The Long Road to Financial Reform: Wolters Kluwer Law & Business Reviews Major Milestones
Friday, July 16, 2010
Posted by: Boomer Consulting, Inc.
When the Senate passes the Dodd-Frank Wall Street Reform and Consumer Protection Act, expected later this week, it will send to President Obama the most historic overhaul of U.S. financial regulation since the 1930s, according to Wolters Kluwer Law & Business. Wolters Kluwer Law & Business is a leading provider of research information and software solutions in key specialty areas for legal and business professionals, with products under the CCH and Aspen names (wolterskluwerlb.com).
"This is the culmination of an 18-month journey to enact regulation to reform U.S markets in the wake of the greatest financial crisis since the Great Depression,” said Wolters Kluwer Law & Business Principal Federal Securities Law Analyst Jim Hamilton, JD, LLM. "The Dodd-Frank Act restructures the foundations of the U.S. financial regulatory system, enhances regulation over more products and actors and promotes greater accountability in capital markets.”
According to Hamilton, the road to regulatory reform began when President Obama signed the American Recovery and Reinvestment Act of 2009 on February 17, 2009. In provisions authored by Senator Dodd, the recovery legislation mandated important corporate governance safeguards and imposed various executive compensation limits on companies participating in the troubled assets relief program (TARP). This included a requirement for a nonbinding shareholder advisory vote on executive compensation and for independent compensation committees – requirements that ultimately would be placed on all listed companies by the Dodd-Frank Act.
Other major milestones on the road to reform have included:
- February 25, 2009: President Obama outlined seven broad principles involving transparency, systemic risk management and investor protection to guide Congress in passing this historic legislation to reform the nation’s outdated financial regulatory regime (remarks by the President after Regulatory Reform Meeting).
- March 30, 2009: Senate Banking Committee Chair Christopher Dodd and House Financial Services Committee Chair Barney Frank sent a letter to President Obama pledging to work together to pass legislation creating a framework for 21st century regulation that would enhance financial stability and protect consumers and investors.
- May 20, 2009: President Obama signed the Fraud Enforcement and Recovery Act (FERA) improving the enforcement of securities and commodities fraud and financial institution fraud involving asset-backed securities and fraud related to federal assistance and relief programs. The legislation expands the scope of securities fraud provisions to include commodities and derivatives fraud.
- June 2009: The Obama Administration proposed to Congress the most sweeping and fundamental regulatory reform of the U.S. financial and securities markets since President Franklin D. Roosevelt’s New Deal. The proposal was based on the Treasury Department’s Financial Regulatory Reform, A New Foundation: Rebuilding Financial Supervision and Regulation (June 17, 2009).
- December 11, 2009: The U.S. House of Representatives passed the Wall Street Reform and Consumer Protection Act of 2009 (HR 4173) to restructure the financial services regulatory system.
- May 20, 2010: The U.S. Senate passed Restoring American Financial Stability Act of 2010 (S. 3217, the Senate version of H.R. 4173) to bring about far-reaching reforms.
- June 26, 2010: The House-Senate conference report was issued reconciling the House and Senate versions of the financial services regulatory reform bills.
- June 30, 2010: The U.S. House of Representatives passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. It isbased on the themes of regulating systemic risk and OTC derivatives, enhancing transparency and disclosure, moving executive compensation regimes away from a culture of short-term risk taking towards long-term value creation, expanding consumer and investor protection and preventing regulatory arbitrage.
"After nearly two years of congressional hearings and extremely intense legislative negotiations, we are on the verge of historic and comprehensive reform of U.S. financial regulation,” said Hamilton. "This is landmark legislation that touches many aspects of banking and securities regulation, regulates the OTC derivatives markets for the first time and enhances the powers and resources of the SEC."
For More Information
Members of the press interested in speaking with Wolters Kluwer Law & Business securities and banking law experts should contact Leslie Bonacum at 847-267-7153, email@example.com; or Brenda Au at 847-267-2046, firstname.lastname@example.org.
The legal community and others can visit the Financial Reform News Center at http://financialreform.wolterskluwerlb.com for a cohesive and robust selection of new developments and analysis. Additionally, Jim Hamilton’s World of Securities Regulation offers unique analysis on securities law and regulation.
About Wolters Kluwer Law & Business
Wolters Kluwer Law & Business is a leading provider of research products and software solutions in key specialty areas for legal and business professionals, as well as casebooks and study aids for law students. Its major product lines include Aspen Publishers, CCH, Kluwer Law International and Loislaw. Its markets include health care organizations, law firms, law schools, corporate counsel and professionals requiring legal and compliance information. Wolters Kluwer Law & Business, a unit of Wolters Kluwer, is based in New York City and Riverwoods, Ill. Wolters Kluwer is a market-leading global information services company.