Financial Institutions Advisory & Financial Regulatory

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Shearman & Sterling’s market-leading financial regulatory practice serves our clients' businesses in the U.S., U.K., EU, the Middle East, Asia and globally. This focus on regulatory activity across geographies and the excellence of our U.S., U.K. and European practices in particular make us the international counsel of choice for clients with difficult regulatory challenges in their home jurisdictions that are also seeking to meet global best practices. Backed by clear technical advice and strong relationships with regulators, we advise clients on the laws and regulations of the world’s key financial and commercial centers.

Leveraging our deep regulatory knowledge and global capabilities, we help clients cultivate relationships with regulators, deliver innovative solutions to increasingly complex regulatory issues, as well as make the most of opportunities presented by regulatory reform initiatives and market developments. Our clients include many of the major global banks and large financial institutions, bank holding companies, broker-dealers, investment firms, insurance and reinsurance companies, exchanges, fund managers, SEFs/MTFs, clearing and settlement providers, and payment service providers.

With a global presence matching that of many of our clients, our multi-jurisdictional practice allows us to provide seamless coverage. We work on international and complex cross-border, first-in-kind regulatory and compliance matters and transactions. Our clients value our insights on how local initiatives fit into the global regulatory architecture.

Our practice covers a wide range of financial regulatory reforms, day-to-day regulatory/compliance issues, transactional structures, trading and markets issues, regulatory investigations and enforcement proceedings. We have extensive experience advising on bank regulation, bank insolvency, recovery and resolution planning and corporate governance, bank capital markets transactions, including Dodd-Frank implementation, related rulemaking (such as the Volcker Rule), EU legislation (such as EMIR, MiFID II and CRD IV) and international initiatives.

Our lawyers are at the forefront of issues related to Brexit and the changing regulatory landscape in the U.S., keeping our clients informed of these important developments.

Several lawyers in the group have previously held prominent positions in key regulatory authorities worldwide, including the U.K.’s FSA (now the FCA and PRA), the SEC, the Board of Governors of the Federal Reserve System and various European and Asian regulatory agencies.

 
US Bank Regulation 

Our clients look to us for high-quality U.S. bank regulatory advice rooted in our longstanding ties with regulators, as well as for the integrated solutions we provide by drawing upon our strength in related practice areas. With decades of experience, we advise U.S. banks and banks established elsewhere with operations in the United States on day-to-day regulatory issues, regulatory reform implementation, and examination and enforcement issues.

We advise clients on a broad range of financial reform-related matters as well as transactional work and are in touch with regulators on a regular basis. This relationship and credibility with regulators facilitates our clients’ compliance with regulatory requirements and helps them plan for anticipated regulatory changes. Several of our lawyers have held prominent positions at key U.S. regulatory authorities. In addition, we work closely with colleagues in our Litigation practice, many of whom have held prominent positions at the U.S. Department of Justice, the SEC and other regulators.

The cumulative effect of our bench strength, long history, relationships and experience has made us one of the most sought-after advisors by financial institutions.

Broker-Dealer 

Serving clients’ retail and institutional businesses in the U.S., U.K., EU and globally, Shearman & Sterling’s Broker-Dealer team offers a comprehensive and multi-jurisdictional service attuned to the needs of our clients and the international regulatory landscape. Harnessing the deep experience of our lawyers, we represent many of the world’s leading broker-dealers and investment firms as well as other market participants, including trading platforms, settlement systems and clearing houses.

Advising on the full range of securities regulatory issues, we continually monitor pending regulatory and legislative proposals to keep our clients well-positioned and well-informed. We provide day-to-day advice on all the operations and challenges facing our clients, including licensing, capital requirements, trading issues, sales practices, research, inducements, client classification, handling regulatory examinations, anti-money laundering and regulatory investigations, examinations and enforcement matters.

We have unparalleled experience in the formation and registration of broker-dealers and investment firms across the U.S. and Europe. Clients turn to us for advice on the structure and timing of expansions and reorganizations, cross-border service provision and third-country access, including obtaining regulatory approvals.

Our broker-dealer clientele includes all forms of broker-dealers and broker-dealer and investment banking businesses: retail, institutional trading (equity and fixed-income), prime brokerage, research distribution, investment banking advisory, capital markets, private placement advisory, ATSs, MTFs, OTFs, market makers and interdealer brokers.

Clients particularly appreciate our Online Broker-Dealer Library, which houses a comprehensive set of both recent and historical client publications, organized by topic and date.

UK & EU Regulation 

Banks, investment firms, asset managers, brokers, trading venues, clearing houses, settlement systems, payment institutions, insurers, reinsurers and others under the EU’s financial regulatory remit turn to Shearman & Sterling to advise them on the laws and regulations of the wholesale and retail markets in the United Kingdom and European Union. Clients value the broad experience of our practitioners and the comprehensive coverage we provide on all aspects of financial regulation affecting their businesses.

We provide strategic advice on national and cross-border acquisitions and sales, capital raisings, group structuring, governance, resolution planning, outsourcing, expansions and reorganizations, as well as cross-border service provision and third-country access. In addition, we advise on day-to-day legal risk management, including regulatory authorization and change in control, prudential requirements, sales and trading practices, conduct issues, compliance support, market abuse, KYC and anti-money laundering, inducements, client classification and data protection.

Because of the strong relationships of trust we have built with regulators and clients around the world, we can assist clients in presenting valid concerns to these officials. We also help clients navigate some of the most time-pressured and sensitive regulatory investigations, reviews and enforcement matters.

We work closely with industry bodies, including ISDA, FIA and the FMLC, to cultivate market responses to regulatory developments and recommend solutions to address legal uncertainty. By monitoring legislative proposals, we stay abreast of industry guidance and market developments and use this knowledge to keep our clients ahead of regulatory trends, helping them anticipate and plan for regulatory change.

Bank Recovery & Resolution 

Banks, creditors and other financial market participants look to Shearman & Sterling for their most critical resolution and recovery issues, including planning for resolution, restructuring and recapitalization.

We provide real-time strategic advice to our clients on:

  • Developing credible resolution plans and on their resolution plan submissions to regulators
  • Legal entity structural changes, recapitalizations and capital raisings
  • Implementing and complying with TLAC requirements
  • Strategic business and governance decisions related to firms’ global resolution strategies
  • The implications of "bail-in" as a resolution tool
  • Investors, on their investments in distressed banks
  • Bankruptcy law, insolvency law and bank resolution issues

Recognizing that recovery and resolution requirements often need to meet requirements across jurisdictions, we bring together industry-leading experience from around the globe in financial regulation, State aid, restructuring, litigation, bank finance and capital markets.

We also work with principal trade organizations on comment letters, such as the proposed regulations related to living wills and the Orderly Liquidation Authority and the Financial Stability Board’s proposal on key attributes of effective resolution regimes.

Legislative Process & Legislative Drafting 

Relying on our deep understanding of the statutory and regulatory framework in which the financial services industry operates, as well as our constant connectivity to regulators, our clients turn to us for advice on:

  • the global impact of new laws and regulations;
  • assistance with responses to consultations on legislative proposals; and
  • insights on legislative lobbying

We also collaborate with the main market associations, such as SIFMA, the FMLC and ISDA, on many of the proposed changes to legal and regulatory obligations, highlighting conflicts and legal uncertainty issues arising across jurisdictions.

Our award-winning team of lawyers is often called on to counsel governments on creating new regulatory frameworks or reforming their existing framework. Much of our work in this area requires an unprecedented level of interdisciplinary cooperation and coordination. We provide strategic policy advice and draft the supporting legislation to establish world-class legal and regulatory regimes which reflect the international standards, sophistication and certainty found in leading financial centers.

Financial Market Infrastructure Regulation 

Shearman & Sterling's representation of exchanges and other trading venues, clearing and settlement systems, trade repositories and payment systems extends back many years and, for some institutions, includes and relates to their inception. We advise many of the main institutions internationally on their domestic and cross-border businesses.

Regulatory requirements and change are critical to our clients' businesses and clients rely on us to assist them in navigating the complex and evolving regulatory environment on a multi-jurisdictional basis. We use our innovative thinking and ability to achieve results that are often thought impossible.

Our advice covers:

  • Cybersecurity preparedness and incident response
  • Data governance 
  • Establishment of new businesses and new products
  • Global impact of new laws and regulations and any extraterritoriality implications
  • Intra-group services agreements
  • Implementation of and compliance with AML/CTF, bribery and foreign corrupt practices legislation
  • Implementation of and compliance with regulatory requirements under U.S., U.K. and EU laws, in particular, Dodd-Frank, EMIR and MiFID II
  • Insights on legislative lobbying and responses to consultations
  • Obtaining recognized status from U.S., U.K. and EU authorities as well as other regulatory approvals – worldwide
  • Recovery and resolution planning
  • Regulatory perimeter issues
  • Relationships with other service providers
  • Segregation and portability
  • Structure and development of participant rules and membership documentation

We are involved in many industry working groups where we assess areas of legal uncertainty and the resulting issues arising for the practical implementation of new rules and regulations. Our lawyers are also often invited to speak at industry events, including the ISDA and FIA conferences.