As we have previously discussed, the SEC’s Fall 2022 “Reg Flex” Agenda charts the agency’s planned rulemaking through Q1 2023. Among this ambitious and wide-reaching agenda are two important final rulemakings concerning the...more
2/14/2023
/ Brokers ,
CFTC ,
Dodd-Frank ,
Major Swap Participants ,
Proposed Rules ,
SBS Entities ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Security-Based Swaps ,
Swap Dealers ,
Swaps
The 2023 priorities letter represents only a sliver of the topics firms can expect exam teams to cover this year. In developing the priorities, SEC staff noted their outreach directly to state securities regulators and...more
The risk alert highlights deficiencies the staff identified during examinations and provides examples of weak practices observed at firms. EXAMS staff intends for the alert to assist broker-dealers in reviewing and enhancing...more
On January 10, 2023, FINRA published the 2023 Report on FINRA’s Examination and Risk Monitoring Program. The Report serves as a resource for firms to use to bolster their compliance programs and provides a roadmap of FINRA’s...more
On December 29, 2022, President Biden signed H.R.2617, codifying a federal exemption from SEC registration for small business M&A brokers as new Exchange Act Section 15(b)(13). Limitations exist, as does the requirement to...more
The SEC recently amended Exchange Act Rule 17a-4 by adopting new recordkeeping requirements for broker-dealers. Most notably, the SEC will no longer require broker-dealers to maintain records in “write once, read many” or...more
The SEC’s Fall 2022 “Reg Flex” agenda was recently published by the federal Office of Information and Regulatory Affairs (OIRA). Chair Gensler sets the agency’s agenda, which provides a glimpse into how the agency will...more
FINRA remains very focused on preventing financial exploitation of seniors and other investors. Firms can expect to see senior investor protection as a key area of focus in the forthcoming 2023 Report on FINRA’s Examination...more
On December 14, 2022, the SEC proposed four separate equity market structure rulemakings, each of which, if adopted, will have significant effects on the markets and various industry participants. While designed to address...more
12/16/2022
/ 10b5-1 Plans ,
Best Execution ,
Comment Period ,
Equity Markets ,
Market Participants ,
Proposed Rules ,
Regulation NMS ,
Retirement Plan ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Regulation
The SEC Division of Examinations recently published a risk alert summarizing observations from exams of registered investment advisers and broker-dealers related to compliance with Reg. S-ID, which is generally designed to...more
12/14/2022
/ Broker-Dealer ,
Customer Information ,
Data Protection ,
Data Security ,
Enforcement Actions ,
Enforcement Priorities ,
Identity Theft ,
Investment Adviser ,
Regulation S-ID ,
Risk Alert ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
The SEC Division of Examinations recently published a Risk Alert on quarterly reports required under Exchange Act Rule 606, which are published by broker-dealers to provide customers with insight into factors influencing...more
12/13/2022
/ Best Execution ,
Broker-Dealer ,
Disclosure Requirements ,
Information Reports ,
Public Comment ,
Public Meetings ,
Quarterly Report ,
Reporting Requirements ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
FINRA recently provided an update on the August 2021 review of its members’ practices and controls related to the opening of options accounts and related areas, including account supervision, communications, and diligence. ...more
Interest in engaging in a crypto business seems to be at an all-time high, including doing so in or through regulated and compliant businesses in traditional financial services firms. Brokers-dealers sit atop that list....more
FINRA recently announced targeted exams of its members focused on certain retail communications concerning “crypto asset” products and services between July 1, 2022 and September 30, 2022. For purposes of the exams, FINRA...more
On November 15, 2022, the SEC announced its enforcement results for fiscal year 2022, which ended on September 30, reporting the following key metrics and highlights...more
FINRA recently published Regulatory Notice 22-23, providing guidance regarding firm and representative succession planning, including relevant FINRA rules and administrative processes and questions firms can consider when...more
The SEC recently adopted new recordkeeping requirements for broker-dealers and “SBS entities” (security-based swap dealers and major security based swap participants). Most notably, the SEC will no longer require...more
FINRA recently highlighted Rule 3241 in the 2023 Regulatory Element Learning Plan. Rule 3241 became effective in early February 2021 and prohibits a registered person from being named as a beneficiary, executor, or...more
FINRA recently hosted a conference call with its smaller members covering Regulation Best Interest and Form CRS compliance. FINRA’s resounding message was that there is “no one-size-fits all” approach to Reg. BI...more
10/13/2022
/ Broker-Dealer ,
Compliance ,
Conflicts of Interest ,
Disclosure Requirements ,
Financial Industry Regulatory Authority (FINRA) ,
Form CRS ,
Investment Adviser ,
Investment Management ,
Regulation Best Interest ,
Regulation BI ,
Securities and Exchange Commission (SEC)
The SEC and CFTC recently charged 11 large financial institutions and their affiliates for failing to collect, monitor, and preserve communications over WhatsApp and other messaging services. These settlements follow a...more
10/7/2022
/ Affiliates ,
CFTC ,
Civil Monetary Penalty ,
Enforcement Actions ,
Financial Institutions ,
Government Investigations ,
Instant Messaging Apps ,
Investment Adviser ,
Recordkeeping Requirements ,
Securities and Exchange Commission (SEC) ,
Settlement ,
Social Media ,
WhatsApp
This article focuses on how the new Rule 206(4)-1 (the “Marketing Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”) affects the relationships between investment advisers registered with the U.S. Securities...more
10/4/2022
/ Advertising ,
Broker-Dealer ,
Compliance ,
Disclosure Requirements ,
Endorsements ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Marketing ,
New Rules ,
Policies and Procedures ,
Private Funds ,
Registered Investment Advisors ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Testimonial Statements
CFTC Commissioner Christy Goldsmith Romero recently criticized the agency’s longstanding practice of settling enforcement cases without seeking admissions of wrongdoing (so-called “no-admit/no-deny” settlements). She suggests...more
The North American Securities Administrators Association (NASAA), an organization of state and provincial securities regulators in the United States, Canada, and Mexico, recently issued an investor advisory warning...more
The SEC recently brought fraud charges against Sterlington, Louisiana and its former mayor and separately against Rochester, New York and its former executives and Rochester’s municipal advisors and principals/owners...more
9/1/2022
/ Enforcement Actions ,
False Statements ,
Misrepresentation ,
Municipal Bonds ,
Municipal Securities Issuers ,
Municipalities ,
Rule 10(b) ,
SEC Examination Priorities ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations
SEC staff recently served up a juicy staff bulletin covering the standards of conduct for broker-dealer and investment adviser conflicts of interest. The staff bulletin includes 13 Q&As categorized into five different...more