Archive for Private Equity

The Will of Jesus Christ

The Holy Spirit moved on me when I was around eight years old to read the Bible.  That was also the time I was saved and accepted Jesus as the Lord of my life, and began to speak in tongues.

The Bible was too hard to read for an eight year old in the late 1960’s, so I just read it whenever I was in church.  As I got older I kept reading it that way.  But the Holy Spirit kept moving on me to find a way to increase my reading.

Several years ago, the founder of the Promise Keepers visited our church.  He told his testimony, and mentioned about how to approach reading the Bible.  He said read a chapter from the eight (8) sections of the Bible, in rotation.  And let the Holy Spirit guide your hand on which part of the eight sections to read.  These eight sections are the Pentateuch (the first five books); History (which includes Acts); Prophets; Proverbs (I read Proverbs daily because there are 31 verses for each day of the month); Psalms; the Gospel: the Epistles; and Revelations.

I was so moved, because this was the way I had been looking for.

Recently, while I was reading the Bible, as I try to do daily where I read two chapters in the eight section rotation, I was reading one of my favorite chapters, the last chapter of the Book of Revelations.  I was in a good spirit, and the Holy Spirit moved on me to see that the word “will” is mentioned 12 times in the New International Version of the Bible.  That number “12” and the word “will” moved me.

First, I knew that Jesus had 12 apostles, and there are 12 tribes of Israel.  I wanted to find at least one more place in the Gospel where the number “12” is used.  I found that when Jesus fed the five thousand with only five loaves of bread and two fishes, there were “12” baskets of food left.

Then I looked up the word “will” and found that is has two definitions; to express in future tense, and to express inevitable events.

I was so moved by this that I wanted to put it in my blog to inspire the several hundred members, and anyone else who reads my blog.

 

Below is Revelations, Chapter 22 where the word “will” is stated 12 times (I have numbered them) where John is speaking of his revelation about Heaven:

(Rev 22:1 NIV) Then the angel showed me the river of the water of life, as clear as crystal, flowing from the throne of God and of the Lamb
(Rev 22:2 NIV) down the middle of the great street of the city. On each side of the river stood the tree of life, bearing twelve crops of fruit, yielding its fruit every month. And the leaves of the tree are for the healing of the nations.
(Rev 22:3 NIV) No longer will (#1) there be any curse. The throne of God and of the Lamb will (#2) be in the city, and his servants will (#3) serve him.
(Rev 22:4 NIV) They will (#4) see his face, and his name will (#5) be on their foreheads.
(Rev 22:5 NIV) There will (#6) be no more night. They will (#7) not need the light of a lamp or the light of the sun, for the Lord God will (#8) give them light. And they will (#9) reign for ever and ever.
(Rev 22:6 NIV) The angel said to me, “These words are trustworthy and true. The Lord, the God of the spirits of the prophets, sent his angel to show his servants the things that must soon take place.”
(Rev 22:7 NIV) “Behold, I am coming soon! Blessed is he who keeps the words of the prophecy in this book.”
(Rev 22:8 NIV) I, John, am the one who heard and saw these things. And when I had heard and seen them, I fell down to worship at the feet of the angel who had been showing them to me.
(Rev 22:9 NIV) But he said to me, “Do not do it! I am a fellow servant with you and with your brothers the prophets and of all who keep the words of this book. Worship God!”
(Rev 22:10 NIV) Then he told me, “Do not seal up the words of the prophecy of this book, because the time is near.
(Rev 22:11 NIV) Let him who does wrong continue to do wrong; let him who is vile continue to be vile; let him who does right continue to do right; and let him who is holy continue to be holy.”
(Rev 22:12 NIV) “Behold, I am coming soon! My reward is with me, and I will (#10) give to everyone according to what he has done.
(Rev 22:13 NIV) I am the Alpha and the Omega, the First and the Last, the Beginning and the End.
(Rev 22:14 NIV) “Blessed are those who wash their robes, that they may have the right to the tree of life and may go through the gates into the city.
(Rev 22:15 NIV) Outside are the dogs, those who practice magic arts, the sexually immoral, the murderers, the idolaters and everyone who loves and practices falsehood.
(Rev 22:16 NIV) “I, Jesus, have sent my angel to give you this testimony for the churches. I am the Root and the Offspring of David, and the bright Morning Star.”
(Rev 22:17 NIV) The Spirit and the bride say, “Come!” And let him who hears say, “Come!” Whoever is thirsty, let him come; and whoever wishes, let him take the free gift of the water of life.
(Rev 22:18 NIV) I warn everyone who hears the words of the prophecy of this book: If anyone adds anything to them, God will (#11) add to him the plagues described in this book.
(Rev 22:19 NIV) And if anyone takes words away from this book of prophecy, God will (#12) take away from him his share in the tree of life and in the holy city, which are described in this book.
(Rev 22:20 NIV) He who testifies to these things says, “Yes, I am coming soon.” Amen. Come, Lord Jesus.
(Rev 22:21 NIV) The grace of the Lord Jesus be with God’s people. Amen.

His “will” begins for everyone when they get saved.  Romans 10:9 says [i]f you declare with your mouth, “Jesus is Lord,” and believe in your heart that God raised him from the dead, you will be saved.

Next, we must be obedient to our Lord as it says in Luke 6:41-49.  “Why do you look at the speck of sawdust in your brother’s eye and pay no attention to the plank in your own eye?

How can you say to your brother, ‘Brother, let me take the speck out of your eye,’ when you yourself fail to see the plank in your own eye? You hypocrite, first take the plank out of your eye, and then you will see clearly to remove the speck from your brother’s eye.

No good tree bears bad fruit, nor does a bad tree bear good fruit.

Each tree is recognized by its own fruit. People do not pick figs from thornbushes, or grapes from briers.

A good man brings good things out of the good stored up in his heart, and an evil man brings evil things out of the evil stored up in his heart. For the mouth speaks what the heart is full of.

Why do you call me, ‘Lord, Lord,’ and do not do what I say?

As for everyone who comes to me and hears my words and puts them into practice, I will show you what they are like.

They are like a man building a house, who dug down deep and laid the foundation on rock. When a flood came, the torrent struck that house but could not shake it, because it was well built.

But the one who hears my words and does not put them into practice is like a man who built a house on the ground without a foundation. The moment the torrent struck that house, it collapsed and its destruction was complete.”

 

What Jesus does for his followers is found in Proverbs 21:21 where it says [w]hoever pursues righteousness and love finds life, prosperity and honor.

We must do his will and live a gospel life, and say to ourselves as often as needed, mountain high, valley low Jesus I am yours forever.

SEC Issues Regulations for NRSROs: Governance

This is part 2 of a two-part executive summary on the SEC issuance of amendments, new rules, and new forms affecting nationally recognized statistical rating organizations (“NRSROs”)

On August 27, 2014, the SEC in accordance with the Dodd-Frank Act and to enhance their oversight:  (i) issued amendments to existing rules and new rules that apply to credit rating agencies registered with them as NRSROs; (ii) adopted a new rule and form that apply to providers of third-party due diligence services for asset-backed securities; and (iii) adopted amendments to existing rules and a new rule that implement a requirement added by the Dodd-Frank Act that issuers and underwriters of asset-backed securities make publicly available the findings and conclusions of any third-party due diligence report obtained by the issuer or underwriter.

For purposes of this write-up, the intent of the amendments and new rules is to enhance the integrity of how NRSROs determine credit ratings by improving internal governance of NRSROs managing potential principal-agent problems and conflicts of interest in the credit rating process and promoting adherence to the procedures and methodologies for determining credit ratings and compliance with laws and regulations.

The relevant new provisions in the amendments and new rules require a NRSRO among other things to: (1) assess and report on the effectiveness of internal controls; (2) address conflicts of interest relating to sales and marketing activities and employment of former analysts; (3) have policies and procedures relating to their procedures and methodologies for determining credit ratings; (4) have standards of training experience and competence for their credit analysts; and (5) have policies and procedures to promote the consistent use of credit rating symbols.

There are new requirements for NRSROs to file an annual report containing an assessment by management of the effectiveness during the fiscal year of the internal control structure governing the implementation of and adherence to policies, procedures, and methodologies for determining credit ratings.  Further, NRSROs are now required to establish, maintain, enforce and document policies and procedures reasonably designed to ensure that the procedures and methodologies including qualitative and quantitative data and models the NRSRO uses to determine credit ratings are approved by its board of directors or a body performing a function similar to that of a board of directors.

 The intent of these new requirements is that in order for to NRSROs to avoid certain conflicts of interest they must have policies and procedures to take certain actions to address credit ratings that are influenced by a conflict of interest.

Further, there is a new requirement that prohibits an NRSRO from issuing or maintaining a credit rating where a person within the NRSRO who participates in determining or monitoring the credit rating or developing or approving procedures or methodologies used for determining the credit rating including qualitative and quantitative models also: (i) participates in sales or marketing of a product or service of the NRSRO or a product or service of an affiliate of the NRSRO; or (ii) is influenced by sales or marketing considerations.

NRSROs must have procedures that address instances in which a conflict of interest influenced a credit rating, they must promptly determine whether the current credit rating must be revised so that it no longer is influenced by a conflict of interest and is solely a product of the documented procedures and methodologies the NRSRO uses to determine credit ratings and to promptly publish a revised credit rating, an affirmation of the credit rating, or potentially place the credit rating on watch or review and in each case include certain disclosures about the existence of the conflict.  The intent is to minimize the risks that NRSRO analysts, who may be distorted by the prospect of future employment at an issuer or underwriter, could influence the analyst in determining a credit rating for that issuer or underwriter.

The SEC issued an amendment for which an NRSRO could have its registration suspended or revoked for violating a rule governing conflicts of interest.  In addition they amended Form NRSRO to provide notice to a NRSRO or a credit rating agency applying for registration as a NRSRO that a NRSRO is subject to applicable fines penalties and other sanctions under the Exchange Act.

There are new requirements for NRSROs to establish, maintain, enforce, and document policies and procedures that are reasonably designed to ensure that: (i) the procedures and methodologies including qualitative and quantitative data and models the NRSRO uses to determine credit ratings are developed and modified in accordance with the policies and procedures of the NRSRO; and (ii) material changes to the procedures and methodologies including changes to qualitative and quantitative data and models that the NRSRO uses to determine credit ratings are applied consistently to all current and future credit ratings to which the changed procedures or methodologies apply and to the extent that the changes are to surveillance or monitoring procedures and methodologies applied to current credit ratings to which the changed procedures or methodologies apply within a reasonable period of time taking into consideration the number of credit ratings impacted the complexity of the procedures and methodologies used to determine the credit ratings and the type of obligor security or money market instrument being rated.

The new rules and amendments require NRSROs to implement, maintain, enforce, and document standards of training experience and competence for the individuals they employ to participate in the determination of credit ratings that are reasonably designed to achieve the objective that the NRSRO produces accurate credit ratings in the classes of credit ratings for which the NRSRO is registered.  At a minimum these standards must include: (i) a requirement for periodic testing of the individuals employed by the NRSRO to participate in the determination of credit ratings on their knowledge of the procedures and methodologies used by the NRSRO to determine credit ratings in the classes and subclasses of credit ratings for which the individual participates in determining credit ratings; and (ii) a requirement that at least one individual with an appropriate level of experience in performing credit analysis but not less than three years participates in the determination of a credit rating.

NRSROs must have reasonably designed policies and procedures relating to: (i) assessing the probability that an issuer of a security or money market instrument will default, fail to make timely payments, or otherwise not make payments in accordance with the terms of the security or money market instrument; (ii) clearly defining each symbol number or score in the rating scale used by the NRSRO and including the definitions in Exhibit 1 to Form NRSRO; and (iii) applying any symbol number or score in the rating scale used by the NRSRO in a manner that is consistent for all types of obligors securities and money market instruments for which the symbol number or score is used.

Finally, NRSROs must retain records of certain internal controls policies, procedures and standards they are required to document.  Also, the Exchange Act requires an annual report of the NRSROs designated compliance officer to be filed on a confidential basis with the SEC.

 

Effective Dates

The effective dates particular to the Governance Segment of the new rules of the Exchange Act are as follows: the amendments to existing rules are effective November 14, 2014; except that the amendments to Section 240.17g-3(a)(7) and (b)(2) and Form NRSRO are effective on January 1, 2015; and the amendments to Section 240.17g-2(a)(9), (b)(13), (b)(14), and (b)(15), Section 240.17g-5(a)(3)(iii)(E), (c)(6), (c)(7), and (c)(8), Section 240.17g-7(a) and (b), and Form ABS-15G are effective June 15, 2015. New rules Section 240.15Ga-2, Section 240.17g-8, Section 240.17g-9, Section 240.17g-10, and Form ABS Due Diligence-15E are effective June 15, 2015.

 

 

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SEC Issues Regulations for NRSROs: Governance (Abstract)

This is part 2 of a two-part executive summary on the SEC issuance of amendments, new rules, and new forms affecting nationally recognized statistical rating organizations (“NRSROs”)

On August 27, 2014, the SEC in accordance with the Dodd-Frank Act and to enhance their oversight:  (i) issued amendments to existing rules and new rules that apply to credit rating agencies registered with them as NRSROs; (ii) adopted a new rule and form that apply to providers of third-party due diligence services for asset-backed securities; and (iii) adopted amendments to existing rules and a new rule that implement a requirement added by the Dodd-Frank Act that issuers and underwriters of asset-backed securities make publicly available the findings and conclusions of any third-party due diligence report obtained by the issuer or underwriter.

For purposes of this write-up, the intent of the amendments and new rules is to enhance the integrity of how NRSROs determine credit ratings by improving internal governance of NRSROs managing potential principal-agent problems and conflicts of interest in the credit rating process and promoting adherence to the procedures and methodologies for determining credit ratings and compliance with laws and regulations.

The relevant new provisions in the amendments and new rules require a NRSRO among other things to: (1) assess and report on the effectiveness of internal controls; (2) address conflicts of interest relating to sales and marketing activities and employment of former analysts; (3) have policies and procedures relating to their procedures and methodologies for determining credit ratings; (4) have standards of training experience and competence for their credit analysts; and (5) have policies and procedures to promote the consistent use of credit rating symbols.

 

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