Financial Institutions Regulation

Keeping Our Clients Ahead in an Ever-Changing Regulatory Environment.

Operating at the forefront of the ever-changing regulatory environment of the financial industry, Milbank's Financial Institutions Regulation Group provides time-sensitive regulatory advice and counseling to some of the largest financial institutions in the US and abroad. We advise a broad cross-section of regulated entities, from domestic and foreign investment and commercial banks and their holding companies, to broker-dealers and market centers to private funds and their advisers and managers. Our financial institutions regulation advisory practice complements our regulatory enforcement and investigations work and white-collar crime practices.

Our attorneys have mastered the intricacies of the Dodd–Frank Wall Street Reform and Consumer Protection Act and the numerous proposed and expected regulations that will affect the operations of our clients that are active in sponsoring investment funds, in structuring complex securitization vehicles and in trading derivatives. We work closely with our Corporate and M&A Groups in assisting fund investors in taking stakes in distressed banking institutions. We also work with our Financial Restructuring Group, navigating the differences between bankruptcy and insolvency regimes to determine the consequences for institutions and their creditors. We are also conversant in “street practice” and are able to tailor our integrated knowledge for real-world application.

regulatory expertise

Our Financial Institutions Regulation Group is composed of approximately a dozen lawyers, including five partners, who currently provide the regulatory expertise that supports this practice in areas that include the regulation of:

• Foreign and domestic banks
• Non-bank subsidiaries of foreign and domestic  banks
• Broker-dealers
• Investment advisers and other asset managers
• Private equity and hedge funds
• Trust companies
• Commercial and other finance companies

The Design and Structuring of New Products and Services

Our Financial Institutions Regulation lawyers regularly advise clients on the structuring of complex and novel financing products, such as cross-border tax-driven trades, complex derivatives, novel securitizations and tax-advantaged project finance transactions. Issues typically raised by these products include whether they require prior regulatory approval or filings, whether they have positive or negative capital consequences, whether they involve restrictions on transactions with affiliates, lending limits, anti-tying or other regulatory constraints and how they will be viewed on examination. Our knowledge of regulatory guidance and precedent, our ability to judge when regulators need to be consulted and our relationships with key staff at the major regulatory agencies allow us to help clients assess the regulatory risk associated with these products.

Regulatory and Compliance Advice; Investigations, Examinations and Enforcement Proceedings

We represent major US and foreign broker-dealers, investment advisers and investment partnerships in connection with a broad range of regulatory issues and with enforcement investigations and proceedings brought by the Securities and Exchange Commission and self-regulatory organizations. We also advise broker-dealers on complex sales and trading issues affecting the equities, fixed income, derivatives and foreign exchange markets, including:

• Equity and fixed income trading practices
• Market structure and order handling issues
• Foreign exchange regulatory issues
• Commission sharing and directed brokerage programs
• Short sales and operational compliance
• High-frequency trading and other market-making obligations
• Capital markets issues
• Research practices

Our Financial Institutions Regulation lawyers also assist our bank, broker-dealer and investment adviser clients in designing and implementing compliance regimes to govern their activities, including drafting and reviewing policies, procedures and internal controls covering such activities as:

• Complex structured financial transactions
• Trading practices
• Information flow between trading desks
• Insider trading
• Underwriting and private placement activities
• Privacy
• Office of Foreign Assets Control sanctions
• Export controls
• Compliance with the Bank Secrecy Act of 1970, the USA PATRIOT Act and the Foreign Corrupt Practices Act of 1977

Obtaining Regulatory Approvals and Formal Interpretive Guidance

We have represented foreign and domestic banking institutions in securing approvals of a number of high-profile strategic acquisitions. Lawyers in our Financial Institutions Regulation Group have represented investment funds on numerous investments in distressed bank and thrift-holding companies that have required prior regulatory approvals from such agencies as the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation and a variety of state banking authorities. We have represented clients before the SEC and the Financial Industry Regulatory Authority in connection with acquisition of, investment in and formation of, broker-dealers. On behalf of our clients, we have obtained numerous formal and informal approvals, staff opinions and no-action letters, including several that have significantly expanded the law governing the activities of our clients.