Rating Agency Developments - March 25, 2019

The SEC has granted petitions for review of Nasdaq's $5 million MVLS listing standard, keeping the controversial rule on hold while extending the review period for NYSE American's similar market capitalization requirement. Microcap companies trading near these thresholds face potential delisting consequences if these proposed rule changes are ultimately approved, making it critical to understand the compliance strategies and ongoing regulatory developments.

The SEC is proposing to substantively overhaul the securities transfer agent regulatory framework, which has largely remained unchanged since the paperwork-based system of the mid-1970s.

The U.S. Small Business Administration has set new annual fee rates for Small Business Investment Companies' debentures for fiscal year 2027, with standard debentures at 0.3000% and accrual debentures at 0.8710%. These fees apply to any SBIC receiving debenture commitments between October 1, 2026 and September 30, 2027, regardless of when the debentures are actually drawn.

Financial services firms, healthcare organizations, and businesses across industries are investing heavily in AI and data analytics, yet many struggle to translate these investments into measurable returns. The gap between AI ambition and execution often begins with governance, workforce readiness, and the ability to turn insights into actionable business outcomes.

FinCEN has renewed its Geographic Targeting Order for Minnesota, extending enhanced reporting requirements for financial institutions in Hennepin and Ramsey Counties through February 2027. The order mandates detailed recordkeeping for international fund transfers of $3,000 or more, with exemptions for certain lower-risk transactions. What are the compliance implications for banks and money services businesses operating in these jurisdictions?

The SEC's Division of Examinations has identified six critical areas where investment advisers commonly fall short in their annual compliance reviews, from timing failures to inadequate documentation and unimplemented corrective actions. Understanding these deficiencies is essential for advisers seeking to strengthen their compliance infrastructure and avoid examination risks.

The federal banking agencies have proposed new third-party risk management guidance that is more prescriptive than its emphasis on a “risk-based” approach might suggest. In addition to calling for risk-based oversight, the proposal identifies specific elements that banks should address in board-approved policies and throughout the life cycle of third-party relationships, including due diligence, contracting, ongoing monitoring, documentation, remediation, and termination.

Forget what you thought you knew about startup funding. According to Crunchbase, billion-dollar rounds have moved from anomaly to expectation. In the first half of 2026, 60% of global startup funding flowed to rounds of $1 billion or more — and in the U.S., that figure jumped to a staggering 73%.

Federal banking regulators have proposed new interagency guidance that fundamentally reshapes how financial institutions should manage third-party relationships, moving away from process-driven oversight toward risk-based assessments tailored to actual harm potential. The proposal emphasizes that banks should focus resources on relationships presenting genuine financial, operational, or compliance risks rather than applying uniform heightened standards across all vendor arrangements.

The U.S. Senate's failed cloture vote on the Digital Asset Market Clarity Act has prompted a flurry of regulatory activity from federal agencies seeking to establish frameworks for cryptocurrency markets. In response, the SEC issued groundbreaking exemptions for tokenized securities trading, the CFTC extended relief to crypto wallet providers, and Congress advanced new tax legislation for digital assets.