Financial Institutions

On July 21, 2017, following last June’s announcement that the Delaware House of Representatives had passed (with near unanimity) blockchain-related provisions proposing to amend several sections of the Delaware General Corporation Law (DGCL), the Delaware Governor officially signed the legislation into law.

The newly enacted legislation provides, among other things, specific statutory authority for Delaware corporations to use “distributed electronic networks or databases,” aka distributed ledgers or blockchain technology, for the creation and maintenance of corporate records, including the corporations’ stock ledger.[2]

1. The Use of Blockchain Technology for the Creation and Administration of Corporate Records

Section 219(c) of the DGCL provides that a stock ledger of a Delaware corporation is the only evidence of the identity of stockholders of the corporation who are entitled to inspect the list of stockholders and to vote at meetings.

Until now, under current recordkeeping practice, the stock ledger of a corporation could only be created and maintained by a corporate secretary or a corporation’s transfer agent. Often, a stock ledger consists of a capitalization table, i.e., electronically encoded data on a computer program like Microsoft Excel, which is producible in printed form.
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On August 6, 2014, the UK’s financial services regulator, the Financial Conduct Authority (FCA), issued long-awaited draft guidance on the use of social media in financial promotions by regulated financial institutions.

But if financial services firms operating in the UK were hoping that this guidance would provide them with a clear framework to help jump-start their social media strategies, they will be disappointed. For one thing, the guidance is focused on financial promotions, so firms will need to continue to evaluate all of their social media activities carefully against existing FCA rules.

The proposed guidance – “GC14/6 Social media and customer communications: The FCA’s supervisory approach to financial promotions in social media” (“Guidance”) – is open for consultation until November 6, 2014. The FCA intends to continue discussions with the financial services sector during the consultation period. It has also set up the hashtag #smfca for those wishing to discuss the Guidance on Twitter.


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From our sister blog, MoFo Tech:

The Bitcoin “Cryptocurrency” has gained momentum in the market, and some businesses, including Overstock. com and TigerDirect.com, now accept bitcoins as payment. Many others are wondering if Bitcoin is a good fit for them—and they should factor regulatory uncertainty into their calculations.

In the U.S., certain companies exchanging

Another great post from our sister blog, MoFo Tech:

The potential for mobile payments is huge. So are the potential legal and regulatory hurdles.

Banks, retailers, and pundits are paying a lot of attention to mobile payments, which typically involve the use of smartphones and tablets to pay for purchases.  But a lack of mobile infrastructure has kept the use of mobile payments fairly low in the U.S.

The space is evolving quickly, however.  More infrastructure is being rolled out, while new software and cloud-based solutions are enabling payment processing without the need for a network of specialized in-store terminals.  For their part, consumers are already well equipped to take advantage of these developments.  Today, 61 percent of American consumers have smartphones or tablets, up from 48 percent last year, according to a recent study from Vantiv, a provider of payment processing strategies, and the Mercator Advisory Group, an independent research firm.

Many of these consumers are already using these devices as shopping tools—comparing in-store prices with online prices, researching products, downloading coupons, and discussing potential purchases with friends.  So it’s fair to assume that consumers will adopt mobile payments quickly as they become easier and more widespread.  By 2018, Mercator estimates, the value of mobile payments will increase sevenfold, to $362.8 million a year, up from $51.4 million today.

There’s a great deal of opportunity here.  But there’s also much to consider from a legal standpoint, because mobile payments represent the convergence of business, technology, and banking.  “You have to think about issues like the structure of the mobile payment offering, including the source and settlement of the funds to determine the applicable regulatory framework,” says Obrea Poindexter, a partner at Morrison & Foerster who leads the mobile payments group.  “There are technology issues relating to cybersecurity and authentication as well as regulatory issues, such as maintaining the privacy of consumer data and complying with anti-money laundering laws.”


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The latest issue of our Socially Aware newsletter is now available here.

In this issue of Socially Aware, our Burton Award-winning guide to the law and business of social media, we summarize the FFIEC’s recently-issued final guidance on social media use by financial institutions; we report on a new NLRB decision holding that particularly

On December 11, 2013, the Federal Financial Institutions Examination Council (FFIEC) issued final guidance for financial institutions relating to their use of social media (the “Guidance”).  With its release, the FFIEC adopts its January 2013 proposed guidance in substantially the same form.  (Socially Aware’s overview of the proposed guidance is available here.)

Today’s consumers want to engage in a new way with the companies from which they buy goods and services.  Although some UK financial services organisations are leading the way in terms of their use of social media, on the whole, engagement in social media by UK financial services firms is still relatively limited. This is

Socially Aware editor John Delaney will be speaking at the BITS Social Media Risk Management Forum on July 31, 2013, at the Four Seasons Georgetown Hotel in Washington, D.C. John will be participating in a panel discussion on social media-related business and legal risks for financial services companies, and strategies for mitigating such risks. For

Article courtesy of Morrison & Foerster’s Mobile Payments Practice

On May 30, 2013, the California Department of Financial Institutions (CADFI) issued a cease and desist letter to Bitcoin Foundation, a not-for-profit organization established to standardize, protect and promote the use and adoption of Bitcoin. CADFI stated in its letter that Bitcoin Foundation “may be engaged

FINRA, having enacted new communications rules that specifically reference electronic communications, having issued two Regulatory Notices (linked here and here) providing guidance to the securities industry on social media, and having made social media and electronic communications exam priorities in two of the last three years, is now taking the next logical step:  conducting