Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Category Archives: Broker-Dealer

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FINRA Proposes Rule Change Regarding ATS Reporting of Transactions to TRACE

Posted in Broker-Dealer
The Financial Industry Regulatory Authority recently filed a proposed rule change with the Securities and Exchange Commission to amend FINRA Rule 6730 regarding transaction reporting. Currently under Rule 6730, US Treasury Securities transactions executed on an alternative trading system (ATS) must be reported to the Transaction Reporting and Compliance Engine (TRACE) by the ATS itself… Continue Reading

FINRA Publishes Information Notice Regarding Enhancements to the Disclosure Review Process Relating to Public Financial Records

Posted in Broker-Dealer
On May 18, the Financial Industry Regulatory Authority (FINRA) published an Information Notice regarding enhancements to FINRA’s disclosure review process (Information Notice). The enhancements will allow member firms to rely on FINRA’s verification process to comply with the requirement to conduct public searches related to bankruptcies, judgments and liens. Beginning on July 9, FINRA will… Continue Reading

FINRA Proposes Rule Change to FINRA Regulation, Inc. District Committee Structure and Governance

Posted in Broker-Dealer
On May 18, the Financial Industry Regulatory Authority (FINRA) filed a rule change with the Securities and Exchange Commission to amend the by-laws of FINRA Regulation, Inc. (FINRA Regulation)—FINRA’s regulatory subsidiary. The rule change would reorganize FINRA Regulation’s District Committees (Rule Change), converting FINRA Regulation’s District Committees into Regional Committees, which mirror the regions covered… Continue Reading

SEC Division of Trading and Markets Director Gives Remarks Regarding Regulation Best Interest

Posted in Broker-Dealer
On May 22, Brett Redfearn, the Director of the Securities and Exchange Commission’s Division of Trading and Markets spoke at the Financial Industry Regulatory Authority’s Annual Conference regarding the newly proposed Regulation Best Interest. (For a more complete discussion of Regulation Best Interest, please refer to Katten’s “SEC Proposes Fiduciary Rule for Broker-Dealers” advisory, available… Continue Reading

FINRA Amends Rule 3310 to Reflect FinCEN’s Customer Due Diligence Requirements

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) filed amendments to Rule 3310 to conform to the Financial Crimes Enforcement Network’s (FinCEN’s) customer due diligence requirements. Specifically, the amendments to Rule 3310 require each member to include in its anti-money laundering program appropriate procedures for conducting ongoing customer due diligence, including but not limited to, “[u]nderstanding the… Continue Reading

FINRA Extends Effective Date of Margin Requirements for Covered Agency Transactions

Posted in Broker-Dealer
In 2016, the Financial Industry Regulatory Authority announced the Securities and Exchange Commission’s approval of a rule change to establish margin requirements for Covered Agency Transactions. These transactions include (1) To Be Announced transactions, inclusive of adjustable rate mortgage transactions; (2) Specified Pool Transactions; and (3) transactions in Collateralized Mortgage Obligations, issued in conformity with… Continue Reading

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… 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… Continue Reading

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… Continue Reading

SEC Releases Statement on Platforms Trading Digital Assets

Posted in Broker-Dealer
On March 7, the Securities and Exchange Commission released an advisory regarding platforms used to trade digital assets. The SEC expressed concern that, in light of the rise in popularity of trading digital assets, including coins and tokens in initial coin offerings, investors could mistakenly believe that platforms used to trade such assets are registered… Continue Reading

FINRA Updates Criteria Regarding Business Continuity and Disaster Recovery Testing

Posted in Broker-Dealer
On March 7, the Financial Industry Regulatory Authority published Regulatory Notice 18-09, which expands the criteria FINRA will use to designate member firms that must participate in business continuity and disaster recovery testing (BC/DR testing). Regulation SCI requires FINRA to designate firms that must participate in BC/DR testing.  Regulatory Notice 18-09 indicates that the following… Continue Reading

FINRA Requests Comment on Proposed New Rule Governing Outside Business Activities

Posted in Broker-Dealer
On February 26, the Financial Industry Regulatory Authority released Regulatory Notice 18-08, which solicits comments on a proposed new rule to address the outside business activities of registered persons. The proposed rule would replace existing Rule 3270 (Outside Business Activities of Registered Persons) and Rule 3280 (Private Securities Transactions of an Associated Person) with a… Continue Reading

FINRA Issues Regulatory Notice Regarding Extension of Time Requests Relating to FINRA Rule 4210

Posted in Broker-Dealer
On February 14, the Financial Industry Regulatory Authority (FINRA) published a Regulatory Notice stating that it is updating the Regulatory Extension (REX) system to include increased functionality that will assist FINRA member firms in requesting extensions of time related to FINRA Rule 4210. This will include requests for extensions of time in connection with the… Continue Reading

SEC Announces Examination Priorities for 2018

Posted in Broker-Dealer, SEC/Corporate
The Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission has announced its examination priorities for 2018. This year, the OCIE’s examination priorities fall within the following categories: examining compliance and risks in critical market infrastructures; protecting retail investors, including seniors and those saving for retirement; continuing oversight over the Financial… Continue Reading

FINRA Requests Comment on Rules Applicable to Government Securities

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) is requesting comment on the applicability of various FINRA rules to government securities. After undertaking a review of its rulebook, FINRA has identified several rules that currently exclude or do not clearly apply to US Treasury securities or other government securities. FINRA has determined that the application of these… Continue Reading

FINRA Proposes Rule Change To Provide Additional Hearing Options for Parties in Certain Arbitrations

Posted in Broker-Dealer
On January 30, the Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission to adopt amendments to FINRA Rules 12600 and 12800 of the Code of Arbitration Procedures for Customer Disputes (Customer Code) and FINRA Rules 13600 and 13800 of the Code of Arbitration Procedure for Industry Disputes (Industry… Continue Reading

FINRA Proposes Rule Change Related to the Content of the Securities Industry Essentials Examination

Posted in Broker-Dealer
On January 12, the Financial Industry Regulatory Authority (FINRA) filed with the Securities and Exchange Commission a proposed rule change outlining the content and selection specifications for FINRA’s new general knowledge examination, the Securities Industry Essentials Examination (SIE) (For additional information related to the SIE, please see the July 14, 2017 edition of the Corporate… Continue Reading