Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

FINRA Releases New Targeted Exam Letter Regarding Order Routing Conflicts

Posted in Broker-Dealer

On November 10, the Financial Industry Regulatory Authority released the contents of a new Order Routing Conflicts targeted exam letter that certain member firms may receive. FINRA uses targeted exams (e.g., sweeps) to gather information on emerging issues and uses such information to pinpoint regulatory response to such issues. FINRA chooses the identity of member firms that will participate in a sweep based upon a number of factors. Continue Reading

FINRA Requests Comment on Proposal to Amend Rule 3110, to Provide Firms the Option to Conduct Remote Inspection of Offices and Locations That Meet Specified Criteria

Posted in Broker-Dealer

On November 13, the Financial Industry Regulatory Authority requested comment on a proposed rule that would allow member firms to conduct remote inspections of certain “qualifying offices,” in lieu of a physical, on-site inspection. The proposal would allow member firms to adopt policies and procedures to determine whether a given location could be deemed a “qualifying office” based upon the factors set forth in Rule 3110.12 and upon whether any associated person conducting business from that office has had a Form U4 disclosable event. Remote inspections would be subject to the same qualitative standards as on-site inspections.

The rule proposal is available here.

 

FINRA Releases a Regulatory Notice That the SEC Approved the CAT Fee Dispute Resolution Process

Posted in Broker-Dealer

On November 15, the Financial Industry Regulatory Authority issued a Regulatory Notice concerning the Securities and Exchange Commission’s approval of SEC Rule 6898 (Consolidated Audit Trail (CAT) Fee Dispute Resolution). The new rule establishes a procedure under which an industry member that disputes a CAT fee must file a written application with the CAT NMS, LLC within 15 days after being notified of the disputed charge. The application must: 1) identify the disputed CAT fees; 2) state the specific reason why the applicant disputes such CAT fees; and 3) identify the relief sought. The Fee Review Subcommittee will then decide whether to review, and if so, what, if any, relief will be granted. This rule will be implemented on December 1 (but will not be in effect until CAT fees are operative).

More information is available here.

FINRA Releases Summary of Phase 1 Changes to FINRA Advisory Committees Under FINRA360

Posted in Broker-Dealer

On November 15, the Financial Industry Regulatory Authority released an update on actions it has thus far taken under the “FINRA360” initiative, which is an ongoing comprehensive review of FINRA’s operations. As of November 13, these actions include: 1) replacing the Technology Advisory Committee with an annual “CIO Summit”; 2) broadening the authority of the Operations Advisory Committee; 3) updating the public descriptions of certain advisory committees on FINRA’s website to clarify which committees are available as forums for discussion of specific issues; 4) issuing annual notices about committees and the application process to be considered for a vacant position; and 5) emailing election notices to a broader distribution group, including each member firm’s CEO, CCO and COO.

More information is available here.

 

SEC Enforcement Division Issues Report on Priorities and Fiscal Year 2017 Results

Posted in Broker-Dealer

On November 15, the Enforcement Division of the Securities and Exchange Commission issued a report highlighting its 2018 enforcement priorities and its enforcement results for 2017. In the report, the Enforcement Division stated the five core principles that will guide enforcement in 2018: 1) focus on the Main Street investor; 2) focus on individual accountability; 3) keep pace with technological changes; 4) impose sanctions that most effectively further enforcement goals; and 5) constantly assess the allocation of resources.

In 2017, the Enforcement Division brought 754 enforcement actions, including 446 stand-alone actions, which returned a record $1.07 billion to harmed investors. In total, the SEC obtained judgements and orders totaling more than $3.789 billion in disgorgement and penalties.

More information is available here and the report itself is available here.

CFTC Announces 2018 Agricultural Commodity Futures Conference

Posted in CFTC

On November 15, the Commodity Futures Trading Commission announced that it will host, together with the Center for Risk Management Education and Research at Kansas State University, a new two-day event called Protecting America’s Agricultural Markets: An Agricultural Commodity Futures Conference on April 5–6, 2018.

The conference will take place in Overland Park, Kansas, and will feature presentations and discussions on current economic trends and issues affecting agricultural futures markets. A conference agenda and registration information will be released separately.

The CFTC press release is available here.

 

ESMA Highlights ICO Risks

Posted in EU Developments

On November 13, the European Securities and Markets Authority (ESMA) published two statements (statements) in relation to initial coin offerings (ICOs); one was made in relation to the risks of ICOs for investors and the other is in relation to the rules for firms involved in ICOs. ICOs are a way for businesses or individuals to raise finance by issuing coins or tokens, the features and purposes for which can vary substantially. Continue Reading

ESMA Publishes Updated MiFID II Q&As

Posted in EU Developments

On November 14–15, the European Securities and Markets Authority (ESMA) updated several question and answer documents (Q&As) relating to the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR). Continue Reading