Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

FINRA Publishes Regulatory Notice Regarding 2018 GASB Accounting Support Fee

Posted in Broker-Dealer

On April 17, the Financial Industry Regulatory Authority issued Regulatory Notice 18-12, which announces that FINRA will collect a total of $8,346,300 to fund the annual budget of the Governmental Accounting Standards Board (GASB) by collecting $2,086,575 from member firms each calendar quarter beginning in April 2018. Continue Reading

SEC Proposes Best Interest Standard for Broker-Dealers

Posted in Broker-Dealer

On April 18, the Securities and Exchange Commission proposed a new rule under the Securities Exchange Act of 1934, creating a standard of conduct for registered broker-dealers who make recommendations of securities transactions or investment strategies involving securities to a retail customer. The best interest standard requires broker-dealers to act in the best interest of the retail customer at the time a recommendation is made, without placing the interests of the broker-dealer ahead of the interest of the retail customer. Continue Reading

CFTC’s Division of Swap Dealer and Intermediary Oversight Extends Exemptive Relief From CFTC Regulations 4.7 and 4.2 Requirement to Prepare Financial Statements in Accordance With US GAAP

Posted in CFTC, Derivatives

On March 30, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued Letter 18-09, which granted exemptive relief to a commodity pool operator (CPO) of a foreign “Master Fund” and a US “Feeder Fund.” CFTC rules generally require that the financial statements a CPO is required to provide US pool participants, both in periodic reports and the annual report, must be prepared in accordance with US generally accepted accounting principles (US GAAP). However, where the pool is organized under the laws of a foreign jurisdiction, CFTC Rule 4.22(d)(2)(i) authorizes a CPO to compute and present financial statements in accordance with applicable accounting standards in that jurisdiction, including International Financial Reporting Standards (IFRS), subject to the conditions set out in the Rule. Continue Reading

EBA Publishes Report Regarding ITS on Reporting for Resolution Plans Under the EU BRRD

Posted in EU Developments, Financial Markets

On April 17, the European Banking Authority (EBA) published its draft implementing technical standards (ITS) on reporting for resolution plans under the EU Bank Recovery and Resolution Directive (BRRD).

Under the BRRD, EU Member States must ensure that resolution authorities have the power to require investment firms and credit institutions to cooperate as much as necessary in preparing resolution plans and to provide resolution authorities with all information necessary to implement, not just prepare, resolution plans. Continue Reading

ECON Publishes Proposed Amendments to Prudential Supervision of Investment Firms Directive

Posted in EU Developments, Financial Markets

On April 13, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) published a draft report, featuring the European Parliament legislative resolution with ECON’s amendments to a proposal regarding the prudential supervision of EU investment firms. This amends the Capital Requirements Directive IV and the revised Markets in Financial Instruments Directive (MiFID II) (collectively, the Proposal). Continue Reading

European Parliament Adopts Fifth Money Laundering Directive

Posted in EU Developments, Financial Markets

On April 19, the European Parliament (EP) published a press release announcing its adoption of a proposal for a fifth Anti-Money Laundering Directive (MLD5). The introduction of MLD5 forms part of the European Commission’s action plan to counter terrorist financing and money laundering, published in February 2016 (further details are available in the Corporate & Financial Weekly Digest edition of February 12, 2016). Continue Reading

Nasdaq Has Proposed a New Rule Change To Modify Its System of Volume-Based Credits

Posted in Broker-Dealer

The Nasdaq Stock Market LLC (Nasdaq) has filed with the Securities and Exchange Commission a proposed rule change to modify the current system of credits Nasdaq offers to members that add liquidity in securities that are listed on exchanges other than Nasdaq or the New York Stock Exchange. In particular, Nasdaq is seeking to modify one and eliminate another one of the volume-based credits that it offers for displayed quotes/orders that provide liquidity on Nasdaq in Tape B Securities.

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FINRA Proposed a Rule Change With Respect to the Establishment of a Second Trade Reporting Facility

Posted in Broker-Dealer

The Financial Industry Regulatory Authority recently filed a proposed rule change with the Securities and Exchange Commission to adopt rules relating to the creation of a second Trade Reporting Facility (TRF) to be operated in conjunction with Nasdaq, Inc. (Nasdaq”. The second FINRA/Nasdaq TRF (FINRA/Nasdaq TRF Chicago) would provide FINRA members with another facility to which they may report over-the-counter (OTC) trades in National Market System (NMS) stocks. Currently, FINRA has three facilities that allow its members to report such trades.

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SEC Confirms Record Retention Requirements With Third-Party Recordkeeping Services

Posted in Broker-Dealer

On April 12, the staff of the Securities and Exchange Commission issued a letter in response to an inquiry from staff of the Financial Industry Regulatory Authority, concerning broker-dealers’ recordkeeping obligations under Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-4 thereunder.

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FCA and PRA Publish 2018/19 Business Plans

Posted in UK Developments

On April 9, the UK Financial Conduct Authority (FCA) published its business plan for 2018/19. The business plan divides key priorities for the FCA over the coming year into three main areas: (1) the United Kingdom’s withdrawal from the European Union (Brexit); (2) cross-sector priorities; and (3) sector-specific priorities.

The FCA’s business plan anticipates that the level of resource required with respect to Brexit will inevitably reduce the amount of work the FCA can complete in other areas. The FCA has therefore prioritized areas where the risk of harm to consumers, market integrity or competition are greatest, and its intervention will be most impactful.

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