In This Issue:
- The SEC Issues Its Long-Awaited Sweep Letter on ETNs
- FINRA Proposes Amendments to Communication Rules – Relief from Filing for Certain FWPs
- Comprehensive Surveillance Sharing Agreements
- FINRA Provides a Detailed Analysis of a Broker-Dealer’s Failure to Adequately Supervise Alternative Investment Sales
- Final Rule Imposing Enhanced Prudential Standards on Foreign Banking Organizations
- Excerpt from The SEC Issues Its Long-Awaited Sweep Letter on ETNs:
On February 11, 2014, the SEC’s Division of Corporation Finance sent a “sweep” letter to exchange-traded note (ETN) issuers. The letter contains 14 items, some of which have application to all structured products, not just ETNs. The letter is the first significant SEC statement about ETNs since the SEC’s Division of Market Regulation issued two Regulation M no-action letters in 2006 and 2007.
ETNs are inherently more complex, and more difficult to describe simply, than a typical structured note. Due to the effect of the annual fee, and the redemption and call features, the payoff profile of an ETN is difficult to describe succinctly in the up, flat and down scenarios descriptive of many non-ETN structured notes. Consequently, prospectus descriptions of ETNs are often lengthy and use multiple defined terms. Some of the items in the sweep letter address these disclosure issues.
Please see full issue below for more information.
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Topics: Banks, Broker-Dealer, Compliance, ETNs, FINRA, Foreign Banks, Proposed Amendments, SEC, Surveillance, Sweep Letter
Published In: General Business Updates, Finance & Banking Updates, International Trade Updates, Securities Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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