On April 12, the Financial Industry Regulatory Authority (FINRA) published a regulatory notice (the “Notice”) requesting comment on a proposed pilot program to study proposed changes regarding corporate bond block trade dissemination based upon recommendations by the Fixed Income Market Structure Advisory Committee (FIMSAC) of the Securities and Exchange Commission. The changes are aimed at improving corporate bond block trade dissemination—mainly, by increasing block liquidity without imposing significant costs on market participants. Currently, FINRA’s Trade Reporting and Compliance Engine (TRACE) provides information to the marketplace regarding corporate bonds and other debt securities. It is intended that the pilot program will study FIMSAC’s recommendations to determine whether such recommendations can enhance current TRACE protocols. Continue Reading
The Securities and Exchange Commission has approved a proposed rule change to amend Financial Industry Regulatory Authority (FINRA) Rule 4512 (Customer Account Information) (the “Amended Rule”). For discretionary accounts, member firms are currently required to maintain a record of the dated, manual signature of each named, natural person authorized to exercise discretion in such accounts. The Amended Rule will allow for the use of electronic signatures in connection with discretionary accounts. Continue Reading
The Commodity Futures Trading Commission will host an open meeting at 10:00 a.m. on Tuesday, April 23, at which it expects to cover the following topics:
- notice of proposed rulemaking regarding amendments to regulations on certain swap data depository and swap data reporting requirements;
- notice of proposed rulemaking regarding amendments to derivatives clearing organization general provisions and Core Principles;
- requirements applicable to swap dealers and major swap participants under UK law following a no-deal Brexit;
- final rule amending regulations to conform to FAST Act provisions on privacy of consumer financial information; and
- certification of the NIFTY 50 Index futures contract listed on the NSE IFSC Limited to be offered and sold to persons in the United States.
The meeting will be held at the CFTC’s Washington, DC headquarters and is open to the public. More information is available here.
On April 12, the UK Financial Conduct Authority (FCA) published amended directions, dated April 11, on notifications regarding the temporary permissions regime (TPR). Although the deadline for Brexit has been agreed upon by the United Kingdom and the 27 remaining EU member states as being no later than October 31, the amended directions extend the deadline for firms to notify the FCA if they wish to enter the TPR from April 11, to May 30. The TPR will go into effect upon Brexit taking effect, if there is no transition period (as reported in the January 11, 2019 edition of the Corporate & Financial Weekly Digest). Continue Reading
On April 17, the UK Financial Conduct Authority (FCA) published issue 59 of its Market Watch newsletter. In this issue, the FCA details its findings on the implementation of the revised Markets in Financial Instruments Directive (MiFID II) and the Market Abuse Regulation (MAR). Continue Reading
The Securities and Exchange Commission recently adopted final rules to modernize and simplify the disclosure requirements for public companies under Regulation S-K. This rulemaking was mandated by the Fixing America’s Surface Transportation Act (FAST Act), and the final rules are substantially in the forms originally proposed by the SEC in October 2017 (as discussed in the October 20, 2017 edition of the Corporate and Financial Weekly Digest).
The final rules make several significant changes to Regulation S-K and related rules and forms. The following are some highlights: Continue Reading
On April 5, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to extend the pilot program related to FINRA Rule 6121.02 (Market-wide Circuit Breakers in NMS Stocks), which provides a methodology for determining when to halt trading in all national market system stocks due to extraordinary market volatility, i.e., market-wide circuit breakers. The original term of the pilot program was intended to coincide with the pilot period for the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS (Limit Up-Limit Down Plan). The rule change is intended to (1) untie the pilot program’s effectiveness from that of the Limit Up-Limit Down Plan, and (2) extend its effectiveness to the close of business on October 18. The rule change was effective upon filing.
FINRA intends to file a separate proposed rule change with the SEC to adopt the rule on a permanent basis.
The text of the rule change is available here.
On April 8, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to adopt the remaining National Association of Securities Dealers (NASD) Rules and Incorporated NYSE Rules as FINRA Rules in the Consolidated FINRA Rulebook without any substantive changes. The rule change covers areas such as membership rules, foreign members, customer account statements, discretionary accounts, approvals of changes in exempt status under Rule 15c3-3 of the Securities Exchange Act of 1934, reporting requirements for clearing firms and interpretations of the Incorporated NYSE Rules. Corresponding cross-references and technical updates will also be made in the Consolidated FINRA Rulebook to reflect the aforementioned changes. The rule change is intended to (1) eliminate the Transitional Rulebook, and (2) provide member firms with greater clarity and regulatory efficiency. The rule change was effective upon filing.
The text of the rule change is available here.
On April 5, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to extend the pilot program related to FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities).
In September 2010, the SEC approved, on a pilot basis, changes to the rule that, among other things: (i) provided for the uniform treatment of clearly erroneous execution reviews in multi-stock events involving 20 or more securities, and (ii) reduced FINRA’s discretion to deviate from such standards. Since 2010, FINRA has proposed a series of additional provisions that are currently scheduled to operate for a pilot period that coincides with the pilot period for the Limit Up-Limit Down Plan (including any extensions to such pilot period). Continue Reading
On April 9, the Financial Industry Regulatory Authority issued Regulatory Notice 19-11 informing member firms that FINRA has updated its Interpretations of Financial and Operational Rules to add a new interpretation related to Rule 15c3-1(c)(2)(viii)(C)/06 of the Securities Exchange Act of 1934 (Open Contractual Commitments). The new interpretation relates to the conditions under which an underwriting backstop agreement in a firm commitment underwriting would not give rise to an open contractual commitment charge.
The Notice is available here.
The text of the interpretation is available here.