Dodd-Frank Act of 2010

Question 1

Dodd Frank Act of 2010

Answer 1

Wall Street Reform & Consumer Protection Act of 2010.

Has tons of stuff in it, some not even in effect yet, reviewing only stuff testable on the CPA exam

Question 2

Private Fund Investment Advisers Registration Act

Answer 2

These are funds that are not publicly traded, and therefore did not have public reports for IPO etc. in the past. Now they have required reporting re:

Leveraging
Counterparty credit risk (Swaps)
Valuation Policies (Cost vs. FMV)
Types of Assets held

Question 3

The Volker Rule (3% Limit in Risky Assets)

Answer 3

Limits trading & investing in hedge fund or private equity fund if the trading results in > 3% ownership of the fund.

The aim of this rule is to limit the amt of speculative investments on large banks’ balance sheets.

Question 4

Swap Participants now have to

Answer 4

meet minimum capital and margin requirements so they won’t go bankrupt.

Question 5

Sets new standards for Broker/Dealers

Answer 5

Their recommendations must be suitable to the needs of their customers and in their customers’ best interest.