must know and do in order to comply with the Act. * One of the first books to provide an executive summary from a compliance perspective * Presents responsibilities of senior level executives regarding this new Act * Reveals what has changed within the regulatory environment * Provides tips and techniques throughout Describing the government regulation of securities, securities markets, and securities transactions in the United States, this timely book succinctly defines, describes, and explains domestic securities regulation for compliance officers, accountants, and broker-dealers.

Leseprobe

Contents

Cover

Essentials Series

Title Page

Copyright

Dedication

Foreword

Preface

Acknowledgments

Chapter 1: Introduction to the Dodd-Frank Act

Chapter 2: History and Background

Financial Instability

Scope

Architects of the Dodd-Frank Act

The Plan and Proposal

Timeline

Key Goals of the Act

Summary

Chapter 3: Key Titles and Sections

Title I: Financial Stability

Title II: Orderly Liquidation Authority

Title III: Transfer of Powers to the Office of Comptroller of the Currency, Corporation, and Board of Governors

Title IV: Regulation of Advisers to Hedge Fund and Others

Title V: Insurance

Title VI: Improvements to the Regulation of Bank and Savings Association Holding Companies and Depository Institutions

Title VII: Wall Street Transparency and Accountability

Title VIII: Payment, Clearing, and Settlement Supervision

Title IX: Investor Protections and Improvements to the Regulation of Securities

Title X: Bureau of Consumer Financial Protection

Title XI: Federal Reserve System Provisions

Title XII: Improving Access to Mainstream Financial Institutions

Title XIII: Pay It Back Act

Title XIV: Mortgage Reform and Anti-Predatory Lending Act

Title XV: Miscellaneous Provisions

Title XVI: Section 1256 Contracts

Summary

Chapter 4: Institutions Impacted

Foreign Banking Organizations

Derivatives

Insurance Companies

Consumers and Mortgage Banking

Broker-Dealers

Banks, Thrifts, and Bank Holding Companies

Summary

Chapter 5: Dodd-Frank Act Rulemaking

SEC and Rulemaking

Corporate Governance

Investment Advisers

Securities Lending

Arbitration

Swaps

Credit Rating Agencies

Securitization

Other Legislation

Summary

Chapter 6: Role of New and Existing Agencies

Financial Stability Oversight Council

Office of Financial Research

Bureau of Consumer Financial Protection

Bank Holding Companies

Nonbank Financial Companies

Depository Institutions

Office of Thrift Supervision

Federal Deposit Insurance Corporation

Office of Comptroller of the Currency

Orderly Liquidation Authority

Securities Investor Protection Corporation

Securities and Exchange Commission

Federal Reserve Board

Commodity Futures Trading Commission

Government Accountability Office

Summary

Chapter 7: Global Impact and Implications

Banking Industry

Investment Industry

Summary

Chapter 8: Advice for Specific Professions

Executive Management

Municipal Securities Markets

Broker-Dealers

Investment Advisers

Insurers

Summary

Chapter 9: Relationship with SOX and the Basel Accords

The Dodd-Frank Act and SOX

The Dodd-Frank Act and the Basel Accords

Summary

Appendix A: Contents of the Dodd-Frank Act

Appendix B: Effective Dates and Deadlines

Dodd-Frank Effective Dates/Rules Promulgation Deadlines

Glossary of Key Acronyms

About SOX Institute and the GRC Group

Training Programs and Professional Certifications

Index

Essentials Series

The Essentials Series was created for busy business advisory and corporate professionals. The books in this series were designed so that these busy professionals can quickly acquire knowledge and skills in core business areas.

Each book provides need-to-have fundamentals for those professionals who must:

Get up to speed quickly, because they have been promoted to a new position or have broadened their responsibility scopeManage a new functional areaBrush up on new developments in their area of responsibilityAdd more value to their company or clients

Other books in this series include:

Essentials of Accounts Payable, Mary S. Schaeffer

Essentials of Balanced Scorecard, Mohan Nair

Essentials of Business Ethics, Denis Collins

Essentials of Business Process Outsourcing, Thomas N. Duening and Rick L. Click

Essentials of Capacity Management, Reginald Tomas Yu-Lee

Essentials of Cash Flow, H.A. Schaeffer, Jr.

Essentials of Corporate Fraud, Tracy L. Coenen

Essentials of Corporate Governance, Sanjay Anand

Essentials of Corporate Performance Measurement, George T. Friedlob, Lydia L.F. Schleifer, and Franklin J. Plewa, Jr.

Essentials of Cost Management, Joe and Catherine Stenzel

Essentials of Credit, Collections, and Accounts Receivable, Mary S. Schaeffer

Essentials of CRM: A Guide to Customer Relationship Management, Bryan Bergeron

Essentials of Enterprise Compliance, Susan D. Conway and Mara E. Conway

Essentials of Financial Analysis, George T. Friedlob and Lydia L. F. Schleifer

Essentials of Financial Risk Management, Karen A. Horcher

Essentials of Foreign Exchange Trading, James Chen

Essentials of Licensing Intellectual Property, Paul J. Lerner and Alexander I. Poltorak

Essentials of Knowledge Management, Bryan Bergeron

Essentials of Managing Corporate Cash, Michele Allman-Ward and James Sagner

Essentials of Managing Treasury, Karen A. Horcher

Essentials of Patents, Andy Gibbs and Bob DeMatteis

Essentials of Payroll Management and Accounting, Steven M. Bragg

Essentials of Sarbanes-Oxley, Sanjay Anand

Essentials of Shared Services, Bryan Bergeron

Essentials of Supply Chain Management, Michael Hugos

Essentials of Trademarks and Unfair Competition, Dana Shilling

Essentials of XBRL, Bryan Bergeron

For more information on any of the above titles, please visit www.wiley.com.

Copyright © 2011 by Sarbanes-Oxley Group. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Anand, Sanjay, 1969- author.

Essentials of the Dodd-Frank Act/Sanjay Anand.

p. cm. —(Essentials Series)

Includes index.

ISBN 978-0-470-95233-7 (pbk.): ISBN 978-1-118-02831-5 (ebk); ISBN 978-1-118-02832-2 (ebk); ISBN 978-1-118-02833-9 (ebk)

1. United States. Dodd-FrankWall Street Reform and Consumer Protection

Act. 2. Financial services industry—Law and legislation—United States. 3. Financial institutions—Law and legislation—United States. I. Title.

KF969.58201A2 2011

346.73'082—dc22

2010047242

To my son

Foreword

Great business leaders share many common positive attributes, such as intellectual curiosity and a propensity to act. In periods of significant business transformation, consummate business leaders step out even further to train and explain new business and regulatory developments to the masses.

I met Sanjay Anand at the beginning of last decade's massive regulatory overhaul, triggered by the passage of the Sarbanes-Oxley Act of 2002 (SOX). This swift legislative reaction to major corporate and accounting scandals, at Enron and other companies, caused those at publicly held companies to scramble in an attempt to grasp the compliance requirements for their organizations. Sanjay stepped up with his book, Essentials of Sarbanes-Oxley (John Wiley & Sons, 2007), which provided actionable information for those responsible for implementing SOX. I reviewed and commented on his book, and witnessed his commitment to professional development with his subsequent books and the many courses sponsored by his SOX Institute.

In the aftermath of the 2008 credit crisis and related economic downturn, once again Sanjay Anand has stepped forward to lead and explain the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) in this book.

It is crucial that everyone in business and proportionally every “consumer” understand this new and far-reaching law of the land. The Act is extensive, but even more significant are the expected regulations that will follow. Unlike earthquakes, where aftershocks diminish as time passes, the flow of regulations from the Dodd-Frank Act is anticipated to be considerable and ever expanding.

Dodd-Frank addresses too-big-to-fail bailouts and includes recommendations for risk committees at certain financial institutions. It gives the Federal Deposit Insurance Corporation (FDIC) powers to “disaffirm or repudiate any contract or lease to which the covered financial institution is a party” and recover or clawback compensation in certain circumstances. The Act expands bounties for whistleblowers and gives shareholders some “say on pay.” These are revolutionary changes of epic proportions!

For the consumer, the Dodd-Frank Act establishes a new independent watchdog agency within the Federal Reserve to make sure consumers receive clear and accurate information regarding financial products' terms and costs. It creates a consumer hotline, a new office of financial literacy, and generally expands accountability for consumer protection.

As a business executive and board member whose business foundation is as a CPA, I clearly see how important it is to update laws in order to meet modern-day business conditions and velocities. It is incumbent on all business owners and managers, and indeed all consumers, to understand the Dodd-Frank Act. More important, as a business manager and director, I call on readers to get involved in helping to shape the regulations that are certain to follow from this new law. Too much regulation—or the wrong kind of regulation—can be a drag on businesses and the economy.

Dodd-Frank is also significant in that it implements the first amendments to SOX. Who better to provide insights on Dodd-Frank than Sanjay Anand, who was among the first responders of consummate business leaders to explain SOX? You have chosen wisely, and I know you will greatly benefit from reading this book.

Michael P. Cangemi, CPA

Michael P. Cangemi, CPA, an author and business advisor, is the former president, chief executive officer, and director of Etienne Aigner Group, Inc., a leading designer of women's accessories (1991–2004), and president, chief executive officer, and director of Financial Executives International, the professional association for senior-level corporate financial executives (2007–8). He currently serves as president of Cangemi Company LLC. Mr. Cangemi recently completed a two-year term on the International Accounting Standards Board Standards Advisory Council and a year as the FEI representative on the board of COSO. For more information seewww.canco.us.

Preface

On July 21, 2010, President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act; this Act is also often referred to as DFA, SOX II, the Sequel, Financial SOX, F-SOX, and other variants of these), arguably the most significant financial reform legislation enacted since the Securities Act of 1933 and the Securities Exchange Act of 1934. Just as those Depression-era pieces of legislation were crafted in response to the Great Crash of 1929, the Dodd-Frank Act grew out of what is termed the Great Recession of 2008.

At 848 pages, the final length of the Dodd-Frank Act (H.R. 4173) is considerably shorter than the 2,000-plus pages hyped by the media, yet its length and complexity far surpass the 66-page Sarbanes-Oxley Act of 2002 and the 37-page Glass-Steagall Act of 1933. Many have argued that the incremental repeal of various provisions of Glass-Steagall, such as removing the wall between investment and depository banks, sowed the seeds of the 2008 crisis—a series of events that brought our globally interwoven financial system to the brink of collapse.

Just as Sarbanes-Oxley was created to increase the transparency of and accountability within publicly traded companies, the intention of the Dodd-Frank Act was to unravel the tangled web of financial service company valuations—valuations that were all too often obscured by complex and opaque financial instruments. The introduction of H.R. 4173 on December 2, 2009, was a reaction to having witnessed banks, ratings agencies, insurance companies, accounting firms, and hedge funds serve up a toxic stew of tainted assets and liabilities that reeked of systemic non-disclosure.

As with Sarbanes-Oxley, critics have charged that the Dodd-Frank Act was hastily assembled and rammed through Congress as a short-term fix, absent consideration of its long-term consequences. Although at press time, regulators are still in the process of sorting through its requirements, creating new agencies, and seeking public comment on various regulatory provisions, it is clear that the Dodd-Frank Act will represent a sea change in the way financial services companies—from debt collection agencies to too-big-to-fail banks—conduct their governance, risk management, and compliance activities. As such, the Dodd-Frank Act of 2010 must be understood, accommodated, and mastered in order to integrate regulatory requirements with business objectives.

To stay up-to-date with the Dodd-Frank Act as it evolves from here, visit www.TheDoddFrankAct.com.