Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

FINRA Proposes to Make New TRACE Security Activity Reports Available

Posted in Broker-Dealer

On June 19, the Financial Industry Regulatory Authority filed a proposed rule amendment that would make new Trade Reporting and Compliance Engine (TRACE) Security Activity Reports available. Currently, FINRA Rule 7730 enumerates the TRACE data products that FINRA offers in connection with TRACE-Eligible Securities (i.e., certain debt and US Treasury securities). Under the amendment, Rule 7730 would provide for a TRACE Security Activity Report, which would include monthly aggregated statistics by security for corporate and agency bonds. Continue Reading

CFTC Revisions to Freedom of Information Act Regulations

Posted in CFTC

The Commodity Futures Trading Commission is revising certain provisions of its regulations for disclosing records under the Freedom of Information Act (FOIA) to comply with the FOIA Improvement Act of 2016, Public Law 114–185, 130 Stat. 538 (June 30, 2016) (Act). Continue Reading

CFPB Seeks Comment on Proposed Changes to Prepaid Rule

Posted in Banking

On June 15, the Consumer Financial Protection Bureau (CFPB), announced that it is seeking comments on proposed updates to its prepaid rule, “Prepaid Accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth In Lending Act (Regulation Z)” (Prepaid Rule). The Prepaid Rule incorporates prepaid accounts under Regulations E and Z and was originally published in the Federal Register on November 22, 2016 (81 FR 83934) and amended on April 25, 2017 (82 FR 18975). Continue Reading

MiFID II Implementing Legislation Published

Posted in Derivatives, EU Developments, Financial Markets, UK Developments

On June 22, the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (SI 2017/701) were presented to Parliament. The Regulations transpose elements of the revised Markets in Financial Instruments Directive (MiFID II) and related Markets in Financial Instruments Regulation (MiFIR) into UK law. Member States of the European Union are required to implement MiFID II and MiFIR into national law by July 3, before MiFID II and MiFIR go into effect on January 3, 2018. Other elements of MiFID II and MiFIR have been implemented in the United Kingdom by the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (SI 2017/488), which was made by HM Treasury in March 2017 having been presented to Parliament in draft form in February 2017. Continue Reading

EC Launches Systematic Internalizer Amendment Consultation and Publishes Commodities Reporting ITS

Posted in Derivatives, EU Developments, Financial Markets

On June 20, the European Commission (EC) published a consultation and draft amendment to Delegated Regulation (EU) 2017/565 (Delegated Regulation) supplementing the revised Markets in Financial Instruments Directive (MiFID II). The Delegated Regulation specifies, among other things, additional criteria to be considered in determining whether a firm is a systematic internalizer (SI) for the purposes of the SI definition in Article 4(1)(20) of MiFID II. Continue Reading

FCA Updates Cyber Resilience Advice

Posted in EU Developments, Financial Markets

On June 19, the Financial Conduct Authority (FCA) published an infographic to help firms develop good cybersecurity practices. The FCA also has updated its cyber resilience webpage (for further information on the webpage, please see the Corporate & Financial Weekly Digest edition of May 26, 2017). Continue Reading

SEC Updates to Form ADV FAQs

Posted in SEC/Corporate

On June 12, the staff of the Securities and Exchange Commission’s Division of Investment Management updated its Frequently Asked Questions on Form ADV and IARD. Much of the additional guidance relates to amendments to Part 1A of Form ADV made by the SEC in 2016. Investment advisers will need to comply with these amendments beginning on October 1.

The staff revised an FAQ relating to Item 1.O, and added FAQs relating to Items 1.I, 1.J, 5.D, 5.K, 7.B and Schedule R. Notably, the staff added six FAQs relating to new Item 5.K, which requires reporting related to separately managed accounts. Additionally, in an FAQ relating to new Schedule R, the staff provided that it is withdrawing its response to Question 4 of its January 18, 2012, letter addressed to the American Bar Association, which stated that the staff would not recommend enforcement action against an investment adviser that files a single Form ADV on behalf of itself and each “relying adviser” under certain circumstances (Umbrella Registration). This response has been withdrawn, as it has been superseded by the SEC’s Form ADV amendments, which codify Umbrella Registration for certain advisers to private funds.

The updated Form ADV FAQs are available here.

 

FINRA Proposes Rule Change to Extend the Implementation of Margin Requirements for Credit Default Swaps

Posted in Broker-Dealer

On June 14, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change extending to July 18, 2018, the interim pilot program with respect to margin requirements for certain credit default swaps. The interim pilot program, which was implemented by FINRA Rule 4240, had been set to expire on June 18. (For additional information related to Rule 4240, please see the June 17, 2016 edition of Corporate and Financial Weekly Digest).

The text of the rule change is available here.

FINRA Proposes Rule Change Regarding Trade Modifiers and the Reporting of Transactions in US Treasury Securities

Posted in Broker-Dealer

On June 12, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change establishing February 5, 2018, as the date when member firms must begin using new transaction modifiers in connection with reporting transactions in certain US Treasury securities. In October 2016 the SEC approved changes to the FINRA Transaction Reporting and Compliance Engine (TRACE) rules to require reporting of transactions in certain US Treasury securities and to introduce the use of two new modifiers in connection with such reporting: “B” on a trade report if the transaction being reported is part of a series of transactions where at least one of the transactions involves a futures contract (e.g., a “basis” trade), and “S” on a trade report if the transaction being reported is part of a series of transactions and may not be priced based on the current market (e.g., a fixed-price transaction in an “on-the-run” security as part of a transaction in an “off-the-run” security). (For additional information regarding the TRACE rule changes, please see the October 21, 2016 edition of Corporate and Financial Weekly Digest). Under the newly filed rule change, member firms may begin using the new trade modifiers as of the July 10effective date for the amended TRACE rules, but will not be required to do so until February 5, 2018.

The text of the rule change is available here and a FINRA Trade Reporting Notice addressing the rule change is available here.