The EU Corporate Sustainability Reporting Directive (“CSRD“) entered into force on 5 January 2023 and the associated European Sustainability Reporting Standards (“ESRS“) were adopted by the European Commission on 31 July 2023. Together, the CSRD and ESRS create detailed sustainability reporting requirements that will apply to a significant number of EU and non-EU companies and substantially increase the scope of their sustainability reporting.

Application of the rules is now imminent and, for some, CSRD reporting periods will begin from 1 January 2024.

In this update, we take a look at the implications of the CSRD for non-EU companies and what companies can do to prepare.

The US federal banking regulators recently proposed extensive revisions to the regulatory capital requirements, referred to as the Basel Endgame.  The July and August proposals – targeted at banks with $100 billion (or more) in assets – are of critical importance, as the amount of capital a bank must maintain with respect to any particular loan, investment, or activity is often the most significant factor in determining whether the relationship is profitable – or even feasible.  Some of the proposed revisions were expected, but others have been motivated by the recent banking crisis.

The Basel Endgame and long-term debt rulemakings will not be the end of the discussion on regulatory capital requirements.  Larger banks, their counterparties, and their competitors, all are expected to respond by making changes to their product offerings, operations, and capital structure.  Some of these changes are obvious or easy, but others will require sustained commitment and attention to detail.

Access publications, podcasts, and seminars on our Basel Endgame Resource Center, and keep current on related developments.

Webinar: September 18, 2023

1:00-3:00 p.m. ET

Join Mayer Brown and the Mortgage Bankers Association for brief discussions and updates on market developments, the M&A environment, the effect of the Basel III Endgame Proposals on the mortgage market, insurance sector interest in mortgage assets, FHLB reform, and more.

Register here.

Guest Speakers

  • Michael Fratantoni, Chief Economist and Senior Vice President of Research and Industry Technology, Mortgage Bankers Association
  • Sasha Hewlett, Director, Secondary & Capital Markets, Mortgage Bankers Association

See the complete agenda for this virtual event.

September 19, 2023 Webinar
12:30pm – 1:30pm ET
Register here.

On September 19, 2023, Mayer Brown partners, Anna Pinedo and Matthew Bisanz, will speak at the Fordham University Corporate Law Center on the new US Basel Endgame proposal.

As the Federal Reserve proposes stricter banking rules in line with the Basel Endgame capital requirements, the financial services industry and its lawyers are left wondering what the new regulations mean for borrowing costs and the economy overall. Yet the banking turmoil that rocked 2023 makes it hard for banks to object to more demanding capital adequacy rules. Join us to explore these important questions and learn more about how recent developments will affect the banking industry, corporations, capital markets, and consumers.

Learn more about this session here.

On August 23, 2023, the U.S. Securities and Exchange Commission (“SEC”) adopted amendments (the “Amendments”) to Rule 15b9-1 under the Securities Exchange Act of 1934 that generally eliminate the exemption from the requirement to become a member of a national securities association – effectively, the Financial Industry Regulatory Authority, Inc. (“FINRA”) – for SEC-registered broker-dealers that engage in proprietary trading of securities off the national securities exchanges of which they are members. As a result, proprietary trading firms that can no longer rely on Rule 15b9-1 must either become members of FINRA or limit their trading activities to the exchanges of which they are members. The Amendments become effective 60 days after publication in the Federal Register, and the compliance date is one year after publication in the Federal Register.

In this Legal Update, we provide an overview of the Amendments and discuss certain considerations relating to FINRA new member applications and regulatory fees.

Read our Legal Update.

Non-fungible token (“NFT”) issuers and the NFT market will want to take note of the US Securities and Exchange Commission’s (“SEC”) statement this week that NFTs issued by Impact Theory, LLC were “securities” under US federal securities law and the sale of those NFTs without registration or reliance on an exemption from the registration requirements violated federal securities law. The publication of this settlement order highlights the SEC’s continued digital enforcement policy and represents the first time the SEC has charged an NFT issuer with selling unregistered securities.

In this Legal Update, we provide a snapshot of the settlement and dissents from two SEC Commissioners and distill some key takeaways for the market.

Read our Legal Update.

On July 27, 2023, the US banking regulators issued a proposal to significantly revise the risk-based capital requirements applicable to large banks and to banks with significant trading activity. The proposal, which is colloquially referred to as “Basel III Endgame” or “Basel IV,” includes important changes to the calculation of credit risk weights for securitization exposures, as well as a new operational risk capital charge on certain fees and commissions. This white paper provides a detailed review of those changes, discusses their possible impacts, and highlights specific provisions that market participants are likely to focus on in their comment letters.

Continue reading here.

In late July 2023, US banking agencies released proposals to significantly revise the risk-based regulatory capital requirements for certain midsize and larger US banking organizations, and change how the capital surcharge is calculated for global, systemically important banking organizations. These proposals are critical, as the amount of capital a bank must maintain with respect to any particular loan, investment or activity is typically a significant—if not the most significant—factor in determining whether the relationship is profitable or even feasible. The proposals are not “capital neutral,” and would effectively increase the need for capital in a number of important respects. Please join Mayer Brown partners Anna Pinedo and Matt Bisanz as they discuss the implications of the Basel Endgame Proposal on capital markets and related activities.

Listen to the complete podcast here.

On August 29, 2023, US federal banking regulators issued a proposal for long-term debt (“LTD”) requirements on certain midsize and larger US banking organizations (the “LTD Proposal”). The LTD Proposal is important because it would require many regional and larger banking organizations to issue significant amounts of LTD. In this Legal Update, we provide background on the existing LTD requirements, discuss the LTD Proposal, and highlight some of its potential impacts.

Read our legal update.

On August 30, 2023, the staff of the U.S. Securities and Exchange Commission posted three compliance and disclosure interpretations (“C&DIs”) providing guidance on Form F-SR.  Form F-SR is  the new form for a foreign private issuer  (“FPI”) that files SEC reports on Forms 20-F and 6-K to use for quarterly tabular disclosure of daily share buybacks.

C&DI 113.01 specified that Form F-SR does NOT need to be filed if during the covered fiscal quarter the FPI or affiliated purchaser did not repurchase any of its equity securities that are registered under Section 12 of the Securities Exchange Act of 1934.

C&DI 113.02  provided if the FPI or affiliated issuer does not have any buybacks that would trigger a Form F-SR for a quarter, the FPI does NOT need file a Form F-SR for that quarter solely to check the box for purchases or sales of securities by a director or member of senior management.

C&DI 113.03 stated that if an FPI or affiliated purchaser engaged in a buyback during its fourth quarter, the FPI must file a Form F-SR within 45 days after the end of the quarter; it CANNOT wait until the Form 20-F to report those buybacks.

For more information the SEC’s new disclosure rules for shares buybacks, see our Legal Update, “SEC Adopts New Share Repurchase Rules,” dated May 8, 2023.

The complete text of these new C&DI’s appears below:

Question 113.01

Question: Is a Form F-SR required to be filed if, during the covered fiscal quarter, the foreign private issuer or affiliated purchaser did not repurchase any of its equity securities registered under Exchange Act Section 12?

Answer: No, a Form F-SR is not required to be filed under these circumstances. Note, however, there is no de minimis exception to the Form F-SR filing requirement; even the repurchase of a very small number of equity securities would trigger a Form F-SR filing. [August 30, 2023]

Question 113.02

Question: A foreign private issuer or affiliated purchaser did not conduct any repurchases that would trigger the requirement to file a Form F-SR. Is a Form F-SR nevertheless required solely to check the box under “Registrant Purchases of Equity Securities” section of Form F-SR for the covered purchases or sales of securities by a director or member of senior management who would be identified pursuant to Item 1 of Form 20-F?

Answer: No. [August 30, 2023]

Question 113.03

Question: Is a Form F-SR required to be filed for the final quarter of the fiscal year?

Answer: Yes, if a foreign private issuer or affiliated purchaser engaged in repurchases during the final quarter of the fiscal year, then a Form F-SR would be required for that final quarter and must be filed within 45 days after the end of the quarter. Foreign private issuers are not permitted to wait to report the repurchases during the final quarter of the fiscal year in the Form 20-F for that fiscal year. See Exchange Act Release No. 34-97424 (May 3, 2023) at fn. 185. [August 30, 2023]