Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

James M. Brady

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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

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 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

CFTC Amends Filing Requirements for FCM and SD CCO Annual Reports

Posted in CFTC
The Commodity Futures Trading Commission has approved a final rule that amends certain filing requirements for futures commission merchant (FCM) and swap dealer (SD) chief compliance officer (CCO) annual reports. Most notably, the CFTC extended the filing deadline to 90 days after the registrant’s fiscal year-end. (The previous filing deadline had been 60 days after… Continue Reading

NFA Increased the Required Minimum Security Deposit for Forex Transactions

Posted in CFTC
National Futures Association (NFA) has increased the minimum security deposit that forex dealer members must collect and maintain for currency pairs involving the British pound to 5 percent. (The previous minimum security deposit for currency pairs involving the British pound was 2 percent). The increase went into effect on November 7.… Continue Reading

SEC Approves FINRA’s Capital Acquisition Broker Rules

Posted in Broker-Dealer, Derivatives
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

SEC Approves FINRA’s TRACE Amendments for CMO Transactions

Posted in Broker-Dealer
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… Continue Reading

SEC Approves FINRA’s TRACE Amendments for US Treasury Securities

Posted in Broker-Dealer
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… Continue Reading

FINRA Proposes Changes to Its Inter-Dealer Quotation System for OTC Equity Securities

Posted in Broker-Dealer
The Financial Industry Regulatory Authority has proposed changes to its inter-dealer quotation system referred to as the “OTC Bulletin Board Service.” Specifically, FINRA is proposing to rename the service as the “Over-the-Counter Display Facility,” or “ODF.” The ODF will be expanded to include any over-the-counter equity security instead of limiting the service to securities from… Continue Reading

CFTC Extends Public Comment Period for ICE Futures U.S. Block Trade Rule Change

Posted in CFTC
The Division of Market Oversight of the Commodity Futures Trading Commission has extended the public comment period with regard to the proposal by ICE Futures U.S. (IFUS) to allow pre-hedging or anticipatory hedging in certain circumstances in connection with block trades reported to IFUS. For further details on IFUS’s proposal, see the Corporate & Financial… Continue Reading

CFTC Proposes to Amend RTO-ISO Order

Posted in CFTC
The Commodity Futures Trading Commission has proposed to amend its order exempting specified electric energy-related transactions administered by regional transmission organizations (RTOs) and independent system operators (ISOs) from certain provisions of the Commodity Exchange Act (CEA). As set forth in the order, these transactions currently are exempt from all provisions of the CEA with the… Continue Reading

SEC Modifies and Extends Pilot Program for NMS Plan to Address Extraordinary Market Volatility

Posted in Broker-Dealer
The Securities and Exchange Commission has issued an order that modifies and extends the National Market System (NMS) Plan to Address Extraordinary Market Volatility. Specifically, the SEC has approved the modification of the definition of “opening price” in instances in which the primary listing exchange opens with quotations. In these instances, the opening price will… Continue Reading

SEC Seeks Public Comment on Consolidated Audit Trail Proposal

Posted in Broker-Dealer
The Securities and Exchange Commission plans to publish for public comment a National Market System (NMS) plan to create a consolidated audit trail (CAT) to better enable regulators to track trading in equity and option securities. The CAT plan was submitted jointly by the national securities exchanges and the Financial Industry Regulatory Authority to the… Continue Reading

FINRA to Publish ATS Block-Size Trade Data

Posted in Broker-Dealer
On October 3, the Financial Industry Regulatory Authority will begin publishing monthly statistics on block-size trades occurring on alternative trading systems (ATSs). The statistics regarding ATS block-size trades will be aggregated across all National Market System (NMS) stocks (i.e., there will be no security-by-security block data), will be for a time period of one month… Continue Reading