Category: U.S. Business Law
Why Are Foreign Investments in Domestic Energy Projects Now Under CFIUS Scrutiny?
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Stephen Heifetz & Michael Gershberg: CFIUS now actively reviews and sometimes alters transactions that result in foreign control of U.S. energy companies. There are three primary drivers behind this recent scrutiny.
The Federal Reserve’s Supporting Role Behind Dodd-Frank’s Clearinghouse Reforms
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Colleen Baker: Although largely overlooked, failures in PCS systems both domestically and internationally exacerbated the financial crisis of 2008. The Federal Reserve’s critical and significant role in responding to some of these disruptions has similarly been largely overlooked.
Unreasonable Delays: CFIUS Reviews of Energy Transactions
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Joshua C. Zive: Unfortunately, delays and burdens associated with CFIUS are playing an increasingly significant and frustrating role in energy transactions. These delays frustrate the intended role of CFIUS review and make it unnecessarily difficult for energy transactions to be designed and executed in an efficient manner.
Clearinghouse Hope or Hype? Why Mandatory Clearing May Fail to Contain Systemic Risk
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Sean J. Griffith: Clearinghouses may not be the last and best solution to the problem of systemic risk and that further regulatory experimentation may be desirable. Policy-makers should strive instead for a structure that fosters diversity and experimentation.
Margin Costs of OTC Swap Clearing Rules
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Watterson, Suh & Stein: Clearing requirements affect margin requirements, a key mechanism used to mitigate counterparty risk. New clearing rules may substantially costs for users of cleared derivatives because of the higher margin delivery requirements applicable to such transactions.
Regulation of Cross-Border Swaps
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David Felsenthal & Lily Chu: We do not believe that there is any simple, one size-fits-all remedy for regulation of cross-border swaps. We propose therefore that each transaction-level requirement be considered separately, and that specific rules be adopted for each type of transaction-level requirement.
Credit Default Swaps: Dubious Instruments
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Charles W. Murdock: Derivatives and other “innovative” financial instruments such as CDOs and synthetic CDOs were largely responsible for the collapse of the economy in 2008. There is little justification for the existence of CDSs and especially naked CDSs. The issue raised CDSs need to be examined in light of how they add or detract from our overall long-term prosperity.
Deterring Disruption in the Derivatives Markets
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Matthew Kluchenek & Jacob Kahn: Dodd-Frank Act amendeded section 4c(a) of the CEA to add three types of prohibited transactions deemed to be “disruptive of fair and equitable trading.” Market participants in the ever-growing commodities and swaps markets should not take comfort in the CFTC's delay in filing suit.
Toward an Economic Model for the Taxation of Derivatives and Other Financial Instruments
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David S. Miller: On January 24, the Chairman of the House Ways and Means Committee, released the discussion draft of a bill that would tax derivatives under a mark-to-market system of taxation. This proposal would replace our entire federal system of taxing derivatives with a radically different but infinitely simpler model that would finally correspond to economic reality.
From Reaction to Prevention: Product Approval as a Model of Derivatives Regulation
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Saule T. Omarova: This article outlines the contours of a regulatory scheme based on mandatory pre-market government licensing of complex financial instruments, including derivatives. This model of product approval regulation explicitly aims to control the amount and types of risk being introduced into the financial system.
The Private Role in Public Fracturing Disclosure and Regulation
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Hannah J. Wiseman: Public concerns have often focused on the chemicals used in the fracturing process, yet federal regulations requiring disclosure of chemicals are weak. Industry—along with state regulators—developed a website that enabled chemical disclosure...
Sixth Circuit Pushes Back on EPA Oil and Gas Source Aggregation Under the Clean Air Act
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William Bumpers & Paulina Williams: On August 7, 2012, the Sixth Circuit issued an opinion that has significant Clean Air Act regulatory implications for oil and gas development projects...
