Federal Securities: Dodd-Frank Act of 2010 Flashcards Preview

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Flashcards in Federal Securities: Dodd-Frank Act of 2010 Deck (3)
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1

Federal Securities
Dodd-Frank

- impact on accounting is relatively minor
Goal: strengthen financial market performance by improving financial institutions accountability and transparency, and protecting consumers from abusive practices.
1. creates Financial Stability Oversight Council
- prevent big institutions from failing. Can require to hold extra reserves
- bank holding companies with $50 billion in assets
2. limitations on trading by banks and their support of hedge funds
3. increased transparency in OTC markets & clearing houses cannot be controlled by banks
4. requires SEC registration of hedge funds
5. protect customers from a range of fraudulent and predatory practices

2

Federal Securities
Dodd-Frank
Other

- whistle-blower provisions
- whistle-blower protection
- punish insider trading
- increase shareholder access to proxy process
- requires companies to create mandatory clawback systems for executive pay whether or not fraud is a factor
- amends SOX to make permanent exclusion from SOX smaller firms with less than $75M market capitalization
- authorized SEC to punish those who aid and abet securities fraud
- new federal insurance regulator
- require pension funds to buy investment grade securities
- require FED to direct publicly traded non-bank financial institutions with at lease $10 billion in assets to create separate "risk committee" of board
- Increase SEC's ability to punish bad guys

3

Federal Securities
Dodd-Frank
Impact on Accountants

- increase SEC and PCAOB ability to get foreign audit workpapers
- requiring firms to get agreements to get foreign worklpapers
- confidentiality provisions to get foreign workpapers
- monitor auditors of nonpublic broker dealers
- move 2,000 investment advisers to state regulation
- eliminate private adviser exemption, now must register under SEC

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