On August 10, 2023, the Securities Industry and Financial Markets Association (“SIFMA”) – a leading Wall Street industry association – filed suit to enjoin new Missouri regulations requiring investment advisors (“IA’s”) and...more
8/15/2023
/ Broker-Dealer ,
Capital Markets ,
Employee Retirement Income Security Act (ERISA) ,
Environmental Social & Governance (ESG) ,
Financial Services Industry ,
First Amendment ,
Investment ,
Investment Adviser ,
Investment Management ,
NSMIA ,
Preemption ,
Securities Regulation ,
SIFMA ,
State Regulators
In the 1920s, Wall Street cleared and settled trades by the end of the day after the trade instruction (“T+1”). Over the years, that cycle bloated to T+4, to T+3 in 1993, and then T+2 in 2017. Last week, the SEC proposed to...more
2/15/2022
/ Blockchain ,
Broker-Dealer ,
Capital Markets ,
Distributed Ledger Technology (DLT) ,
Peer-to-Peer ,
Proposed Rules ,
Regulatory Agenda ,
Regulatory Reform ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Settlement Cycles ,
Securities Transactions
In remarks this week at SEC Speaks, SEC Investor Advocate Rick Fleming mused that the “gamification” of securities trading might pose an undue risk that exploits a potential loophole in Regulation Best Interest (“Reg. BI”)....more
10/15/2021
/ Broker-Dealer ,
Cryptocurrency ,
GameStop ,
Gamification ,
Internet Memes ,
Investment Management ,
Regulation Best Interest ,
Regulation BI ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
SIFMA ,
Social Media ,
Stock Trades ,
Trading Policies
On August 27, the Securities and Exchange Commission (“SEC”) issued a broad request for information and comments on “gamification” in financial-market user interfaces, including artificial intelligence and machine learning,...more
8/31/2021
/ Artificial Intelligence ,
Broker-Dealer ,
Comment Period ,
Digital Platforms ,
Financial Markets ,
Investment ,
Machine Learning ,
Regulatory Agenda ,
Retail Investors ,
Rulemaking Process ,
Securities and Exchange Commission (SEC)
The price of Bitcoin recently topped $57,000. New York’s Attorney General issued an Investor Alert on Virtual Currency Risks, as did the SEC’s Division of Examinations....more
The SEC recently announced the creation of the Event and Emerging Risks Examination Team (“EERT”) in its Office of Compliance Inspections and Examinations (“OCIE”). ...more
Effective June 30, SEC Reg. BI requires broker-dealers to make recommendations only in the “best interests” of retail customers, imposing additional disclosure, care, conflicts-of-interest and compliance obligations....more
The Massachusetts Securities Division adopted a watered-down fiduciary-rule for broker-dealers, effective March 6, with a compliance deadline of September 1, 2020....more
FINRA issued a targeted-exam letter on February 20, 2020 seeking information on the effect of zero-commission trading upon compliance with related obligations of Best Execution, payment for order flow, and non-commission...more
2/26/2020
/ Best Execution ,
Broker-Dealer ,
Charles Schwab ,
E*Trade ,
Fees ,
Financial Industry Regulatory Authority (FINRA) ,
Industry Examinations ,
Investment ,
Investment Management ,
Sales Commissions ,
Securities Regulation ,
Securities Transactions ,
TD Ameritrade ,
Trading Policies ,
Wealth Management
On September 11, the SEC announced a pair of settled cryptocurrency enforcement actions. The first was against an unregistered digital-asset hedge fund. The second shut down an “ICO Superstore” as an unregistered...more
9/12/2018
/ Broker-Dealer ,
Cryptocurrency ,
Digital Currency ,
Enforcement Actions ,
Initial Coin Offering (ICOs) ,
Investment ,
Investment Company Act of 1940 ,
Investment Products ,
Offerings ,
Securities and Exchange Commission (SEC) ,
Token Sales ,
Unregistered Securities ,
Virtual Currency
FINRA recently proposed to remove the broker’s “control” of a securities account as a required element of a “quantitative suitability” violation under Rule 2111....more
In late October, FINRA issued a sweep exam, commanding firms to produce 15 categories of documents about firm’s cross-selling programs over a 5-year span. The sweep seeks information on cross-selling, including incentives...more
The Sixth Circuit this week declined the SEC’s request to dismiss a Constitutional challenge to the new MSRB pay-to-play rules. Instead, the Court ordered the case to a merits panel for consideration. The Republican parties...more
10/10/2016
/ Administrative Merits Determinations ,
Broker-Dealer ,
Financial Institutions ,
Financial Markets ,
Investment Adviser ,
Motion to Dismiss ,
MSRB ,
Municipal Advisers ,
Pay-To-Play ,
Securities ,
Securities and Exchange Commission (SEC)
The Securities Division of Tennessee’s Department of Commerce and Industry has increased its enforcement activity during 2016. The recent actions include:
Final Administrative Orders:
Clifton Alexander and HugeROI.com...more
The SEC announced August 25 that it approved FINRA’s pay-to-play rules governing placement-agent or solicitor broker-dealers and was “prepared” to approve the extension of MSRB Rule G-37 to municipal advisors as well....more
9/8/2016
/ Broker-Dealer ,
Dodd-Frank ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Markets ,
Investment Adviser ,
MSRB ,
Municipal Advisers ,
Pay-To-Play ,
Rule 206(4)-5 ,
Rule G-37 ,
Securities ,
Securities and Exchange Commission (SEC)
In a recent new release, the Tennessee Securities Division urged investors to ask tough questions of their investment advisors, and about their compensation, account arrangements and educational / regulatory history. The May...more
As 2015 ended, FINRA fined Barclays Capital $13.75 million for mutual-fund switching and breakpoint supervisory failures that might have been avoided if that part of Barclay’s WSPs had been properly calibrated and/or part of...more
FINRA’s Dispute Resolution Task Force issued its Final Report in mid-December. The Report reflects the group’s consideration of wide-ranging issues affecting the nation’s principle dispute-resolution forum for broker-dealers,...more
Last week FINRA proposed for SEC adoption a “pay-to-play” rule for broker-dealers engaged in distribution or solicitation activities with government entities. The Proposed Rule is modeled after investment-adviser pay-to-play...more
The Tennessee Securities Division, Department of Commerce and Insurance (Julie Mix McPeak, Comm’r) recently confirmed its launch of a comprehensive three-year cycle examination program covering all Tennessee-based...more
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a recent “Risk Alert” noting observed deficiencies in broker-dealer supervision and compliance controls over retail sales of structured products –...more
9/4/2015
/ Broker-Dealer ,
Brokers ,
Compliance ,
Due Diligence ,
Elder Issues ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Markets ,
Fixed Income Investments ,
Investment ,
Investors ,
OCIE ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Structured Financial Products
SEC Chair Mary Jo White said Tuesday that the SEC needs to move forward on a uniform fiduciary standard for the financial industry, including brokers. Addressing the annual meeting of the Securities Industry and Financial...more
The Financial Industry Regulatory Authority (“FINRA”) released its 10th annual Exam Priority Letter earlier this week (Jan. 6, 2015). The so-called “Errico Letter” advises broker-dealer member firms of the operational risks...more
The SEC this week issued cease-and-desist orders against eight auditors, fining them $140,000 collectively, for violating auditor independence rules by preparing the very broker-dealer financials they were to audit....more
FINRA celebrated its 75th Anniversary this September 18. It is the “largest independent regulator for all securities firms doing business in the United States,” with a notionally voluntary membership of over 4,100 securities...more