July 16 (Reuters) - The Obama administration on Thursday
sent Congress proposed legislation that would give shareholders
more influence over corporate executive pay, part of a broader
plan to tighten U.S. financial regulation.

In the midst of the worst banking crisis in generations and
with the economy in its 19th month of recession, Congress and
the administration are working on an array of initiatives to
tighten oversight of banks and financial markets.

Companies whose business models could be at risk under
various aspects of the plan are listed below under the heading
of "political risk exposure."
(For an executive summary of the administration's financial
regulation reform proposals, please click on:
here)

EXECUTIVE PAY:

The Treasury sent Congress a bill on Thursday that would
give shareholders an annual non-binding vote on executive pay
and require more independence for compensation committees.

The "say-on-pay" legislation would resemble rules adopted
in Britain in 2002. It would require a separate shareholder
vote for golden parachutes or other special payments to
executives in mergers or acquisitions.

The administration has vowed to revamp executive
compensation structures across the board to discourage
excessive risk taking and better align pay with shareholder
interests.
(For the full bill language, please click on:
here)

SYSTEMIC RISK REGULATION:

The Obama administration wants to put the Federal Reserve
in charge of overseeing large, interconnected firms and "big
picture," or systemic, financial risk in the economy.

Under the Obama plan, the Fed would work with a council of
regulators that would replace the President's Working Group on
Financial Markets. Some lawmakers, disappointed with the Fed's
recent work in protecting consumers and managing risk, are
skeptical about giving the central bank this new duty.

RESOLUTION AUTHORITY:

A government mechanism would be set up for "orderly
resolution of any financial holding company whose failure might
threaten the stability of the financial system" under the Obama
plan. Draft legislation has been proposed giving the Federal
Deposit Insurance Corp this power. Republicans are offering a
proposal to create a new chapter in the bankruptcy code
instead.

CONSUMER, INVESTOR PROTECTION:

A new Consumer Financial Protection Agency would be formed
under President Barack Obama's plan to oversee mortgages,
credit cards and other financial products and services.

The agency could require securitized loan originators to
retain 5 percent of credit risk, while it would also define
standards for "plain vanilla" financial products.

Most of the financial services industry is lobbying hard on
Capitol Hill to block this aspect of the Obama plan, which it
sees as a threat to its profits.
(For the full bill language, please click here and
here)

BANK REGULATION:

Bank regulation would be streamlined, under the Obama plan,
with a new national bank supervisor taking over functions of
two existing bank supervisors -- the Office of Thrift
Supervision and the Office of the Comptroller of the Currency.

The plan would eliminate the charter for thrifts that
underlies the U.S. savings and loan industry. Representative
Barney Frank, chairman of the House of Representatives
Financial Services Committee, opposes killing the charter.

CAPITAL AND LIQUIDITY STANDARDS:

Financial institutions would have to strengthen their
capital cushions to absorb losses when times are tough, and
make themselves more liquid, or able to move quickly in and out
of various holdings, "with more stringent requirements for the
largest and most interconnected firms," under the plan.

This part of the plan has broad international implications,
with the European Union eyeing similar changes.

SECURITIZATION:

Issuers of asset-backed securities would face new reporting
requirements and be required to keep at least 5 percent of the
performance risk in loans they securitize, under the plan.

Transactions would be more standardized and compensation of
securitizers would be linked to long-term performance.

Sponsors of securitizations would have to stand behind
securitized products sold to investors with warranties.

The 5-percent skin-in-the-game mandate was included in a
bill already approved by the House and now languishing in the
Senate, complicating handling of this part of the Obama plan.

Political risk exposure: Citigroup (C.N: Quote, Profile, Research), Wells Fargo
(WFC.N: Quote, Profile, Research), Bank of America (BAC.N: Quote, Profile, Research), JPMorgan Chase (JPM.N: Quote, Profile, Research)

CREDIT RATING AGENCIES:

Reliance by regulators on credit rating agencies would be
reduced by changing some legal rules covering debt issuance
that encourage the use of credit ratings, under the plan.

The Securities and Exchange Commission is already
considering reforms of potential conflicts of interest at
ratings agencies. Final action is likely months away.

The SEC on Monday said it was targeting credit rating
agencies for special scrutiny by a new squad of examiners.

Political risk exposure: Moody's Corp (MCO.N: Quote, Profile, Research), Standard &
Poor's (MHP.N: Quote, Profile, Research), Fitch Ratings (LBCP.PA: Quote, Profile, Research)

OTC DERIVATIVES:

Under the Obama plan, over-the-counter derivatives would be
regulated, futures and securities rules harmonized and payment
and settlement safeguards strengthened.

The administration wants to process more trading through
exchanges and clearinghouses, supervise dealers more closely,
and make the opaque OTC derivatives market more transparent.

The scope of reform will largely be decided by legal
definitions such as which derivatives are "standardized" and
which are "customized," as well as which are moved through
exchanges, central clearinghouses or subjected to increased
disclosure.

Political risk exposure: JPMorgan Chase, Bank of America
Corp, Citigroup, Goldman Sachs (GS.N: Quote, Profile, Research), CME Group Inc (CME.O: Quote, Profile, Research),
IntercontinentalExchange (ICE.N: Quote, Profile, Research)

HEDGE FUNDS, PRIVATE EQUITY:

The Obama plan would require hedge funds and other private
pools of capital to register with the SEC. Lawmakers have
introduced several bills in Congress to give the SEC authority
to require hedge funds to register.

The hedge fund industry largely supports increased
regulation, although some in the private equity and venture
capital sectors are resisting increased government oversight.

Political risk exposure: Bridgewater Associates, D.E. Shaw
Group, Farallon Capital Management, Citadel Investment Group,
Fortress Investment Group (FIG.N: Quote, Profile, Research), many others.

SHORT-SELLING:

The SEC is considering rules that would require large short
sellers to disclose their positions to the agency, and to
restrict short-selling possibly through an updated uptick rule,
which allows shorting only when a stock's last sale price was
higher than the previous price.

STUDENT LOANS:

President Obama's 2010 federal budget and legislation filed
this week in the House call for ending the federally guaranteed
student loan program and moving most of the country's $92
billion in student lending into the direct-loan program run by
the Education Department.

Political risk exposure: Sallie Mae (SLM Corp) (SLM.N: Quote, Profile, Research),
Student Loan Corp (STU.N: Quote, Profile, Research), JPMorgan, Bank of America, ITT
Educational Services (ESI.N: Quote, Profile, Research), Corinthian Colleges (COCO.O: Quote, Profile, Research)

INSURERS:

The administration has called for a new Treasury Department
Office of National Insurance that would monitor the industry
and gather data, but not regulate.

Political risk exposure: Allstate Corp (ALL.N: Quote, Profile, Research), Travelers
Cos Inc (TRV.N: Quote, Profile, Research), Hartford Financial (HIG.N: Quote, Profile, Research), MetLife Inc
(MET.N: Quote, Profile, Research), Prudential Financial Inc (PRU.N: Quote, Profile, Research)