Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

FINRA Issues Report on Examination Findings

Posted in Broker-Dealer

This month, the Financial Industry Regulatory Authority (FINRA) issued a report summarizing various findings from recent examinations of its member firms (Report). In particular, the Report sets forth selected observations from recent examinations that FINRA considers worth highlighting because of their potential significance, frequency and impact on investors and the markets. The Report also describes compliance and supervisory practices that FINRA has observed to be effective in certain circumstances. Continue Reading

CFTC Issues Request for Input on Crypto-Assets

Posted in CFTC, Digital Assets and Virtual Currencies

As part of its LabCFTC initiative, the Commodity Futures Trading Commission issued a Request for Input (RFI) to deepen the CFTC’s understanding of the technology, mechanics, and markets for Ether and its use on the Ethereum Network. In particular, the RFI seeks to understand similarities and distinctions between Ether and Bitcoin (as well as other virtual currencies), and Ether-specific opportunities, challenges and risks.

Comments on the RFI may be submitted up to 60 days after its publication in the Federal Register.

A copy of the RFI is available here, and the associated CFTC press release is available here.

NFA Proposes Interpretive Notice Regarding CPO Internal Controls Systems

Posted in CFTC

On December 10, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission a proposed Interpretive Notice to NFA Compliance Rule 2-9, which would provide commodity pool operators (CPOs) with guidance on designing and implementing an adequate system of internal controls. Specifically, the Interpretive Notice requires CPOs to implement an internal controls system that is designed to protect customer funds and ensure the reliability of the CPO’s books and records and compliance with CFTC and NFA requirements. This includes adopting and implementing written policies and procedures that fully explain the CPO’s internal controls system and maintain records that support the implementation and effectiveness of that system. Continue Reading

NFA Proposes Amendments Incorporating Swaps into Compliance Rules and Interpretive Notices

Posted in CFTC, Derivatives

On December 10, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission for review and approval proposed amendments to various NFA Compliance Rules and four NFA Interpretive Notices to incorporate swaps into these rules and notices.

Specifically, the NFA proposal would amend the following Compliance Rules: Continue Reading

Short Selling (Amendment) (EU Exit) Regulations 2018 Made in Preparation of Brexit

Posted in Brexit, Brexit/UK Developments, Financial Markets, UK Developments

On December 7, the Short Selling (Amendment) (EU Exit) Regulations 2018 (UK Regulations) were published, together with an explanatory memorandum. A draft version of the UK Regulations was published on October 10.

The UK Regulations ensure that the regime established in the United Kingdom under the EU Short Selling Regulation (SSR) will continue to operate effectively after its withdrawal from the European Union on March 29, 2019 (Exit Day). Continue Reading

FCA Publishes Consultation Paper on Product Intervention Measures for Retail Binary Options

Posted in Financial Markets, UK Developments

On December 7, the UK Financial Conduct Authority (FCA) published a consultation paper on product intervention measures for retail binary options.

The FCA is proposing to prohibit the sale, marketing and distribution of binary options in or from the UK to retail consumers by creating new rules in its Conduct of Business sourcebook (COBS). Continue Reading

HM Treasury Publishes Updated Draft Brexit Statutory Instrument Relating to Collective Investment Schemes

Posted in Brexit, Financial Markets

On December 6, HM Treasury published updated versions of the draft Collective Investment Scheme (Amendment etc.) (EU Exit) Regulations 2018 (Draft CIS (Brexit) SI) and the related explanatory information.

Draft CIS (Brexit) SI ensures that the regime established under the UCITS IV Directive for investment funds and their managers continues to operate effectively after the United Kingdom’s withdrawal from the European Union (Brexit) on March 29, 2019 (Exit Day). It includes amendments to the retained provisions of delegated acts made under UCITS IV and UK legislation such as the Financial Services and Markets Act 2000. Continue Reading

FCA Publishes Consultation Paper on Restricting CFD Products Sold to Retail Clients

Posted in Derivatives, Digital Assets and Virtual Currencies, Financial Markets, UK Developments

On December 7, the UK Financial Conduct Authority (FCA) published a consultation paper on restricting contract for difference (CFD) and other derivative products sold to retail consumers.

In its consultation paper, the FCA is proposing to intervene in the CFD market to address allegedly poor conduct by firms offering CFD products to retail customers, and to limit the sale of CFDs and similar products with excessive risk features that could result in harm to such customers. The FCA has proposed rules that will require firms to: Continue Reading

European Commission Reported to Grant Temporary Access to UK Clearing Houses

Posted in Brexit, Brexit/UK Developments, Derivatives, Financial Markets

On December 12, it was reported that the European Commission (EC) intends to grant temporary and conditional equivalence status to UK central counterparties (CCPs) under the European Market Infrastructure Regulation (EMIR) in the event of the United Kingdom withdrawing from the European Union (Brexit) without concluding a withdrawal agreement (“no-deal Brexit”). Continue Reading

ECJ Rules That Article 50 Notice of Intention to Leave the EU Can Be Unilaterally Revoked

Posted in Brexit, EU Developments, Financial Markets

On December 10, the European Court of Justice (ECJ), in the case of Wightman and Others v. Secretary of State for Exiting the European Union, ruled that the notice of an intention to leave the European Union, once properly submitted, can be unilaterally revoked, rather than requiring the consent of all other EU Member States. Continue Reading