The Wall Street Reform and Consumer Protection Act

Client Advisory

December 29, 2009

The House Financial Services Committee has responded to the nation’s financial crisis by crafting a comprehensive set of measures that will modernize America’s financial regulations and hold Wall Street accountable. If signed into law, this package of reforms will work together to address the myriad causes -from predatory lending to unregulated derivatives - that led to last year’s meltdown. The Wall Street Reform and Consumer Protection Act includes the following major provisions:

Consumer Protections: Creates the Consumer Financial Protection Agency (CFPA), a new, independent federal agency solely devoted to protecting Americans from unfair and abusive financial products and services.

Financial Stability Council: Creates an inter-agency oversight council that will identify and regulate financial firms that are so large, interconnected, or risky that their collapse would put the entire financial system at risk. These systemically risky firms will be subject to heightened oversight, standards, and regulation.

Dissolution Authority and Ending “Too Big to Fail: Establishes an orderly process for dismantling large, failing financial institutions like AIG or Lehman Brothers in a way that ends bailouts, protects taxpayers, and prevents contagion to the rest of the financial system.

Executive Compensation: Gives shareholders a “say on pay” - an advisory vote on pay practices including executive compensation and golden parachutes. It also enables regulators to ban inappropriate or imprudently risky compensation practices, and it requires financial firms to disclose any compensation structures that include incentive-based elements.

Investor Protections: Strengthens the SEC’s powers so that it can better protect investors and regulate the nation’s securities markets. It responds to the failures to detect the Madoff and Stanford Financial frauds by ordering a study of the entire securities industry that will identify needed reforms and force the SEC and other entities to further improve investor protection.

Regulation of Derivatives: Regulates, for the first time ever, the over-the-counter (OTC) derivatives marketplace. Under the bill, all standardized swap transactions between dealers and “major swap participants” would have to be cleared and traded on an exchange or electronic platform. The bill defines a major swap participant as anyone that maintains a substantial net position in swaps, exclusive of hedging for commercial risk, or whose positions create such significant exposure to others that it requires monitoring.

Mortgage Reform and Anti-Predatory Lending: Would incorporate the tough mortgage reform and anti-predatory lending bill that the House passed earlier this year. The legislation outlaws many of the egregious industry practices that marked the subprime lending boom, and it would ensure that mortgage lenders make loans that benefit the consumer. It would establish a simple standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.

Reform of Credit Rating Agencies: Addresses the role that credit rating agencies played in the economic crisis, and takes strong steps to reduce conflicts of interest, reduce market reliance on credit rating agencies, and impose a liability standard on the agencies.

Hedge Fund, Private Equity and Private Pools of Capital Registration: Fills a regulatory hole that allows hedge funds and their advisors to escape any and all regulation. This bill requires almost all advisers to private pools of capital to register with the SEC, and they will be subject to systemic risk regulation by the Financial Stability regulator.

Office of Insurance: Creates a Federal Insurance Office that will monitor all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis and undermine the entire financial system.

Title I -  Improving Financial Stability and Enhancing Prudential Regulation

This legislation --

Creates a Financial Stability Oversight Council to Monitor and Take Actions to Address Systemic Risk

The Council will monitor the marketplace to identify potential threats to the stability of the financial system.

Strengthens Regulation and Supervision of Large, Interconnected Financial Firms Reducing the Likelihood of Future Crises

The Council will subject financial companies and activities that pose a threat to financial stability to much stricter standards and regulation, including, with respect to companies, higher capital requirements, leverage limits, and limits on concentrations of risk.

Grants Limited Additional Authority to and Increases Accountability of the Federal Reserve:

The Federal Reserve will serve as the agent of the Council in regulating systemically risky firms on a consolidated basis and systemically risky activities wherever they occur, ensuring broad accountability for such regulation. The legislation also substantially enhances the authority of the Government Accountability Office (GAO) to examine the Board of Governors of the Federal Reserve and the Federal Reserve Banks to provide greater transparency to Fed facilities and actions.

Makes other significant changes to traditional prudential regulation of financial institutions:

Improved consolidated supervision. Removes outmoded Gramm-Leach-Bliley Act restraints on the consolidated supervision of large financial companies by the Federal Reserve, and provides specific authority to the Fed and other federal financial agencies to regulate for financial stability purposes and quickly address potential problems.

Provides enhanced regulation for non-banks and closes loopholes. Places additional safeguards on industrial loan corporations and other non-bank depository institutions, bringing them under a consolidated supervisory framework. Current non¬bank banks, ILCs, and similar companies that engage in commercial activities but are not currently subject to bank holding company regulation will not be forced to divest, but their financial activities will be brought under a properly regulated holding company structure for the first time and will face limits on transactions with their commercial affiliates to prevent self-dealing. The bill also closes the ILC loophole going forward, so that no additional commercial companies will be allowed to own banks or ILCs.

Consolidates federal bank and thrift regulators while preserving housing¬focused savings and loans. The existing system resulted in a bias toward “lighter touch” regulation and arbitrage among federal bank and thrift regulators. To address this, the bill consolidates the Office of Thrift Supervision with the main federal bank regulator, the Office of the Comptroller of the Currency. However, it preserves the thrift charter for thrifts dedicated to mortgage lending and subjects thrift holding companies to supervision by the Fed to further restrict arbitrage opportunities.

Imposes risk retention on all lenders. For the first time requires lenders to retain a portion of the risk they generate in order to provide real market discipline for underwriting decisions. New rules from the banking regulators and the SEC will require creditors to retain at least 5 percent of the credit risk associated with any loans that are transferred, sold or securitized.

Provides for Tough Restrictions on Assistance in Times of Crisis to Eliminate Government Bailouts

The FDIC may extend Emergency Financial Stabilization loan guarantees to solvent banks and predominantly financial companies only in a liquidity crisis. This facility, which will only result in a government payout if a guaranteed loan defaults, will be funded by fees paid by financial companies that request guarantees A similar facility managed by the FDIC actually generated positive net revenues for the government in the recent liquidity crisis. This authority sunsets on December 31, 2013, unless extended by Congress.

The Federal Reserve’s use of Section 13(3) authority will be subject to significant new restrictions. Use of this authority will require approval by two-thirds of the members of the Council and the consent of the Treasury Secretary after certification by the President that an emergency exists. This authority may not be used to provide assistance to individual companies, and Congress will be able to disapprove further use of the authority.

Dissolution Authority: The bill provides for orderly dissolution of failing firms, ending “Too Big to Fail”

The legislation provides for robust authority that will enable regulators to dissolve large, highly complex financial companies in an orderly and controlled manner, ensuring that shareholders and unsecured creditors, not taxpayers, bear the losses.

No firm will be “too big to fail - when a firm enters the dissolution process, management responsible for the failure will be dismissed, parties that should bear losses - particularly shareholders and unsecured creditors - will do so, and the firm will cease as a going concern.

The FDIC will be able to unwind a failing firm so that existing contracts can be dealt with and secured creditors’ claims can be addressed. However, unlike traditional bankruptcy, which does not account for complex interrelationships of such large firms and may endanger financial stability, this process will help prevent contagion and disruption to the entire system and the overall economy.

Dissolution costs will be repaid first from the assets of the failed firm at the expense of shareholders and creditors, and any shortfall will be repaid by assessments on all large financial firms. In this instance the bill follows the “polluter pays” model where the financial industry pays for its mistakes-not taxpayers.

There are no bailouts for failing institutions. If financial assistance is necessary for orderly dissolution, industry will pay for it.

A Systemic Dissolution Fund can be used to help wind down failing financial institutions, but not to preserve them. The Fund will be pre-funded by assessments on financial companies with more than $50 billion in assets and by hedge funds with more than $10 billion in assets. This authority sunsets on December 31, 2013, unless extended by Congress.

Title II -  Corporate and Financial Institution Compensation Fairness Act of 2009

Based on the “Say-on-Pay” legislation that passed the House in 2007 and the compensation-related legislative proposals released July 16th by the Treasury Department, H.R. 3269 bill has four major components:

1.  Say-on-Pay:

  • Applies to public companies
  • Requires annual shareholder advisory vote on compensation; requires shareholder advisory vote on golden parachutes; SEC allowed to exempt categories of public companies; in determining exemptions, SEC shall take into account the potential impact on smaller companies.
  • Requires at least annual reporting of annual say-on-pay and golden parachute.
  • Allows votes by all institutional investors, unless such votes are otherwise required to be reported publicly by SEC rule.
  • Provides that compensation approved by a majority say-on-pay vote is not subject to clawback, except as provided by contract or due to fraud to the extent provided by law.

2.   Independent Compensation Committee Requirement:

  • Applies to only public companies.
  • Requires compensation committees be made up of independent directors. It makes provision for smaller companies whose boards may not have separate compensation committee.
  • Requires that compensation consultants satisfy independence criteria established by the SEC.
  • SEC allowed to exempt categories of public companies. In determining exemptions, SEC shall take into account the potential impact on smaller companies.

3.   Incentive Based Compensation Disclosure Requirements:

  • Applies to all “financial institutions” with more than $1 bn in assets. The definition specifically includes banks, bank holding companies, broker-dealers, credit unions, investment advisors, Fannie Mae & Freddie Mac The definition also includes any financial institution identified asappropriate during joint rulemaking by the “relevant Federal      financial regulators” (see below).
  • Requires all “financial institutions” to disclose compensation structures that include any incentive based elements
  • Financial companies that do not have incentive-based payment arrangements are not required to make disclosures regarding incentive-based payment arrangements

4.  Incentive Based Compensation Standards:

  • Applies to all “financial institutions” with more than $1 bn in assets.
  • Requires federal regulators to proscribe inappropriate or imprudently risky compensation practices as part of solvency regulation.

Appropriate Federal Regulators”. The bill requires the following federal regulators to jointly determine the disclosure requirements and incentive-based compensation standards in Sec. 4 of the bill: Federal Reserve Bank, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Office of Thrift Supervision, National Credit Union Administration Board, Securities & Exchange Commission, Federal Housing Finance Agency.

Additional Features

  • The bill also requires GAO study of the correlation between compensation structure and excessive risk-taking.

Title III - Over-the-Counter Derivatives Markets Act Overview

Over-the-counter derivatives legislation for the first time addresses an unregulated part of the financial markets that poses a potential risk to the broader economy. This risk was more than apparent last year when the failure of Lehman Brothers tied up the funds of thousands of investors worldwide that had entered into swap trades with the bank. The federal government’s decision to backstop the huge swap positions created by AIG in its business of insuring the assets on bank balance sheets was driven by the threat an insolvency of the insurance company would pose to the broader financials stem.

Swaps are financial contracts typically traded over-the-counter (OTC)--directly between two counterparties-that require an exchange of cash payments. The payments are based on the performance of an asset such as a security, the change in an interest rate index or the default of a company. This market has grown significantly over the past 15 years to a volume in the hundreds of trillions of dollars. That translates into millions of contracts between large banks.

In setting out the first comprehensive system of regulation of the over-the-counter derivatives market, the legislation requires clearing and trading on exchanges or electronic platforms for all standardized transactions between dealers and other large market participants-called “major swap participants”. Over-the-counter derivatives include swaps, which are financial contracts that call for an exchange of cash flows between two counterparties based on an underlying rate, index, credit event or the performance of an asset.

The legislation divides jurisdiction over swaps between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC oversees activity in swaps that are based on securities like equity and credit-default swaps. The CFTC is responsible for all other swaps-including those based on interest rates and currencies.


The bill creates a mechanism to determine which swap transactions are sufficiently standardized that they must be submitted to a clearinghouse, or central counterparty (CCP) for clearing, a requirement when both counterparties are either dealers or major swap participants. Clearing organizations must seek approval from the appropriate regulator-either the CFTC or the SEC-before a swap or class of swaps can be accepted for clearing. Transactions in standardized swaps do not need to be cleared if one of the counterparties is not a swap dealer or major swap participant.

Mandatory Trading on Exchange or Swap Execution Facility

A standardized and cleared swap transaction where both counterparties are either dealers or major swap participants must either be executed on a board of trade, a national securities exchange or a “swap execution facility”-as defined in the legislation. If none of these venues makes a clearable swap available for trading, the trading requirement would not apply. Counterparties would, however, have to comply with transaction reporting requirements established by the appropriate regulator. The legislation also directs the regulators to eliminate unnecessary obstacles to trading on a board of trade or a national securities exchange.

Registration and Regulation of Swap Dealers and Major Swap Participants

Swap dealers and major swap participants must register with the appropriate Commission and dual registration is required in applicable cases. Capital requirements for swap dealers’ and major swap participants’ positions in cleared swaps must be set at greater than zero. Capital for non-cleared transaction must be set higher than for cleared transactions. The prudential regulators will set capital for banks, while the Commissions will set capital for non-banks at a level that is “as strict or stricter” than that set by the prudential regulators.

The regulators are directed to set margin levels for counterparties in transactions that are not cleared. The regulators are not required to set margin in transaction where one of the counterparties is not a dealer or major swap participant. In cases where an end user is a counterparty to a transaction, any margin requirements must permit the use of non-cash collateral.

Title IV -  Consumer Financial Protection Agency

The bill creates an independent Consumer Financial Protection Agency (CFPA) with the sole mission of protecting consumers when they borrow money, make deposits, or obtain other financial products and services. The CFPA will finally put consumer protection on par with “prudential” safety and soundness regulation after years of playing second fiddle, and address regulators’ past failures to impose effective consumer protections for subprime mortgages, credit cards, overdraft fees, and many other financial products.

The CFPA will write rules under existing consumer finance laws like the Truth in Lending Act and the Equal Credit Opportunity Act, and have authority to stop unfair, deceptive and abusive consumer financial products and services that may develop in the future.

The CFPA’s rules will cover all financial providers, including banks, thrifts, credit unions and non-bank financial institutions - consumers will not face different levels of protection because of the provider they choose. Non-bank institutions, like subprime mortgage companies that contributed significantly to the current crisis and payday lenders and money transmitters that are the source of many abuses in consumer finance, will be brought under comprehensive federal supervision for the first time with this legislation.

The legislation provides CFPA with a comprehensive toolkit ranging from consumer education to the power to bring suit and seek damages against abusive companies.

Reducing the Burden on Small Banks

The bill acknowledges the responsible role small banks and credit unions play in their communities by ensuring that they are not subject to undue regulatory burdens. Banks and thrifts under $10 billion in assets and credit unions under $1.5 billion in assets will continue to have their consumer protection examinations done by their existing regulators. The CFPA will play a backup role unless the primary regulators fail in their oversight, and these institutions will not see their assessments for consumer protection exams change under this bill.

Enhancing the Power of State Regulators:

The bill dials back the broad authority the Comptroller of the Currency has exercised to exempt federally chartered banks from state consumer protection laws. It also empowers state attorneys general and bank supervisors to enforce state laws against banks and thrifts when they violate CFPA regulations and their own state consumer protection laws.

Merchant exemption:

Merchants, retailers and other nonfinancial businesses will be excluded from the regulation and oversight of CFPA when they extend credit directly to consumers for the purchase of goods or services. Merchants and retailers can continue to provide credit and layaway plans without becoming subject to new regulation as long as they do not choose to resell the credit. Also, doctors and other businesses that bill their customers after a service is provided will be excluded.

Title V -  Capital Markets

The financial crisis exposed the US capital markets and its participants to the vulnerabilities of its financial regulatory regime. The capital markets measures set forth in this legislation are intended to reform and bolster the regulatory regime for the protection of investors and the further monitoring of systemic risk. The bill closes the regulatory loopholes for hedge funds and private pools of capital, enhances the transparency and accountability of the credit rating agencies, and sets forth a myriad of provisions to enhance the authority and reach of the SEC needed to further protect investors and the financial system.

The Private Fund Investment Advisers Registration Act

The Private Fund Investment Advisers Registration Act registers previously unregulated hedge funds, private equity companies and private pools of capital by mandating the registration of the funds’ private advisers. All investment advisers to private funds with over $150 million in assets under management will be required to register with the US Securities and Exchange Commission (“SEC”). The registration of these advisers will enable capital regulators to better understand how the entities operate and whether their actions pose a threat to the financial system as a whole.

Loopholes exploited by private funds in the past are closed by eliminating the private adviser exemption and limiting other exemptions for foreign private fund advisers and intrastate advisers. Venture capital companies are exempt from registration although reports and recordkeeping are mandated by the SEC to continue to monitor business activities and how they may contribute to systemic risk. Small Business Investment Companies (SBIC) are exempt.

A framework for collecting and sharing information by regulators and recordkeeping by the private fund advisers

New recordkeeping and disclosure requirements for private advisers will give regulators the information needed to evaluate both individual firms and entire market segments that have until this time largely escaped any meaningful regulation.

The SEC will share information with the Board of Governors of the Federal Reserve System (Fed) and the Financial Services Oversight Council as it deems necessary or appropriate in the public interest and for the protection of investors or the assessment of systemic risk.

The Accountability and Transparency in Rating Agencies Act :

The rating agencies (nationally recognized statistical ratings organizations or NRSROs) have assumed a central role in the global capital markets. They faced growing criticism over the past years which reached a crescendo in the recent financial crisis. In response, the Act enhances the SEC’s oversight and regulation of NRSROs. The legislation also:

Enhances accountability of the NRSROs by clarifying and reforming aspects of their liability under the securities laws. The bill enhances the accountability of NRSROs by clarifying the ability of individuals to sue NRSROs. The bill also amends provision of Rule 436(g) of the Securities Act of 1933 to remove the “expert” exemption for credit ratings included in a registration statement. NRSROs will now have greater liability under the securities laws if a rating is included in a registration statement.

Increases information available to investors and users of credit ratings by requiring greater public disclosure. Investors will gain access to more information about the internal operations and procedures of NRSROs, methodologies, ratings performance and short-comings in ratings assessment. In addition, the public will now learn more about how NRSROs get paid.

Creates a new regime of enhanced corporate governance. The bill requires each NRSRO to have a Board with at least one-third independent directors. The independent directors will oversee policies and procedures aimed at preventing conflicts of interest and improving internal controls, among other things. The bill adds a new duty to supervise an NRSRO’s employees and authorizes the SEC to sanction supervisors for failing to do so.

Mitigates conflicts of interests. The issuer-pay model has long created inherent conflicts of interest for which NRSROs have been criticized. The legislation contains new requirements designed to mitigate these conflicts of interest. Additionally, the bill significantly enhances the responsibilities of NRSRO compliance officers to address conflicts of interest. The bill also includes revolving-door protections when certain NRSRO employees go to work for an issuer.

Addresses the immense reliance on ratings by federal regulators and users of ratings. The bill removes all references to credit ratings in federal statutes under the jurisdiction of the Committee on Financial Services. The bill directs the agencies to devise a standard of creditworthiness to serve as a substitute for ratings in rules and regulations.

The Investor Protection Act of 2009

The massive $65 billion Madoff Ponzi scheme, the $8 billion Stanford Financial investment fraud, AIG’s troubled securities lending program, the freezing up of the auction-rate securities market, the breaking of the buck by the Reserve Primary Fund, and fraud in the municipal markets - highlight the need for comprehensive reforms that better protect investors.

In response, the Investor Protection Act of 2009 contains a number of reforms that strengthen oversight of U.S. securities activities, close regulatory loopholes, better safeguard investors, and efficiently regulate global capital markets. Specifically, the Investor Protection Act of 2009 includes reforms that:

Harmonize Fiduciary Duty of Brokers, Dealers and Investment Advisers

In the future, every financial intermediary that provides personalized investment advice to retail customers will have a fiduciary duty to the investor.

End Mandatory Arbitration: Pre-dispute mandatory arbitration clauses inserted into contracts have restricted the ability of defrauded investors to seek redress in the courts for wrongdoing. The SEC will be enabled to restrict or even prohibit the use of mandatory arbitration clauses in contracts with broker-dealers.

Double SEC Funding: SEC funding will double over the next five years from $1.115 billion in FY-2010 to $2.25 billion in FY 2015. This will provide the SEC with the ability to hire additional staff with industry expertise. In total, nearly $10 billion over the next 6 years will help the SEC better oversee America’s securities markets. In addition, the SEC will obtain additional funding via assessments on investment advisers.

Enhance Enforcement Powers, Rulemaking Authorities, and Global Coordination: The SEC will be better able to bring actions against individuals who aid and abet securities fraud and to impose collateral bars on individual to prevent wrongdoers in one securities industry from entering another. The bill provides and/or clarifies several important rule-making authorities, including:

  • Municipal Bond Market: The SEC will now regulate and establish formal rules for municipal financial advisors.
  • Illiquid Investments: The legislation clarifies that the SEC may impose limits on illiquid investments by mutual funds.
  • Securities Lending: The SEC’s authority to regulate stock loans and borrowing will be clarified in order to enhance market transparency, reduce collateral risk exposures, and limit conflicts of interest in the securities lending process.
  • Anti-Fraud Rules: The SEC’s existing anti-fraud rulemaking powers will be expanded to cover short sales in the over-the-counter markets and of non-equity securities, as well as all options on securities.
  • Information Collection: The SEC will have broader authority to collect information from and coordinate with foreign regulatory bodies, as well as to pursue legal cases across national borders.

Close Statutory Loopholes and Fix Faulty Laws: Closing a statutory loophole revealed by the Madoff scandal, the Public Company Accounting Oversight Board will gain the power needed to flexibly examine the auditors of broker-dealers. The Securities Investor Protection Corporation (SIPC), a semi-private entity that returns money to the customers of insolvent fraudulent broker-dealers, will provide increased protection to investors. In this regard, the bill:

    • Increases SIPC’s cash advance limits to levels of coverage that are similar to those provided by the FDIC;
    • Provides SIPC coverage for futures held in portfolio margin accounts;
    • Increases minimum assessments paid by SIPC members; and
    • Expands SIPC’s borrowing authority.

Reward Tipsters and Protect Whistleblowers. A new Investor Protection Fund will create incentives to identify wrongdoing in the securities markets and reward individuals whose information leads to successful enforcement actions. This fund will also pay for educational initiatives designed to help investors protect themselves against securities fraud. Whistleblowers will be better protected from retaliation as well.

Democratize and Reform Corporate Governance. The SEC will have the clear authority to issue proxy access regulations regarding the nomination of directors by shareholders to serve on a company’s board of directors, thereby further democratizing corporate governance.

Force a Comprehensive Review and Reorganization of Securities Regulation. An independent and comprehensive study of securities regulation by an experienced organizational consultant will identify reforms the SEC and securities regulators will make to further augment investor protection.

Expedite SEC Cases. To expedite cases against violators of securities laws, the SEC will generally need to complete enforcement investigations, compliance inspections and exams, within 180 days.

Exempt Small Companies from External Audit Requirements. The bill was amended in Committee to exempt public companies with less than $75 million in market capitalization from the Sarbanes-Oxley Act’s external audit of internal control requirements.

Increase Funding for Defrauded Investors. The SEC will be able to provide additional compensation to an increased number of defrauded investors as a result of this bill.

Title VI - Federal Insurance Office Act

Financial Insurance Expertise. Insurance plays a vital role in the smooth and efficient functioning of our economy, but the credit crisis highlighted the lack of expertise within the federal government regarding the industry, especially during the collapse of American International Group (AIG) and last year’s turmoil in the bond insurance markets. AFederal Insurance Office will provide national policymakers with access to the information and resources needed to respond to crises, mitigate systemic risks, and help ensure a well functioning financial system.

International Coordination. Although America’s insurance markets still operate on a state-by-state basis, today’s markets are global. The Federal Insurance Office will therefore provide a unified voice on insurance matters for the United States in global deliberations. The Federal Insurance Office and the United States Trade Representative will share the authority to enter into and negotiate agreements with foreign entities.

Promote Financial System Stability. Insurance accounts for 10% of the assets of the financial system and employs almost 40% of the employees in the financial services industry. Having a strong knowledge base at the Federal level of government will be instrumental in helping to promote stability in our financial system.

Timing and a Final Word

The timing will most likely be as follows:

Once the Senate passes financial reform legislation, reconciliation of the House and Senate versions of the legislation will occur. Throughout the process, the Senate side will be communicating with Barney Frank on the House side so the Senate can emerge with a bill for which reconciliation will be possible and that both houses can pass. The probable result is that the Senate bill will be skinnied down. The Democrats just have to get enough votes to clear a potential filibuster in the Senate, although the filibuster is not likely.

If legislation clears the Senate in February or March, one to two weeks is then needed to discuss the bill; the conference report needs agreement and reconciliation should be done very quickly, probably in one to two days. After reconciliation, the legislation will have to be brought back to each body for a vote, which should occur later in the year; it will probably be pre-cleared and therefore pass through quickly, once it is ready.

Questions regarding this advisory should be addressed to Guy P. Lander (212-238-8619,

Carter Ledyard & Milburn LLP uses Client Advisories to inform clients and other interested parties of noteworthy issues, decisions and legislation which may affect them or their businesses. A Client Advisory does not constitute legal advice or an opinion. This document was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. © 2020 Carter Ledyard & Milburn LLP.
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