Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

FINRA Files Proposed Rule Change to CAB Rules Governing Qualification, Registration and Continuing Education of Associated Persons of CABs

Posted in Broker-Dealer

The Financial Industry Regulatory Authority (FINRA) is filing with the Securities and Exchange Commission a proposed rule change to amend the Capital Acquisition Broker (CAB) Rules governing the qualification, registration and continuing education of associated persons of CABs (CAB Rules 119-125). The proposed rule change reflects new consolidated FINRA qualification and registration rules and changes to its continuing education requirements, which took effect in October 2018. Continue Reading

FINRA Requests Comment on Its Rule on Business Continuity Plans and Emergency Contact Information

Posted in Broker-Dealer

The Financial Industry Regulatory Authority (FINRA) recently released a regulatory notice requesting comment on the effectiveness and efficiency of Rule 4370 (Business Continuity Plans and Emergency Contact Information). The comment period expires April 26.

Rule 4370 requires a member firm to create, maintain, annually review and update upon any material change a written business continuity plan (BCP) identifying procedures relating to an emergency or significant business disruption. Continue Reading

Report from FINRA Board of Governors Meeting: Board Approves Rule Proposals, Engages with Boca Raton-Area Firms

Posted in Broker-Dealer

The Board of Governors of the Financial Industry Regulatory Authority (FINRA) met on February 28 and March 1 in Boca Raton, Florida, where it discussed the organization’s finances, reviewed several significant technology and other capital initiatives, and considered certain rulemaking items. Continue Reading

NFA Reminds Members of Effective Date for Amendments to Information Systems Security Program Requirements

Posted in CFTC

On March 1, the National Futures Association (NFA) published Notice I-19-07 (Notice), alerting Members that April 1 will be the effective date for amendments to NFA’s Interpretive Notice entitled NFA Compliance Rules 2-9, 2-36 and 2-49: Information Systems Security Programs (Interpretive Notice). (For a discussion of such amendments, please refer to the January 11, 2019 edition of Corporate & Financial Weekly Digest.) The Notice reminded Members that certain cybersecurity incidents discovered on or after April 1 must be reported to NFA, as further set out in the updated Interpretive Notice.

The Notice is available here.

NFA Issues Notice Regarding Updated FinCEN AML/CFT Guidance

Posted in CFTC

On March 12, the National Futures Association (NFA) published Notice I-19-08, notifying Member futures commission merchants (FCMs) and introducing brokers (IBs) of a March 8 advisory published by the Financial Crimes Enforcement Network (FinCEN) regarding updates to the Financial Action Task Force’s list of jurisdictions with deficiencies regarding anti-money laundering and combating the financing of terrorism (AML/CFT). The advisory includes specific updates regarding AML/CFT compliance issues related to the Democratic People’s Republic of Korea, Iran and Cambodia. NFA reminds member FCMs and IBs to review the aforementioned advisory and revise, if necessary, their respective AML programs to comply with the new guidance.

Notice I-19-08 is available here.

The FinCEN advisory is available here.

CFTC and Monetary Authority of Singapore Issue Joint Statement Regarding the Mutual Recognition of Certain Derivatives Trading Venues in the United States and Singapore

Posted in CFTC, Derivatives

On March 13, the Commodity Futures Trading Commission and the Monetary Authority of Singapore (MAS) issued a joint statement announcing their mutual recognition of certain derivatives trading venues in the United States and Singapore. The CFTC issued an order exempting certain derivatives trading facilities regulated by the MAS from the registration requirements for swap execution facilities (SEFs). Similarly, the MAS issued regulations exempting certain CFTC-regulated derivatives trading venues from the requirement that such trading venues be a MAS-authorized approved exchange or recognized market operator before establishing or operating an organized market. The approval of the exemption requests was the result of the CFTC and MAS jointly determining that these platform categories meet the comparability standards under their respective laws and regulations. Continue Reading

FCA Publishes Policy Statement on New Financial Services Directory

Posted in Financial Markets, UK Developments

On March 8, the UK Financial Conduct Authority (FCA) published a policy statement on a new directory of financial services workers (Directory). This follows the FCA’s proposals to introduce the Directory and amend the existing financial services register (FS Register) in its consultation paper of July 2018 (as reported in the Corporate & Financial Weekly Digest edition of July 13, 2018). Continue Reading

PRA and FCA Hosted the First Meeting of the Climate Financial Risk Forum

Posted in Financial Markets, UK Developments

On March 8, the UK Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) hosted the first meeting of the Climate Financial Risk Forum (CFRF). A press release covering the event was published by the FCA on March 12. Continue Reading

SEC Chairman Clayton and Trading and Markets Director Redfearn Call for a Reassessment of Regulation NMS

Posted in Broker-Dealer

On March 8, US Securities and Exchange Commission chairman Jay Clayton and director, Division of Trading and Markets Brett Redfearn gave a speech entitled “Equity Market Structure 2019: Looking Back & Moving Forward.” Chairman Clayton, who noted that their comments were their own and not necessarily those of the SEC or its staff, opined that a reassessment of Regulation NMS was needed. Regulation NMS was adopted in 2005 and has remained largely untouched since its adoption, despite substantial transformation of the US equity markets as the result of technology advances. Chairman Clayton stated his view of Regulation NMS as follows: “[T]here are many areas that the Commission got right, some that may have missed their mark, and some that were positive in 2005, but may no longer be so.” Continue Reading

SEC Examines Stock Exchange Pricing

Posted in Broker-Dealer

The US Securities and Exchange Commission has begun looking into whether the current multi-tiered pricing system used by stock exchanges favors large brokers and traders at the expense of small ones. In an effort to increase the volume of trading on an exchange, certain exchange operators (including New York Stock Exchange-owner Intercontinental Exchange Inc., Nasdaq Inc. and CBOE Global Markets) provide large brokers, banks and traders with rebates based on the amount of business they bring to the stock exchanges. Continue Reading