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

Bank Prudential Regulation & Regulatory Capital

US Federal Banking Agencies Jointly Issue Interim Final Rules to Expand Exam Cycle for Smaller Banks and Branches

On February 29, 2016, the US Office of the Comptroller of the Currency, the US Board of Governors of the Federal Reserve System and the US Federal Deposit Insurance Corporation jointly issued and requested public comment on interim final rules to implement section 83001 of the Fixing America's Surface Transportation Act, or FAST Act, which permitted the agencies to expand the on-site examination schedule for qualifying insured depository institutions with less than $1 billion in total assets to once every 18 months from once every 12 months. The interim final rules make parallel changes to the regulations of the federal agencies regarding on-site examination cycles for US branches and agencies of foreign banks with total assets of less than $1 billion. Under the interim final rules, the number of institutions that may qualify for an expanded 18-month examination cycle increased by 617, to close to 5,000 banks and savings associations. In addition, the number of US branches and agencies of foreign banks that may qualify for the 18-month examination cycle increased by 26 branches and agencies to a 89 branches and agencies. The interim final rules are effective on February 29, 2016. Comments on the rules must be received by April 29, 2016.

The full text of the rules is available at: https://www.gpo.gov/fdsys/pkg/FR-2016-02-29/pdf/2016-03877.pdf.

US Office of the Comptroller of the Currency Issues Revised Process for Administrative Enforcement Actions of Bank Secrecy Act and Anti-Money Laundering Requirements

On February 29, 2015, the OCC published a bulletin summarizing its process for initiating and proceeding with any enforcement action for noncompliance with Bank Secrecy Act compliance program requirements or repeated or uncorrected BSA compliance problems. The OCC bulletin supplements the "Interagency Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements" and rescinds OCC Bulletin 2005-45, "Process for Taking Administrative Enforcement Actions Against Banks Based on BSA Violations," dated December 23, 2005. The revised OCC bulletin describes the OCC's process for conducting administrative enforcement actions based on BSA-compliance issues, which, in each case, begins with a cease-and-desist order issued by the OCC. Pursuant to the OCC bulletin, the enforcement action process now includes a provision which requires the OCC to give any bank investigated by the OCC for noncompliance with BSA or anti-money laundering requirements an opportunity to respond before the decision to issue a cease-and-desist order is finalized. In each case, the OCC will notify the Financial Crimes Enforcement Network of all formal and informal enforcement actions.

More information regarding the OCC bulletin is available at: http://www.occ.gov/news-issuances/bulletins/2016/bulletin-2016-6.html.

US Office of the Comptroller of the Currency Issues Revised Policies on Civil Money Penalties

On February 26, 2016, the OCC published revisions to its policy for assessing civil money penalties as set forth in its Policies and Procedures Manual. The revised PPM, titled "Civil Money Penalties," replaces the PPM of the same title issued in June 1993. The revised PPM sets forth the OCC's policies and procedures when assessing civil money penalties against entities such as institution-affiliated parties, national banks, federal savings associations, federal branches and agencies, and bank service companies and service providers.

The full text of the OCC PPM is available at: http://www.occ.gov/news-issuances/bulletins/2016/bulletin-2016-5a.pdf

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