Weekly RoundUp
September 15, 2022

OCC Releases Strategic Plan for Fiscal Years 2023-2027

In This Weekly Roundup Issue. The Office of the Comptroller of the Currency (OCC) released its strategic plan for the next five years; the U.S. Securities and Exchange Commission (SEC) announced plans to add industry offices focused on crypto assets and industrial applications and services; the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (collectively, the Federal bank regulatory agencies) issued a joint statement reaffirming their commitment to Basel III Standards; in light of the SEC’s recently published pay versus performance final rules, Goodwin prepared an FAQ to help guide companies subject to these rules; and the SEC announced settlements with nine SEC-registered investment advisers to private funds. These developments are discussed in more detail below.

Regulatory Developments

OCC Releases Strategic Plan for Fiscal Years 2023-2027

On September 6, the OCC released its strategic plan for the next five years, covering fiscal years 2023-2027 (the Plan). The OCC’s mission is to ensure that national banks and federal savings associations operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulation. The Plan describes the OCC’s approach to fulfilling its mission through (i) agility, adaptability and learning, (ii) credibility and consistent trust, and (iii) leading on supervision as the banking system evolves. The Plan aims to achieve these strategic goals through, among other things, investing in people, focusing on the OCC’s culture, attracting new skills and expertise, and modernizing the OCC’s operations, technology, processes and support systems. 

SEC Division of Corporation Finance to Add Industry Offices Focused on Crypto Assets and Industrial Applications and Services

On September 9, the SEC announced plans to add an Office of Crypto Assets and an Office of Industrial Applications and Services to the Division of Corporation Finance's Disclosure Review Program (DRP). The two new offices will join the seven existing offices that provide focused review of issuer filings and that are grouped by industry expertise to further the Division’s work to promote capital formation and protect investors. The DRP anticipates the new offices will be established later this fall. The goal of these offices is to provide a greater and more specialized support to the crypto and life sciences industries. The Office of Crypto Assets will continue the work currently performed across the DRP to review filings involving crypto assets while the Office of Industrial Applications and Services will be responsible for the non-pharma, non-biotech, and non-medicinal products companies.

“The creation of these new offices will enable the DRP to enhance its focus in the areas of crypto assets, financial institutions, life sciences, and industrial applications and services and facilitate our ability to meet our mission.”
- Renee Jones, Director of the SEC’s Division of Corporation Finance

Federal Agencies Reaffirm Commitment to Basel III Standards

In a joint statement on September 9, the Federal bank regulatory agencies reaffirmed their commitment to implementing enhanced regulatory capital requirements that align with the final set of “Basel III” standards issued by the Basel Committee on Banking Supervision in December 2017. They added that implementing the international standards for large banking organizations “would strengthen the resilience of the domestic banking system.”

The agencies said they plan to seek public input on the new capital standards and are currently developing a proposed rule for issuance. They also noted that community banks, which are subject to different capital requirements, would not be affected by the proposal.

Frequently Asked Questions: Pay Versus Performance Final Rules

The SEC published final rules in late August 2022 that will require new pay versus performance disclosure in 2023 proxy statements, as described in our recent client alert. These rules will require companies that are not exempt from the new rules to provide detailed disclosures about specific executive compensation measures and company financial performance measures.

Goodwin’s Public Company Advisory Practice has prepared an FAQ on the pay versus performance rules that offers guidance on an extensive set of questions about how the new rules will apply (including covered companies and filings and effective dates and transition provisions), the disclosures required by the new rules, and how companies can start preparing now for these new disclosures.

Read the FAQ.

Litigation & Enforcement

SEC Sends Message to Private Fund Sponsors on Audit Obligations Under Custody Rule Through Enforcement Actions

On September 9, the SEC announced settlements with nine SEC-registered investment advisers to private funds with respect to alleged violations of Rule 206(4)-2 under the Investment Advisers Act of 1940 (the Custody Rule) and related Form ADV violations. Specifically, these settlements included three types of violations: (i) the failure to have a private fund audited in accordance with the annual audit exemption under the Custody Rule, (ii) the failure to timely deliver the audited financial statements as required under the Custody Rule, and (iii) the failure to amend Form ADV, Part 1A, Schedule D, Section 7.B.23(h) to reflect the receipt of the audit opinion following the annual amendment of the Form ADV.

Read the client alert for key takeaways and a summary chart of the enforcement actions.

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Samantha M. Kirby
William McCurdy

Serene Qandil
Jiabao (Eva) Xu