In this newsletter, we provide a snapshot of the principal US, European and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.

Bank Prudential Regulation & Regulatory Capital

Federal Reserve Issues Annual Threshold Adjustment for Small Loans Exemption for Special Appraisal Requirements

On December 23, 2014, the Governors of the Federal Reserve Board ("Federal Reserve Board") issued an annual technical adjustment regarding the exemption of small loans from special appraisal requirements applicable to higher-priced mortgage loans. The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") required creditors to obtain a written appraisal based on a physical visit of the home's interior prior to making a higher-priced mortgage loan. However, the rule also created an exemption for loans of $25,000 or less with an annual adjustment based on the annual percentage change in the Consumer Price Index ("CPI"). Based on the increase in the CPI for Urban Wage Earners and Clerical Workers as of June 1, 2014, the loan exemption threshold was adjusted to $25,500. The amendment will be effective January 1, 2015.

The Federal Register notice is available at:

http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20141223a1.pdf.

European Banking Authority Issues Report and Opinion on Securitization Retention, Due Diligence and Disclosure Requirements under CRD IV

On December 22, 2014, the European Banking Authority ("EBA") issued a report followed by an opinion on securitization retention, due diligence and disclosure requirements under the Capital Requirements Directive IV ("CRD IV") package. The report assesses the compliance and measures taken by national competent authorities in relation to securitization risk retention, due diligence and disclosure requirements and the opinion makes nine recommendations on the overall appropriateness of requirements related to exposures to transferred credit risk, and one recommendation on the convergence of the retention rules regulatory frameworks.

The report and opinion are available at:

http://www.eba.europa.eu/documents/10180/534414/Securitisation+Risk+Retention+Report.pdf

and

http://www.eba.europa.eu/documents/10180/657547/EBA+OP+2014+14%28%20Securitisation+Risk+Retention+Opinion%29.pdf.

European Banking Authority Issues Guidelines on Materiality, Proprietary and Confidentiality

On December 23, 2014, the EBA published its guidelines on materiality, proprietary and confidentiality, and disclosure frequency under CRD IV. The guidelines form part of the EBA's strategy to increase transparency within the EU banking sector and aim to increase consistency in Pillar 3 disclosure practices. The guidelines provide a framework that covers the processes that should be followed and criteria that should be considered in the assessment of the use of any disclosure waiver, and sets out the information that should be provided by institutions when using disclosure waivers. The EBA requires national competent authorities to inform the EBA by February 23, 2015 if they comply or intend to comply with the guidelines.

The guidelines are available at:

http://www.eba.europa.eu/documents/10180/937948/EBA+GL+2014+14+%28Guidelines+on+disclosure%29.pdf .

To view the full newsletter please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.