Our integrated, global practices are dedicated to helping clients to understand—and operate within—financial services regulations. We have a deep understanding of the financial services industry gained from many years advising investment managers, insurance and reinsurance companies, brokerages, banks and other financial services entities, in every major financial center. Many of our lawyers are former regulators or have experience as senior in-house counsel at regulated businesses. Our services include the following:
- regional knowledge and experience
- regulatory compliance and compliance-related training
- structuring regulated and unregulated businesses
- congressional investigations and legislation
- corporate governance for regulated businesses
- corporate transactions for regulated businesses (including diligence and approval of owners and controllers)
- investigations and enforcement proceedings
- insider trading and market abuse counseling
- market and trading advice
- regulator relations
- strategic planning for regulatory change
- bank capital and bank resolution and recovery regimes.
Akin Gump’s global financial regulatory practice includes lawyers resident in the United States, United Kingdom, Hong Kong and Singapore.
We routinely advise clients that are subject to regulation by the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the U.S. Department of the Treasury (Financial Crimes Enforcement Network or FinCEN and the Office of Foreign Assets Control or OFAC), self-regulatory organizations and state regulators in the United States, by the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA) in the United Kingdom and by the Securities and Futures Commission of Hong Kong (SFC).
Our U.S. lawyers include former prosecutors and regulators with extensive experience in all aspects of the federal and state securities laws, including the laws governing insider trading, market manipulation, investment adviser and broker-dealer regulation, public company accounting and financial reporting, corporate governance (including the listing standards of the New York Stock Exchange, NASDAQ Stock Market and other stock markets), public and private securities offerings, fiduciary duties and the Foreign Corrupt Practices Act. We also advise on various anti-money laundering (AML) regulations and statutes including the USA Patriot Act, the Bank Secrecy Act and the Money Laundering Control Act, as well as U.S. sanctions regulations applicable to banks.
As well as advising on the UK’s Financial Services and Markets Act 2000 (FSMA) and the rules of the PRA and FCA, our UK lawyers have significant experience advising clients on the application of European Union directives and regulations, including the Markets in Financial Instruments Directive (MiFID, MiFID II and MiFIR), the Alternative Investment Fund Managers Directive (AIFMD), the Undertakings for Collective Investments in Transferable Securities Directive (UCITS), the Capital Requirements Directive (CRD), the Capital Requirements Regulation (CRR), the Market Abuse Directive (MAD I and II) and Market Abuse Regulation (MAR), Banking Consolidation Directive (BCD), Short Selling Regulation (SSR) and the European Markets Infrastructure Regulation (EMIR).
Our lawyers in Hong Kong have extensive experience in advising clients on the Securities and Futures Ordinance, the Companies Ordinance, the Securities and Futures Ordinance Part XV – Disclosures of Interests and the Anti-Money Laundering and Counter –Terrorist Financing (Financial Institutions) Ordinance. Our lawyers in Hong Kong also regularly advise clients on the application of codes issued by the SFC including the Code of Conduct for persons Licensed or Registered with the Securities and Futures Commission, the Code on Unit Trusts and Mutual Funds, and the Fund Manager Code of Conduct and on the application of guidelines issued by the SFC. We also advise clients on U.S. economic sanctions from our Hong Kong office.
From our Singapore office, we regularly provide U.S. regulatory advice on SEC, CFTC, sanctions and other regulatory issues.
Financial services regulation affects every aspect of an authorized or licensed business. Regulated financial services businesses are subject to a broad range of detailed and complex rules including rules concerning the conduct of their businesses and their interactions with customers and counterparties, securities transactions and market conduct, governance systems and controls, capital requirements and reporting and disclosure obligations. Akin Gump’s global financial regulatory practice counsels authorized and licensed financial services businesses, helping our clients to identify and comply with the rules to which they are subject in each jurisdiction in which they operate. Our lawyers’ knowledge, depth of understanding and cross-border experience means we are well placed to help clients to survive and thrive in the web of regulation.
We help our clients to avoid regulatory pitfalls and to turn the burden of regulatory compliance into a competitive advantage. The global financial regulatory practice provides timely, pragmatic advice on the application of regulation to our clients’ businesses and assists with the structuring and design of new financial services products, the drafting and negotiation of customer and counterparty terms of business and contracts and the construction and implementation of compliance programs. Our understanding of the regulatory framework and regime within multiple jurisdictions enables us to advise clients undertaking financial services on a cross-border basis, helping them to identify and manage differences in the regulation of their businesses across the globe.
We deliver clear, insightful and high-impact compliance training to the officers and staff of financial services businesses. Our team’s in-depth understanding and familiarity with the relevant rules and regulations, the way in which they impact our clients’ businesses and the consequences of contravention, enables us to prepare highly tailored training that is of immediate relevance to the audience. As legal advisors to our clients, we are often able to use the benefit of legal privilege to facilitate frank, meaningful discussions within training sessions that enable potential problems to be identified and addressed.
Obtaining a financial services license, or seeking amendments to an existing license, can be a protracted process, requiring detailed disclosures to and discussions with the relevant regulator, particularly in the case of large, complex, high-risk or innovative businesses. Our knowledge of the regulatory framework in the United States, Europe and Asia, our relationships with key regulators, our industry knowledge and our understanding of our clients’ businesses often help facilitate the application and approval process and obtain favorable outcomes.
We help new businesses and established businesses that are expanding into new areas or jurisdictions to understand the potential application of financial services regulation and, where appropriate, to structure the business so as to take advantage of available exemptions or limitations thereby avoiding the need for registration or authorization or otherwise limiting the impact of regulation.
We also have significant experience in helping our authorized and licensed clients in negotiating and obtaining waivers or exemptions from particular regulatory rules or requirements. This often requires our lawyers to explain to the regulator why the particular requirement is inappropriate for our client’s business and to offer constructive, alternative approaches that satisfy the regulator’s objectives.
The legal proceedings involved in congressional investigations are distinct from those in any other forum, and our lawyers are experienced in managing those proceedings to protect our clients’ legal interests, both with respect to the congressional proceedings and to those in other judicial and regulatory venues. The U.S. Congress often uses the investigatory process as a precursor to legislative action. As one of Washington’s pre-eminent public law and policy advocacy firms, we are practiced and proficient in affecting the legislative process to our clients’ benefit. Headed by a former general counsel of the U.S. House of Representatives, our practice has handled a number of high-profile Congressional investigations for clients in the financial services, mortgage and lending sectors on a number of issues. We have also worked with a number of clients on investigations related to financial markets, executive compensation, corporate governance, securities and antitrust issues.
Our financial services policy team is actively engaged on a wide range of public policy matters impacting the financial services sector, including issues before the House Financial Services and the Senate Banking, Housing and Urban Affairs committees, as well as before federal agencies such as the departments of the Treasury and Housing and Urban Development (HUD), the Federal Housing Finance Agency (FHFA), the Consumer Financial Protection Bureau (CFPB), the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Securities and Exchange Commission (SEC). We have strong relationships and experience working with a number of banking- and housing-related trade associations such as the American Bankers Association, the Independent Community Bankers of America, the Financial Services Roundtable, the Mortgage Bankers Association, the National Association of Home Builders and the National Association of Realtors, as well as consumer groups that advocate on mortgage finance and housing issues. We represent international and domestic financial institutions on a range of issues, including those related to government-sponsored enterprises (GSEs), insurance companies and private mortgage insurance providers, companies with consumer finance divisions, credit rating agencies, international stock exchanges, private equity firms and hedge funds.
Financial services regulation across the globe is increasingly focused on senior management responsibility for compliance contraventions, governance systems and controls, and remuneration and incentives. Working closely with our colleagues in the firm’s corporate and labor and employment practices, Akin Gump’s global financial regulatory practice is able to assist clients in designing and implementing corporate governance systems and controls that meet the requirements and expectations of the relevant regulators.
Corporate Transactions for Regulated Businesses (including diligence and approval of owners and controllers)
Mergers and acquisitions and other corporate transactions involving regulated businesses, often require regulator consent or approval. We have significant experience in obtaining such consents and, in particular, coordinating applications in multiple jurisdictions, managing relationships with regulators so as to obtain approvals within the transaction timetable and negotiating waivers or amendments to reporting, disclosure or other requirements. Similarly, our experience is utilized in the due diligence and negotiation aspects of corporate transactions, so as to properly identify and mitigate regulatory risks associated with a particular deal.
As regulators worldwide continue to focus on controlling the trading of derivatives, market participants are required to consider how their business is affected by the onslaught of regulation applicable to derivatives transactions. We advise financial institutions (including alternative investment managers and asset managers) and corporations with respect to laws and regulations affecting derivatives trading, as well as cross-border transactions. Akin Gump’s global financial regulatory practice is able to assist clients on all aspects of derivatives transactions, including trading, disclosure and trade reporting and clearing.
Financial services regulators across the globe are increasingly aggressive in investigating and enforcing against alleged regulatory contraventions. The consequences of a successful enforcement action or conviction are very serious for individuals and business entities alike. But even if a client is able to prevail at trial, or if no charges are ever brought, there are often enormous costs. Simply being subjected to an investigation can be an ordeal—investigations tend to be expensive, protracted and stressful.
Akin Gump’s global financial regulatory practice is experienced and adept at helping clients navigate these challenges. Our team includes lawyers who have served in the enforcement divisions of the SEC and the UK’s Financial Services Authority and in the DOJ. We have successfully represented financial institutions in enforcement proceedings regarding economic sanctions and trade finance violations, including on preparing voluntary self disclosures to various state and federal regulators and enforcement agencies. We have successfully represented corporations, executives, individuals and public officials in a wide range of regulatory investigations and have conducted internal investigations for regulated businesses throughout the world. In addition, we work with clients to conduct internal investigations where activities or conduct is identified that could potentially violate laws or regulations, prior to the involvement of government regulators, to resolve findings, mitigate related risks and implement compliance enhancements to address identified risks. The deep experience and sound judgment of our lawyers results in industry-leading credibility and effectiveness in dealing with regulatory investigators.
Over the past six or seven years, one of the major trends in regulatory enforcement has been its increasingly global scope. There is a growing amount of cooperation between global financial regulators, particularly between U.S. regulators (primarily the DOJ, SEC and CFTC) and regulators in the EU, resulting in a significant increase in cross-border investigations and enforcement actions. At Akin Gump, we have ample, meaningful experience in these international matters. Our lawyers represent clients worldwide, including many non-U.S. persons and foreign business entities. We have the experience and resources to provide a seamless, integrated approach to international, cross-border investigations.
Regulators around the world continue to focus on the enforcement of insider dealing and market abuse laws. The laws themselves are, in many jurisdictions, broad in scope and are applied—in addition to equities and listed bonds—to trading in derivatives, commodities, indices and other securities. The cost of contravention of these rules can be calamitous, resulting in lengthy investigations, fines and—potentially—imprisonment and/or closure of a business. We help clients to assess, identify and, where necessary, manage and control potentially inside information; design systems and controls to prevent insider dealing and market abusive behavior; and design trading strategies that do not contravene applicable market abuse laws.
The global financial regulatory practice includes lawyers knowledgeable about the U.S. Securities Exchange Act of 1934, the Dodd-Frank Act, the EU Market Abuse Directive (MAD I and II), the EU Short Selling Regulation, the UK’s civil and criminal insider dealing and market abuse regimes. In addition, our lawyers in Hong Kong frequently advise clients on all aspects of the criminal and civil insider dealing and market abuse regimes under the Securities and Futures Ordinance, Cap. 571.
The regulation of securities transactions continues to increase in complexity and expand in scope. We routinely advise clients on the regulations and market rules that apply to the on-exchange and over-the-counter trading of securities and other negotiable instruments, including pre- and post-trade transparency and disclosure of major shareholdings and short positions.
The global financial regulatory practice also advises brokers and other businesses contemplating the establishment of a new trading venue (for example, in Europe, a new Organised Trading Facility or Systematic Internaliser, pursuant to MiFID II).
For a regulated business, maintaining positive and constructive relationships with its regulators should be paramount. Our lawyers can assist with developing regulatory communication strategies, framing responses to regulatory queries and explaining new financial products or business lines to regulators in the context of their own rules. We are also extremely experienced in helping our clients to communicate regulatory breaches to regulators, seeking to head off further regulatory action by designing and implementing steps to rectify any potential harm and prevent future contraventions.
As the world emerges from the financial crisis, financial regulation is in a period of continuing development and change. The perimeter of financial services regulation continues to expand. Business lines that were not previously subject to regulation—such as commodities or energy trading—are increasingly falling within the scope of financial services regulation for the first time.
The lawyers in Akin Gump’s global financial regulatory practice are at the forefront of this regulatory change. We have helped our clients to understand and prepare for the implementation of new regulatory initiatives, including the Dodd-Frank Act, AIFMD and MiFID II.
We continue to advise clients on early stage legislative proposals and, where appropriate, assist our clients in preparing expert responses to consultation papers and requests for evidence.
We advise investors in par or distressed bank capital instruments, including advising on the purchase of bank capital instruments (including advising on private placements of Core Equity Tier 1, Additional Tier 1 and Tier 2 instruments issued pre-IPO by new entrants into the European banking market); advising on the regulatory framework which determines the characteristics of bank capital instruments under Basel III and, for banks incorporated in a member state of the European Union, the CRD and the CRR; advising on liability management exercises by banks adjusting their capital structures consequent on the global financial crisis and the Basel III/CRD IV initiatives; and advising on strategic investment strategies deriving from various legacy Basel II hybrid capital structures. Members of the Global Financial Regulatory group and our Financial Restructuring Group have also advised on the implementation of and potential impact of the EU Bank Resolution and Recovery Directive (BRRD), which was passed by the EU in 2014 and is in the process of being implemented by the member states of the European Union. The BRRD has significant implications for investors in bank debt (senior and subordinated) as well as investors in bank regulatory capital instruments issued by EU credit institutions and financial institutions.