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Monday, October 5 · Lead SEC asks whether more professional credentials should qualify accredited investors The SEC published five notices on October 5 asking whether more professional credentials should qualify an individual as an accredited investor, the status that admits a person to private company deals plus private fund offerings. The candidates are the Certified Financial Planner certification, the Chartered Financial Analyst charter, a U.S. certified public accountant license, three FINRA licenses (Series 79, 86, 87) plus passage of an accredited investor exam FINRA would develop. The SEC counts about $400 billion raised in Regulation D offerings, excluding pooled funds, between July 1, 2024 and June 30, 2025; it has proposed no rule. Comments close December 4. | ▸ | Interval funds, same day: The SEC also proposed on October 5 to amend Rule 23c-3 for interval funds, the registered closed-end funds and business development companies (BDCs) that make periodic repurchase offers at net asset value. The proposal would loosen the timing and frequency of those offers; it would also let more closed-end funds issue multiple share classes, relief the SEC has so far granted case by case. One such request, from SLR Secured Lending Partners and SLR Secured Specialty Lending Fund, was noticed the same day, with hearing requests due October 26. Comments on the proposal close December 4. |
| ▸ | Where it reaches a bank: Banks with private banking, wealth or trust businesses, or that sponsor private offerings, sit on the distribution side of both dockets; credential-based status would widen the pool of buyers for private products without regard to income or net worth thresholds. The five notices request comment; none is a proposed rule. No designation takes effect without a final SEC order. |
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REGULATORY DEVELOPMENTS Treasury opened the comment clock on cutting the A7 Network's sub-agents out of U.S. transfers; reporting on ICBA's case against the OCC now says what the suit attacks. Nasdaq, meanwhile, rewrote who answers for overnight equity trades. | ▸ | A7 sub-agents, clock running: FinCEN's proposed special measure, announced October 1, published in the Federal Register on October 5 with comments due November 4, 2026. It would bar covered financial institutions from transmitting funds in transactions involving any company outside the United States that the A7 Network controls, a network OFAC designated a transnational criminal organization on October 1 for sanctions evasion plus money laundering tied to Russia, Iran and the Islamic Revolutionary Guard Corps (IRGC). Banks whose correspondent or remittance flows could touch sub-agents that payment messages may not name should put identification problems on the record. No compliance date exists until FinCEN finalizes. |
| ▸ | ICBA's theory, in more detail: Law360 reported Monday that the Independent Community Bankers of America's suit, filed October 2, argues that the rule underpinning the OCC's crypto trust charter approvals exceeds the agency's authority, and that the OCC ran roughshod over commenters' concerns. That aims the challenge at the rule itself, not only at decisions such as the OCC's September 18 approvals for Bastion, Catena or Agora; other coverage has the trade group calling the charters a backdoor into banking. Reporting still names no court or requested relief. |
| ▸ | Overnight equities, clearing paperwork: Nasdaq amended Equity 2, Section 9, in a rule change filed September 28 with immediate effect that the SEC noticed October 5, so a clearing member must now affirm in writing that it assumes responsibility for clearing and settling every Night Session trade by a member that designates it. The Night Session runs from 9 p.m. to 4 a.m., Sunday through Thursday; MIAX PEARL separately fixed the reference prices its risk controls use as other exchanges move to 23-hour, five-day trading. A letter of guarantee or consent qualifies. |
INDUSTRY AND AI SIGNALS | ▸ | Long yields, a weaker euro: The 10-year Treasury yield was little changed early Monday at 5.29 percent, after a Friday close of 5.28 percent; the 2-year was 4.82 percent. The euro slid to a 17-month low against the dollar, which the Financial Times tied to high energy prices plus concerns over France's public finances; Bloomberg reported that Europe's bond selloff has revived memories of the region's earlier debt crisis. Standard Chartered expects the Fed to raise rates another 50 basis points before mid-2027, with a possible pivot to cuts in the second half of that year. The high-yield spread, the premium risky borrowers pay over Treasuries, widened about 12 basis points. It now stands at 3.24 percentage points. |
| ▸ | China's bank cull: China has closed nearly 25 percent of its banks in a state-driven consolidation meant to bolster its financial system, the Financial Times and PYMNTS reported. For banks with correspondent relationships or counterparty exposure to Chinese lenders, the closures change who sits on the other side of those accounts; the scale of the push is also a read on stress among the country's smaller institutions. |
| ▸ | Stablecoin plumbing, outside the banks: S&P Global Ratings launched a Vault Risk Assessment for digital asset lending pools, which hold about $10 billion on blockchains, according to coverage of the launch. For banks that lend to or hold custody for crypto firms, a rating agency method gives credit teams an outside yardstick on on-chain exposures. Visa's stablecoin card payments rose 200 percent in a year, a crypto outlet reported; DIMOCO, a European payments firm, began settling with merchants in stablecoin. No firm holds approval as a permitted payment stablecoin issuer, and the GENIUS Act takes effect January 18, 2027 unless a final rule moves it. Treasury's proposed rule on stablecoin issuance, offer or sale (91 FR 53368) is still open. Comments close October 19, 14 days out. |
| ▸ | AI risk review, on a clock: The White House has given its AI task force 120 days to report on the technology's risks and potential rewards, the Wall Street Journal reported October 3, citing new AI czar Jay Clayton. For banks that run frontier models in operations or customer channels, a dated federal assessment could shape how supervisors frame model and vendor risk. Anthropic's prospectus shows surging sales alongside worsening losses, BankInfoSecurity reported; a provider's losses bear on the pricing and continuity of the models institutions build on. Formal IPO marketing could begin November 9, per Bloomberg. |
POLITICAL & LEGISLATIVE The White House renewed its pressure on Jerome Powell over the weekend; no removal action accompanies the calls. | ▸ | Powell, another call to leave: The head of the National Economic Council said on Fox News that it is time for Powell, the former chair who remains a governor, to move on from the Board, Bloomberg reported Monday, after the inspector general's renovation report found management deficiencies but no criminal wrongdoing. The remarks follow the Justice Department's decision last week not to reopen its criminal probe. Powell remains a Fed governor. |
WHAT'S COMING | ▸ | Preemption petitions, today's order list: The Supreme Court opens its term today, with the order list from its September 28 conference due on petitions in Cantero (No. 25-1313), Flagstar v. Kivett (No. 25-1350) and Citizens Bank v. Conti (No. 25-1004). A grant would put the reach of state law over banks before the Court while the FDIC's state bank parity proposal remains open. |
WHAT IT MEANS | ▸ | The SEC's credential notices reach a bank's code-of-ethics desk before its product shelf. If the SEC designates the Series 79, 86 or 87 licenses, investment banking representatives and research analysts would qualify as accredited investors without meeting income or net worth tests. Employees at bank-affiliated broker-dealers could then buy into private placements their firms arrange. Personal-trading pre-clearance policies written around wealth thresholds would need a credential test; the comment record is the place to raise it. The deadline is December 4. |
Dates That Matter OCT 5
today | Comments close: OCC Rules Regarding the Availability of OCC Information [OCC] · Regulatory Modernization and Relief for Mutual Holding Companies [FRB] · Extensions of Credit to Insiders [FDIC] · Conflicts and Affiliations [CFTC] · Commodity Pool Operators and Commodity Trading Advisors [CFTC] · Disclosure of Information; Extension of Comment Period [FDIC] | OCT 5
today | Watch: Supreme Court order list for the Sept 28 long conference: Nos. 25-1313, 25-1350, 25-1004 [Watch] |
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