Sidley advises banks and broker-dealers on the structuring of products and services that combine banking and securities features in a manner that complies with U.S. federal, state and non-U.S. financial institution laws. For example, we have represented broker-dealers in the creation of industry-leading centralized asset management programs that combine a traditional securities account with features such as debit and credit card access, electronic funds transfers and bill payment services, and sweeps of free credit balances to and from deposit accounts. We have worked with numerous banks and securities companies to enable sales of bank products such as deposits, credit cards, mortgages and unsecured lines of credit through broker-dealer channels, and from the opposite direction have helped enable banks to offer brokerage and mutual fund products and services through branch and electronic channels.
Working closely with colleagues from our Securities Enforcement and Regulatory Group, we are able to efficiently cover the unique combination of banking and securities issues that arise in these hybrid products and services. Because of the depth and breadth of our practice, we are able to support these programs from the inception of strategic planning, through the negotiation of core contracts necessary to implement those strategic plans, to detailed product implementation, including drafting of consumer contracts and disclosures and obtaining any necessary regulatory approvals or guidance. Clients rely on our broad base of experience with banks, broker-dealers, other financial services providers and technology companies to help them structure and negotiate strategic alliances, outsourcing arrangements and the entire panoply of operational agreements necessary to support critical functions and key business initiatives, such as data processing, cash management and product brokerage or distribution agreements.
With the on-going revolution of financial technology, new types of virtual instruments, such as cryptocurrencies and other forms of electronic “coins” or “tokens,” are challenging paradigms as to what may constitute currency, money transmission, securities, commodities or derivatives. Sidley provides comprehensive insight for clients with respect to these developments through a coordinated group of lawyers with experience in the relevant regulatory regimes that may affect these new financial products.
Representative Matters
- Represented investors with respect to trading in cryptocurrencies.
- Represented the sponsor of a proposed bitcoin exchange traded fund.
- Represented leading broker-dealers in establishing contracts with banks and payment processors to issue co-branded credit and debit cards and provide other forms of payment processing, such as ACH transfers and check imaging.
- Represented several banks and broker-dealers on the creation and evolution of central asset account arrangements that enable full-featured transactional services, as well as traditional securities trading.
- Represented many of the largest banks and broker-dealers in connection with their brokered certificate of deposit and cash sweep programs.
- Advised national and regional banks and broker-dealers on “networking” arrangements that enable client referrals for brokerage services.
- Advised banks and broker-dealers on the creation of securities-based lending programs, including by obtaining an industry-leading regulatory interpretation regarding the application of anti-tying rules to such services.
