Financial Bulletin

Related documents

•   The FASB's 'practical' solution for measuring fair value of alternative investments

  The FASB issued Accounting Standards Update (ASU) 2009-12 on Sept. 30, 2009, which amends FASB Accounting Standards Codification Topic (TM) ASC 820, Fair Value Measurements and Disclosures (formerly FASB Statement 157, Fair Value Measurements), and provides a practical expedient for measuring the fair value of certain alternative investments that do not have a quoted market price, but calculate net asset value (NAV) per share.

•   House passes carried (profits) interest legislation

  On Dec. 9, 2009, the U.S. House of Representatives passed legislation containing a carried interest provision as a revenue offset to a number of expiring tax provisions, including the research credit. The carried interest provision generally would cause income attributable to carried (or profits) interests to be taxable at ordinary income rates (as opposed to capital gains rates) and subject to self-employment taxes in the case of income reported by an individual. The legislation would be effective for dispositions of partnership interests and partnership distributions occurring after Dec. 31, 2009 - regardless of when the interest was originally granted.

•   FIN 48 for investment funds

  FIN 48 is effective for private investment funds that have not yet adopted FIN 48 for years beginning after Dec. 15, 2008. For nonpublic funds with Dec. 31 year-ends, FIN 48 should be adopted for the year ended Dec. 31, 2009, with any impact reflected in the first Net Asset Value calculation of the year. Learn more about FIN 48, evaluating tax positions, pass-through entities, investment partnership application and developing a work plan.

•   SEC takes action to protect against abusive short sales

  This bulletin outlines the SEC's decision to make permanent Rule 204, which requires broker-dealers to promptly purchase or borrow securities to deliver on a short sale.

•   CFTC proposes adjusted net capital increase

  The Commodity Futures Trading Commission has proposed to increase minimum adjusted net capital requirements for futures commission merchants and introducing brokers.

•   What you need to know about TALF

  As the government has created programs to help spur economic recovery, a central question for firms has been: Is it worth it? With the addition of commercial mortgage-backed securities and insurance premium finance loans as collateral in June, participation in the Troubled Asset-Backed Securities Loan Facility (TALF) is expected to increase. Learn more about the TALF, its criteria, benefits and drawbacks.

•   New charge imposed on failed Treasury postitions

  The SEC has approved a rule that will impose a charge on failed Treasury positions, effective on May 1, 2009. This rule is part of the Treasury Markets Practices Group's (TMPG) efforts to address the ongoing settlement failures in treasury securities transactions.

•   Broker-dealers face assessment fee hike from SIPC

  The Securities Investor Protection Corporation (SIPC) will reinstitute member brokerage firm assessments at .25 percent of net operating revenue, effective April 1, 2009. This new rate replaces the existing flat $150 annual fee. The SIPC raised the assessment to bolster investor confidence and build reserves.

•   The Obama budget includes a trillion dollars in tax increases for wealthy individuals and business owners

  The Obama administration is proposing to raise taxes on high-income taxpayers by almost a trillion dollars. The proposed tax increases were included in the budget blueprint unveiled by President Obama in February. The Obama budget follows through on his campaign pledge to roll back the Bush tax cuts for high-income taxpayers, but also includes a new proposal to limit itemized deductions for things like mortgage interest and charitable contributions

•   IRS provides guidance for claiming Madoff-related theft losses

  The IRS has issued guidance that provides the victims of the Madoff investment fraud with clarified tax rules and a new safe harbor to claim their theft losses. Although the new releases (Rev. Rul. 2009-9 and Rev. Proc. 2009-20) were crafted especially to provide guidance for the many investors directly impacted by the Madoff scandal, they also apply to victims of any criminally fraudulent investment arrangements that take the form of "Ponzi" schemes.

•   Mark-to-market: The SEC's findings and recommendations

  As part of the Emergency Economic Stabilization Act of 2008, the SEC, along with the Federal Reserve and the Secretary of the Treasury, was required to submit a report to Congress about mark-to-market accounting standards to address six key areas, including fair value standards’ impact on last year’s bank failures, the quality of information they provide to investors and whether Statement of Financial Accounting Standards (FAS) No. 157, Fair Value Measurements, needs to be modified. Read on for a summary of the 211-page report’s findings and recommendations.

•   Clearing broker-dealers face stricter Customer Identification Program rules

  A section of the USA Patriot Act, the Customer Identification Program (CIP) aims to help prevent and detect international money laundering and the financing of terrorism. Previously, the Financial Crimes Enforcement Network (FinCEN) allowed clearing broker-dealers to share in CIP responsibilities with introducing broker-dealers. However, a recent Office of Foreign Assets Control (OFAC) guideline has prohibited the reallocation of this legal responsibility to a third party.

•   How to survive the credit crunch

  What can you do to survive the credit crunch? As the credit crunch continues to impact the economy, Grant Thornton has provided a guide that explains the recent financial events, assesses how these events affect typical businesses and includes a 10-point checklist of fundamental, proactive steps for you to consider as you navigate through this challenging time

•   Congress approves financial bailout, AMT relief and extenders

  The House and Senate have both passed H. R. 1424, combining the Emergency Economic Stabilization Act with legislation that will patch the alternative minimum tax for 2008, extend key expiring and expired tax provisions through 2009 and enhance and extend a number of renewable energy incentives.

•   Deferred compensation: Is your fund ready?

  By Dec. 31, 2008, fund managers must bring compensation-based arrangements into full compliance with the requirements of Code Section 409A.

•   SEC proposes 'naked' short selling anti-fraud rule

  The Securities and Exchange Commission (SEC) has proposed Rule 10b-21, which would classify abusive "naked" short selling as fraud in an effort to safeguard investors and protect the integrity of the markets.