The Our Perspectives Newsletter provides insights on legal, regulatory, economic and public policy issues affecting the global financial services industry. This edition summarizes some of the most recent developments that might be of interest.
Second Payment Services Directive (PSD2) and the General Data Protection Regulation (GDPR) – Payments and Consent for Data Sharing
By Andreas Fillmann
PSD2 addressed new rules for payment services or third-party payment service providers – particularly account information service providers and payment initiation service providers. Under PSD2, traditional payment service providers will need to share certain data that will constitute personal data in the sense of the GDPR, resulting in conflicts between the two set of rules. Several uncertainties remain.
No-Deal Brexit and Contemplated German Temporary Permissions Scheme for Banks, Insurers and Financial Services Providers
By Jens Rinze and Andreas Fillmann
The EU Commission has concluded that in case of no deal, entities headquartered in the UK providing banking services or insurance services will no longer be allowed to provide services in the EU on the basis of their current authorizations. In response, on December 12, 2018, the German government proposed unilateral domestic German legislation.
SEC Solicits Public Comment on Earnings Releases and Quarterly Reports
By Aaron Seamon
On December 18, 2018, the Securities and Exchange Commission (SEC) issued a Request for Comment on Earnings Releases and Quarterly Reports, the culmination of recent comments from Chairman Clayton indicating the SEC’s willingness to look at the nature and timing of disclosures and follows comments earlier in 2018 from President Trump suggesting that the SEC should stop quarterly reporting and move to a six-month system.
Consumer Financial Contracts and the Transition from LIBOR
By James Sivon
US and UK financial authorities have signaled that the London Interbank Offer Rate (LIBOR) is likely to be discontinued as of 2021. Since 95% of all financial contracts that reference LIBOR are derivatives and LIBOR is a reference rate for some US$1.3 trillion in mortgages and other consumer financial contracts issued in the US the transition to some new reference rate poses reputational and legal challenges and deserves greater attention.
2018 Election Results and US State Insurance Commissioners
By Mary Jo Hudson
The 2018 elections signaled potential changes in leadership in a number of US state insurance departments. Some of those changes are beginning to take shape as new governors take office. New commissioner appointments have been announced in Arizona, Colorado, Hawaii, Minnesota and Wisconsin and announcements are awaited from new governors in several states.
SEC Operational Status During US Government Shutdown
By Aaron Seamon
As most public reporting companies are aware, during the current government shutdown the SEC is operating with limited staff members available. The SEC’s Plan of Operations, posted to its website, provides guidance on the SEC’s plans for operations during a shutdown. The SEC does have a limited number of staff available and can respond to emergency situations.
Economic Commentary and Analysis
By Bill Longbrake, guest author and Executive-in-Residence at the University of Maryland Robert H. Smith School of Business
Longbrake Letter – 2018 – Final Assessment
2018 turned out to be a better year in the US, on balance, than expected, but at year end, along with stock market turmoil, there were nascent signs that the economic growth was slowing. Globally, most economies had a very good year with many growing above full potential; however, sharp deceleration in growth became evident in most during the second half of the year. In this “Final Assessment,” Bill Longbrake evaluates the accuracy of original 2018 forecasts for the US and global economies and comments on risks to the 2018 outlook, some of which were realized during the year.
Longbrake Letter – 2019 Outlook – January Assessment
In this 2019 outlook, Bill Longbrake describes expected economic outcomes for the US and global economies during 2019. He also summarizes risks to the outlook, most of which are negative. While most analysts expect another good year, but somewhat slower growth, recession risks are rising.
Longbrake Letter – January 2019 Commentary
In January’s economic commentary, Bill Longbrake places the US economy on recession watch. Conditions are developing that could lead to recession in the next few months, but those conditions could evolve in ways that keep the US economy on firm footing for a long time to come. Bill examines those risks. He then shows simulations of what could happen to key economic measures, if a recession occurred starting in the fourth quarter.