On October 18, the Securities and Exchange Commission’s Division of Corporation Finance (Division) issued five new Compliance and Disclosure Interpretations (C&DIs) with respect to Item 402(u) of Regulation S-K, the rule that requires a registrant to disclose the ratio of its principal executive officer’s total annual compensation to the total annual compensation of their median employee (the “Pay Ratio Disclosure Rule”). Continue Reading
The Securities and Exchange Commission has approved the Financial Industry Regulatory Authority’s new rules governing firms that meet the definition of “capital acquisition broker” (CAB) and elect to be governed by the new CAB rules. (The Corporate & Financial Weekly Digest edition of January 8, 2016 summarized FINRA’s proposed CAB rules.) Continue Reading
The Securities and Exchange Commission has approved the Financial Industry Regulatory Authority’s amendments to its Trade Reporting and Compliance Engine (TRACE) rules to provide for dissemination of transactions in collateralized mortgage obligations (CMOs), and to reduce the reporting time for CMO transactions. Specifically, FINRA will disseminate trade-by-trade information relative to CMO transactions valued under $1 million immediately upon receipt of the transaction report. For CMO transactions valued at $1 million or more, and where there have been five or more transactions in that security of $1 million or more by at least two different market participants, FINRA will disseminate aggregated information relative to transactions in that security on a weekly and monthly basis. CMO transactions that do not meet the criteria for either immediate trade-by-trade dissemination or periodic aggregate dissemination will not be subject to public dissemination. Continue Reading
The Securities and Exchange Commission has approved the Financial Industry Regulatory Authority’s amendments to its Trade Reporting and Compliance Engine (TRACE) rules to provide for reporting of transactions in “US Treasury securities,” which includes all securities issued by the US Treasury Department, with the exception of savings bonds. As a consequence, the TRACE reporting requirements will apply to transactions in Treasury bills, notes, bonds and inflation-protected securities (referred to as “TIPS”), as well as separate principal and interest components of a US Treasury security that have been separated pursuant to the Separate Trading of Registered Interest and Principal of Securities (STRIPS) program operated by the Treasury Department. (The Corporate & Financial Weekly Digest edition of July 22, 2016 summarized FINRA’s proposed amendments.) Continue Reading
On October 18, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (Division) released an interpretive advisory for futures commission merchants (FCMs) that addressed implementation of a recent no-action letter regarding investments in money market funds (MMFs).
Recent changes to Securities and Exchange Commission rules would have prohibited FCMs from investing customer funds in MMFs that invest primarily in corporate debt securities (Prime MMFs), or MMFs that invest primarily in US government securities and that voluntarily elect to be subject to liquidity fees or redemption restrictions (Electing Government MMFs). Continue Reading
On October 18, the Commodity Futures Trading Commission approved a final order exempting certain transactions of Southwest Power Pool, Inc. (SPP) from the Commodity Exchange Act (CEA) and CFTC regulations. SPP is a Regional Transmission Organization (RTO) regulated by the Federal Energy Regulatory Commission. Continue Reading
On October 14, the European Securities and Markets Authority (ESMA) published two sets of guidelines (Guidelines) on sound remuneration practices for EU managers of Undertakings for Collective Investment in Transferable Securities (UCITS) funds (UCITS Guidelines) and EU managers subject to the Alternative Investment Fund Manager (AIFM) Directive (AIFMD Amending Guidelines). Continue Reading
On October 12, the European Securities and Markets Authority (ESMA) updated its Questions and Answers (Q&A) on the EU Undertakings for Collective Investment in Transferable Securities (UCITS) Directive. The changes include the addition of clarification: 1) that the term “regulated market in a member state” includes a multilateral trading facility (as defined by the Markets in Financial Instruments Directive); 2) that remuneration disclosure information does not need to be translated into the same languages as the UCITS fund’s key investor information document; 3) on collateral management calculations in the context of UCITS rules limiting investments in units of other funds; and 4) disclosure requirements affecting UCITS introduced by the EU Securities Financing Transactions Regulation.
The updated Q&A is available here.
On October 7, the Financial Industry Regulatory Authority issued a Trade Reporting Notice regarding its Alternative Display Facility (ADF). In particular, member firms that use the ADF to report over-the-counter trades in national market system stocks can elect to have their trades submitted by the ADF to the National Securities Clearing Corporation (NSCC) for clearance and settlement. However, to make this election, such trades must either be locked in prior to submission via agreement by both parties to the trade, or may be locked in by the system in accordance with FINRA rules. Continue Reading
On October 10, the Commodity Futures Trading Commission proposed new rules for cross-border swaps (the Proposed Rules) that are intended to supersede the non-binding guidance with respect to such swaps that it issued in in 2013. Continue Reading