Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Category Archives: Broker-Dealer

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SEC Issues Risk Alert in Response to WannaCry Ransomware Attack

Posted in Broker-Dealer, Investment Advisers, Investment Companies and Investment Advisers
On May 17, the Securities and Exchange Commission Office of Compliance Inspections and Examinations (OCIE), issued a Risk Alert in response to the widespread ransomware attack known as WannaCry, WCry, or Wanna Decryptor that started on May 12. The attack infected computers and servers of various organizations in more than 100 countries. The Risk Alert… Continue Reading

FINRA Proposed Rule Change to the Consolidated Audit Trail

Posted in Broker-Dealer
In February, pursuant to Regulation NMS, the various national securities exchanges and the Financial Industry Regulatory Authority (each, a Participant) filed with the Securities and Exchange Commission a plan (Plan) to create, implement and maintain a consolidated audit trail (CAT) to capture information related to customers and order events for transactions in NMS securities and… Continue Reading

SEC Grants No-Action Relief Regarding Created ETF Shares and Failure to Close Transactions

Posted in Broker-Dealer
In a letter dated April 26, the Division of Trading and Markets of the Securities and Exchange Commission granted no-action relief to Latour Trading LLC (Latour Trading) in connection with its proposed use of newly created exchange traded fund (ETF) shares to comply with the requirements set forth in Rule 204 (Close-Out Requirement) of Regulation… Continue Reading

SEC and FINRA Announce 2017 National Compliance Outreach Program for Broker-Dealers

Posted in Broker-Dealer
On May 3, the Securities and Exchange Commission and Financial Industry Regulatory Authority opened registration for the 2017 National Compliance Outreach Program for Broker-Dealers, which will be held in Washington, DC on July 27. Topics to be discussed will include cybersecurity and investing by seniors. Registration information is available here.  … Continue Reading

FINRA Amends Rule Regarding the Online Publication of Data Related to the Regulation NMS Plan to Implement a Tick Size Pilot Program

Posted in Broker-Dealer
On April 28, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission an amendment to Rule 6191 (Compliance with Regulation NMS Plan to Implement a Tick Size Pilot Program), which modifies the publication date for Appendix B website data related to the Regulation NMS Plan to Implement a Tick Size Pilot Program… Continue Reading

National Adjudicatory Council Revises Sanction Guidelines

Posted in Broker-Dealer
The Financial Industry Regulatory Authority, through the National Adjudicatory Council (NAC), has revised the FINRA Sanction Guidelines that hearing panels and the NAC use in determining appropriate remedial sanctions for FINRA members in disciplinary proceedings. Among other changes, the revised Sanction Guidelines include the following additions: three new guidelines: Supervision—Systemic Supervisory Failures, Borrowing From or… Continue Reading

FINRA Issues Regulatory Notice on GASB Accounting Support Fee

Posted in Broker-Dealer
The Financial Industry Regulatory Authority announced that it will collect a total of $8,309,000 in 2017 from its member firms as part of the Government Accounting Standards Board (GASB) Accounting Support Fee. FINRA will collect $2,077,250 each calendar quarter beginning in April 2017 from its member firms that report trades to the Municipal Securities Rulemaking Board… Continue Reading

FINRA Updates Web API Specifications for the TRACE Securitized Products

Posted in Broker-Dealer
The Financial Industry Regulatory Authority recently released a document outlining updates to the TRACE Web Application Programming Interface (API). This new update, Version 5.0, affects only securitized products. As mentioned in the FINRA Regulatory Notice, effective May 16, 2011, securitized products include asset-backed securities, mortgage-backed securities and other similar securities. The document provides the new… Continue Reading

SEC Adopts Amendment to Shorten Settlement Cycle for Securities Transactions

Posted in Broker-Dealer, SEC/Corporate
On March 22, the Securities and Exchange Commission adopted an amendment to Rule 15c6-1(a) that shortens the standard settlement cycle for most broker-dealer securities transactions from three business days (known as T+3) to two business days (or T+2). Specifically, the rule, as amended, would prohibit a broker-dealer from entering into a contract for or effecting… Continue Reading

FINRA Seeks Comment on Engagement Programs

Posted in Broker-Dealer
The Financial Industry Regulatory Authority has issued a notice requesting public comment on how to improve industry and public engagement. The notice focuses on various engagement processes and programs, including advisory, ad hoc and district committees, FINRA’s rulemaking process, member relations programs, education and compliance programs and reporting on FINRA operations. The notice is part… Continue Reading

FINRA Proposes Rule to Revise Qualification and Registration Requirements

Posted in Broker-Dealer
On March 8, the Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission to adopt amendments to the qualification and registration requirements for associated persons. The proposed rule change restructures the current qualification examinations, creates a general knowledge examination and specialized knowledge examinations, and revises the continuing education requirements.… Continue Reading

SEC Proposes Amendments to Rule 15c2-12

Posted in Broker-Dealer
The Securities and Exchange Commission recently proposed amendments to Rule 15c2-12 under the Securities Exchange Act of 1934. Rule 15c2-12 prohibits dealers acting as an underwriter for a primary offering of municipal securities from purchasing or selling those securities after the occurrence of certain events. To comply with the rule, underwriters typically provide event notices… Continue Reading

FINRA Proposes Amendments to Rule Pertaining to Communications with the Public

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) is seeking comment with respect to proposed amendments (the “Proposed Amendments”) to FINRA Rule 2210 (Communications with the Public). The Proposed Amendments would create an exception to FINRA’s general prohibition on projected performance and would be applicable to all FINRA-member firms. The Proposed Amendments would allow firms to present… Continue Reading

SEC Approves Pricing Disclosures for Fixed Income Securities

Posted in Broker-Dealer
The Securities and Exchange Commission has approved amendments to Financial Industry Regulatory Authority (FINRA) Rule 2232 (Customer Confirmations) that require FINRA-member firms to disclose additional information to retail customers with respect to transactions in certain fixed income securities (the “Final Rules”). The Final Rules require the disclosure in customer confirmations of (1) the mark-up or… Continue Reading

FINRA Files Proposed Rules With The SEC To Implement Consolidated Audit Trail Plan

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) has filed proposed rules with the Securities and Exchange Commission to adopt FINRA Rule 6800 Series, which is designed to implement the compliance rule regarding the National Market System (NMS) Plan Governing the Consolidated Audit Trail. Pursuant to Regulation NMS, various exchanges have filed with the SEC a plan to… Continue Reading

SEC Simplifies Process for Electronically Filing Broker-Dealer Annual Reports

Posted in Broker-Dealer, Derivatives
The Division of Trading and Markets (Division) of the Securities and Exchange Commission has updated its no-action relief to broker-dealers and over-the-counter (OTC) derivatives dealers from the requirement to file annual and supplemental reports with the SEC in paper form. The Division had previously issued a no-action letter in December 2015 that provided relief to… Continue Reading

FINRA and ISG Update Electronic Blue Sheet Data Elements

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) and the US members of the Intermarket Surveillance Group (ISG) have updated various data elements for Electronic Blue Sheet (EBS) to include codes for the MIAX Pearl. The FINRA and ISG also have updated the data elements for EBS to include transaction type identifiers for each of “non-program trading,… Continue Reading

MSRB Revises Customer Complaint and Related Recordkeeping Rules

Posted in Broker-Dealer
The Securities and Exchange Commission has approved the Municipal Securities Rulemaking Board’s (MSRB’s) revisions to its customer complaint and related recordkeeping rules. The MSRB has modernized the rules and extended their application to municipal advisors as follows: The MSRB extended its customer complaint recordkeeping requirements to all municipal advisors, including non-solicitor and solicitor municipal advisors.… Continue Reading

FINRA Issues Report on Implications of Blockchain

Posted in Broker-Dealer
On January 18, the Financial Industry Regulatory Authority, responding to increased industry interest in distributed ledger technology (DLT) known as “Blockchain,” issued a report on the uses and potential implications of this technology in the securities industry. The report provides an overview of DLT and its applications in various markets as well as discussing governance,… Continue Reading

FINRA Publishes 2017 Regulatory and Examination Priorities Letter

Posted in Broker-Dealer
On January 4, the Financial Industry Regulatory Authority published its Annual Regulatory and Examinations Letter (Priorities Letter), which outlines the key areas on which FINRA intends to focus during its 2017 exam period. The areas of emphasis set forth in the Priorities Letter are based on observations from FINRA’s regulatory programs and additional input from… Continue Reading

FINRA Interprets “As Soon As Practicable” Requirement Under Trade Reporting Rules

Posted in Broker-Dealer
The Financial Industry Regulatory Authority has issued a notice clarifying the “as soon as practicable” requirement under FINRA reporting rules for transactions effected over-the-counter (OTC). As background, FINRA rules provide that OTC trades in national market system (NMS) securities that are executed during the hours that a FINRA trade reporting facility is open must be… Continue Reading