Second Treasury Report on Changes to Dodd-Frank

In response to Executive Order 13772 on Core Principles for Regulating the U.S. Financial System, February 3, 2017, the U.S. Treasury (the “Treasury”) issued its second report on October 6, 2017, entitled “A Financial System that Creates Economic Opportunities:  Capital Markets” (the “Report”). after the first report on banks and credit unions was released in June.  The second lengthy report generally recommends, not surprisingly, that regulation of the industry be relaxed.  Among other things, the Report recommends that public company disclosures required currently be reduced or repealed.  The Report finds that the current rules penalize securitizations and recommends that these rules be relaxed as well.  It also recommends that the crowdfunding rules be relaxed, for example by raising the offering limitation from $1 million to $5 million.  The Report decries securities litigation costs, and recommends studying ways to reduce them, for example by an increasing reliance on arbitration.  Two additional reports are expected, (i) on asset management and insurance and (ii) on FinTech and other non-bank financial services companies.