In 2010, the US Supreme Court in Morrison v. National Australia Bank established a new standard, a transactional test, for determining the extraterritorial application of Section 10(b), which replaced the prior conduct-and-effects test.  Following the Morrison decision, Dodd-Frank Act Section 929P(b) provided US courts with jurisdiction in cases brought by the SEC or the US government that involved conduct within the United States that constitutes significant steps in furtherance of the violation, even if the securities transaction occurs outside the United States and involves only foreign investors or conduct occurring outside the United States that has a foreseeable substantial effect within the United States.  It was not clear whether the Dodd-Frank Act had, in effect, overcome the limits set by Morrison.

The Tenth Circuit Court of Appeals court date considered this question in a recent case, SEC v. Scoville and Traffic Monsoon. The Tenth Circuit considered whether the SEC had authority to bring a civil enforcement action under the federal securities antifraud provisions in a securities transaction outside of the United States.  The Court applied the conduct-and-effects test which took the view that was reinstated by the Dodd-Frank Act in order to allow an action brought by the SEC to proceed.  However, private actions under the antifraud provisions would continue to be governed by the Morrison transactional test.

The Securities and Exchange Commission adopted final rules requiring public companies (other than foreign private issuers and certain fund issuers) to disclose in proxy statements their policies regarding hedging transactions in the company’s securities by directors and employees.  The Commission was required by Section 955 of the Dodd-Frank Act to adopt such rules.

The Commission’s fact sheet notes that new Item 407(i) of Regulation S-K will require a company to describe any practices or policies it has adopted regarding the ability of its employees (including officers) or directors to purchase securities or other financial instruments, or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of equity securities granted as compensation, or held directly or indirectly by the employee or director.

The final rule text has not been released yet.

Earlier this month, the Commodity Futures Trading Commission proposed rules that would codify certain relief provided to commodity pool operators and commodity trading advisors in the post Dodd-Frank Act years.  The relaxation of the prohibition against general solicitation in Rule 144A offerings and certain Rule 506 offerings led to ambiguity regarding CFTC Rules 4.7(b) and 4.13(a)(3) that restricted funds from marketing to the public. A while after the Securities and Exchange Commission’s amendments to Rule 144A and Rule 506 became effective, the CFTC staff issued an exemptive letter harmonizing the SEC’s and the CFTC’s rules provided that CPOs relying on the exemptive relief file a notice with the CFTC.  Now, the CFTC amendments would revise Rule 4.7(b) and Rule 4.13(a)(3) to eliminate the prohibition on marketing a pool to the public.

Thursday, October 10, 2018
1:00 p.m. – 2:00 p.m. EDT

This webinar provides all the basics a lawyer needs to be conversant in and familiar with the Commodity Exchange Act and the regulatory framework for futures, commodity options, swaps, and retail foreign exchange. Partner Anna T. Pinedo and Partner Curtis A. Doty will discuss topics including:

  • The jurisdiction of the Commodity Futures Trading Commission (CFTC);
  • Who are the registrants and what authority does the CFTC have over them? What role do the Securities and Exchange Commission and other regulators have?;
  • The regulation of swaps post Dodd-Frank;
  • Commodity pool definition and status as a commodity pool operator; and
  • An overview of recent changes to swaps regulation.

PLI will provide CLE credit.

For more information, or to register, please visit the event website.

Wednesday, July 18, 2018
1:00 p.m. – 2:00 p.m. EDT

The new administration began with calls for a repeal of the Dodd-Frank Act and related regulations. Over time, banking agency actions and legislation have brought about more measured regulatory changes. During our session, we will review the changes that have come as a result of actions taken by the banking agencies, including proposed amendments to the Volcker Rule and the proposed stress capital buffer. We will also address the changes contained in the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act. We will also provide some perspective on the additional changes that should be expected in the near term.

We will address the following:

  • Overview—outlining changes being made/proposed by banking agencies and legislative changes;
  • Amendments proposed by the agencies to the Volcker Rule;
  • Amendments to the Volcker Rule contained in the Crapo legislation;
  • Changes to the designation of entities subject to the enhanced prudential supervision provisions; and
  • Securities law provisions contained in the Crapo legislation.


  • David R. Sahr
    Partner, Mayer Brown LLP
  • Anna T. Pinedo
    Partner, Mayer Brown LLP

For more information, or to register for this complimentary session, please visit the event website.

Congress has passed the Economic Growth, Regulatory Relief, and Consumer Protection Act, which principally addresses financial regulatory measures.  The legislation also includes a number of securities law related provisions.  For example, Section 503 requires that the SEC review the findings and recommendations of the annual SEC Government-Business Forum on capital formation and address the findings and recommendations publicly.  Section 504 expands the Section 3(c)(1) exception under the Investment Company Act to include venture capital funds that have up to 250 investors and $10 million in aggregate committed capital contributions and uncalled capital.  Section 507 raises the Section 701 threshold to $10 million and indexes the threshold to inflation going forward.  Section 508 allows reporting companies to rely on Regulation A.  Rule 509  provides closed-end funds listed on a national securities exchange and certain interval funds to benefit from the same securities offering and other provisions available to operating companies.  After the Small Business Credit Availability Act was passed modernizing the securities offering and communications related provisions for BDCs, there had been concern that closed-end funds had been forgotten.

See the firm’s Legal Update here.


The Senate bill (S. 2155) titled the Economic Growth, Regulatory Relief, and Consumer Protection Act, which focuses principally on scaling back various Dodd-Frank Act bank regulatory provisions, also contains a number of securities law-related measures.  The securities law measures that found their way into the Senate bill by way of an amendment reflect the text from various bills that had been introduced in, and passed by, the House on a standalone basis.  These include the following:

  • Section 501 that would amend the Securities Act in order to apply the exemption from state regulation of a securities offering to securities listed on any national securities exchange, effectively broadening the definition of a “covered security;”
  • Section 503 that would require the Securities and Exchange Commission (the SEC) to review the recommendations of the annual SEC Government-Business Forum on Capital Formation and disclose any action taken in light of such recommendations;
  • Section 504 that would amend Section 3(c)(1) of the Investment Company Act in order to permit “qualifying venture capital funds” to be exempt from the Investment Company Act if they have no more than 250 beneficial owners (an increase from the current 100 beneficial owner threshold) and aggregate committed capital not exceeding $10 million;
  • Section 507 that would direct the SEC to amend Rule 701 in order to increase from $5 million to $10 million (subject to inflationary adjustments) the aggregate sales price or amount of securities sold during any 12-month period in excess of which the issuer is required to deliver additional disclosure to employees;
  • Section 508 that would direct the SEC to amend Regulation A in order to make it available to Exchange Act reporting companies; and
  • Section 509 that would allow closed end funds to rely on the securities offering and proxy rules available to operating companies and bring them to parity with operating companies and also now with business development companies, or BDCs, which were the beneficiaries of provisions incorporated into the recently enacted spending bill.