Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

SEC Commissioner Jackson Gives Speech Regarding the State of America’s Stock Exchanges

Posted in Broker-Dealer

On September 19, Commissioner Robert J. Jackson, Jr. of the Securities and Exchange Commission gave a speech related to the state of the SEC’s regulation of the nation’s 13 stock exchanges in light of the transition of the exchanges from not-for-profit entities to for-profit corporations, with both regulatory and profit-seeking mandates, about a decade ago. Commissioner Jackson opined that “in for-profit hands, SEC oversight for not-for-profit exchanges can be dangerous” and asserted that the stock markets are taxing American investors with hidden fees and conflicts of interest. He called on the SEC to start asking hard questions about the country’s stock market structure and noted several steps that the SEC is taking to begin to re-evaluate market structure. Commissioner Jackson noted several areas of focus for the SEC in this area including, but not limited to, a uniform approach to the disclosure of exchange revenues and the effect of rebates on market conditions.

The text of the speech is available here.

CBOE Proposes Rule Change Relating to Qualification Examinations

Posted in Broker-Dealer

On September 20, the Securities and Exchange Commission approved a rule proposal filed by Cboe Exchange, Inc. (CBOE) related to the registration categories and qualification examinations required for Trading Permit Holders and associated persons that engage in trading activities on CBOE (Proposal). In light of FINRA’s adoption of the Securities Industry Essentials Examination (SIE), which is a general knowledge examination that all new representative-level applicants will need to take as of October 1 (Implementation Date), CBOE proposed a rule change that would require new applicants seeking to register with CBOE in a representative capacity as of the Implementation Date to pass the SIE. To be eligible for such registration, an individual also must be associated with a firm, pass an appropriate qualification examination for a representative or principal, and satisfy certain other requirements. (For additional information regarding the SIE, please refer to the January 26, 2018 edition of Corporate & Financial Weekly Digest.) Continue Reading

CFTC Announces Technology Advisory Committee Meeting

Posted in CFTC, Digital Assets and Virtual Currencies

The Commodity Futures Trading Commission (CFTC) has announced that its Technology Advisory Committee (TAC) will hold a meeting on Friday, October 5. The meeting will be held in the Conference Center at the CFTC’s Washington, DC headquarters from 10:00 am – 3:30 pm ET. Representatives of several TAC subcommittees, including the Automated and Modern Trading Markets; Distributed Ledger Technology and Market Infrastructure; Virtual Currencies; and Cyber Security subcommittees, are expected to make presentations. The committee will also discuss how RegTech is opening up the possibility of machine readable and executable regulatory rulebooks.

The meeting is open to the public on a first-come, first-served basis and is accessible by telephone.

Additional information regarding the TAC meeting is available here.

UK Treasury Committee Calls for Regulation of Crypto-Assets

Posted in Digital Assets and Virtual Currencies, UK Developments

On September 19, the UK’s House of Commons Treasury Committee (Treasury Committee) published a report on its inquiry into crypto-assets, launched in February 2018. The report is an update of what was provided on its website in May 2018 (for further details, see the May 25, 2018 edition of Corporate & Financial Weekly Digest).

Key findings and conclusions in the Treasury Committee’s report include the following: Continue Reading

SEC Releases Statement on Expiration of Tick Size Pilot

Posted in Broker-Dealer

On September 10, the Securities and Exchange Commission announced the early expiration of its Tick Size Pilot Program. Under the program, the minimum quoting and trading increments (tick sizes) for stocks of certain smaller companies was widened. The program was intended to expire on October 2. However, due to concerns relating to a mid-week shifting in quoting and trading requirements and in response to several requests, the SEC issued exemptions to exchanges and to the Financial Industry Regulatory Authority to allow for the end of such requirements on September 28. Data collection and reporting requirements will continue for six months after the end of the program.

The SEC’s press release is available here.

NFA Issues Notice of Effective Date for Amendments to Security Futures Contracts’ Risk Disclosure Statement

Posted in CFTC

On September 12, the National Futures Association issued Notice I-18-15, announcing that the amendments to NFA’s Interpretive Notice entitled NFA Compliance Rule 2-30(b): Risk Disclosure Statement for Security Futures Contracts (Interpretive Notice) will become effective on October 12. Continue Reading

CFTC and Monetary Authority of Singapore Sign Arrangement To Cooperate on FinTech Innovations

Posted in CFTC

On September 13, the Commodity Futures Trading Commission issued Release 7784-18, announcing that the CFTC and the Monetary Authority of Singapore signed the Cooperation Arrangement on Financial Technology Innovation (FinTech Arrangement) on September 13. The FinTech Arrangement supports both authorities’ efforts to facilitate FinTech development and innovation in their respective markets by focusing on information sharing on FinTech market trends and developments. This includes sharing insights derived from each authority’s relevant FinTech sandbox, proofs of concept and innovation competitions. The FinTech Arrangement also facilitates referrals of FinTech companies interested in entering the other’s market. This will help FinTech companies better understand and navigate the regulatory regime and capitalize on opportunities in each jurisdiction.

Release 7784-18 is available here.

FCA Releases New Video on Senior Managers and Certification Regime

Posted in Financial Markets, UK Developments

On September 10, the UK Financial Conduct Authority (FCA) released a video focused on the Senior Managers and Certification Regime (SM&CR).

The video emphasizes the importance of clarity of responsibilities and maintaining high standards under the SM&CR. For further details on the SM&CR, see the July 28, 2017 edition of Corporate & Financial Weekly Digest.

The FCA’s video can be viewed here.

FCA Publishes Approach to Becoming UK-Recognized Overseas Investment Exchange

Posted in Brexit, Financial Markets, UK Developments

On September 14, the UK Financial Conduct Authority (FCA) published a statement and direction clarifying how a market operator based in the European Economic Area (EEA) may make an application to become a recognized overseas investment exchange (ROIE), following the United Kingdom’s departure from the European Union (Brexit). Continue Reading

ESMA Releases Latest Double Volume Cap Data Under MiFID II

Posted in EU Developments, Financial Markets

On September 7, the European Securities and Markets Authority (ESMA) updated its public register with the latest set of double volume cap (DVC) data under the revised Markets in Financial Instruments Directive (MiFID II). The DVC public register was last updated in July (for further details, see the July 13 edition of Corporate & Financial Weekly Digest).

ESMA has identified a total of 142 new breaches. Instruments in breach of the caps will be suspended from being traded under waivers between September 12, 2018 and March 1, 2019. Due to corrected data received by ESMA, four instruments previously identified as being in breach were incorrectly identified, and the relevant suspensions of trading under the waivers should be lifted.

As of September 7, a total of 674 instruments have been suspended.

ESMA’s announcement in relation to the updated DVC register is available here.