Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Gregory A. Uffner

Subscribe to all posts by Gregory A. Uffner

CFTC Division of Enforcement Issues Public Enforcement Manual

Posted in CFTC
On May 8, the Division of Enforcement (the “Division”) of the Commodity Futures Trading Commission issued its first public enforcement manual (the “Enforcement Manual”). The Enforcement Manual explains the roles of the CFTC and Division generally, and outlines certain general policies and procedures that guide the Division in its investigation and prosecution of violations of… Continue Reading

FINRA Requests Comment on Proposed Pilot Program to Study Changes to Corporate Bond Block Trade Dissemination

Posted in Broker-Dealer
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… Continue Reading

SEC Approves FINRA Rule Change to Permit the Use of Electronic Signatures for Discretionary Accounts

Posted in Broker-Dealer
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.… 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… Continue Reading

FINRA Extends Deadline To Self-Report Violations Under 529 Plan Share Class Initiative

Posted in Broker-Dealer
The Financial Industry Regulatory Authority has extended the deadline for member firms to self-report violations under the 529 Plan Share Class Initiative to April 30. The extension will allow firms to have more time to review their supervisory systems and procedures with respect to their 529 plan transactions. A more detailed discussion of the Plan… Continue Reading

FINRA Working Paper Concludes High Broker-Affiliated ATS Order Routing is Associated with Lower Fill Rates, Higher Transaction Costs

Posted in Broker-Dealer
The Financial Industry Regulatory Authority’s Office of the Chief Economist has released a working paper (Study), maintaining that institutional orders routed by brokers that send a high percentage of such orders through affiliated alternative trading systems (ATSs) tend to receive lower order fill rates and higher execution costs. The Study examined order-handling information over the… Continue Reading

FINRA Issues Report on Examination Findings

Posted in Broker-Dealer
This month, the Financial Industry Regulatory Authority (FINRA) issued a report summarizing various findings from recent examinations of its member firms (Report). In particular, the Report sets forth selected observations from recent examinations that FINRA considers worth highlighting because of their potential significance, frequency and impact on investors and the markets. The Report also describes… Continue Reading

CFTC Takes Action on Rules Relating to Swaps and Swap Execution Facilities

Posted in CFTC
On November 5, the Commodity Futures Trading Commission held an open meeting to consider the following matters relating to swaps and swap execution facilities: Final Rule: Amending the De Minimis Exception to the Swap Dealer Definition Proposed Rule: Amendments to Regulations on Swap Execution Facilities and Trade Execution Requirement Request for Comment Regarding the Practice… Continue Reading

FINRA Reminds Members of Obligations Related to OTC Securities Quoted by a Filed Form 211

Posted in Broker-Dealer
On September 24, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice (Notice) reminding firms of their applicable obligations when publishing a quote in an OTC security, in addition to filing a Form 211. Securities Exchange Act of 1934 (SEA) Rule 15c2-11 prevents a broker-dealer from initiating quotations in an OTC security unless such… Continue Reading

CFTC Extends Comment Period on Proposed Amendments to the Volcker Rule

Posted in CFTC
On September 4, the Commodity Futures Trading Commission, in conjunction with the Office of the Comptroller of the Currency, Treasury, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and Securities and Exchange Commission, extended the comment period on the proposed amendments to the regulations implementing Section 13 of the… Continue Reading

NFA Releases Notice Regarding Swap Valuation Dispute Filing Process

Posted in CFTC
On September 6, the National Futures Association (NFA) sent a notice to its members with information regarding the Interpretive Notice to NFA Compliance Rule 2-49. NFA Compliance Rule 2-49 requires swap dealers and major swap participants (collectively, SDs) to promptly submit relevant information to the NFA in the form and manner prescribed by NFA. The… Continue Reading

FINRA Seeks Comment on Fintech Innovation in Broker-Dealer Industry

Posted in Broker-Dealer
On July 30, the Financial Industry Regulatory Authority (FINRA) issued a Special Notice requesting comment on how to continue to foster financial technology (fintech) innovation in the financial services industry. In particular, to support its mission of investor protection and market integrity, FINRA is seeking comment from market participants on how FINRA rules or administrative… Continue Reading

FINRA Seeks Comment on Proposed Amendments to the Membership Application Program Rules

Posted in Broker-Dealer
On July 26, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice requesting comment on a proposal to the NASD Rule 1010 Series (collectively, the “Membership Application Program” rules). The Membership Application Program rules govern how FINRA’s Department of Member Regulation (the Department) reviews new membership applications and continuing membership applications (CMAs). An applicant… Continue Reading

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

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

CFTC’s Market Risk Advisory Committee Releases Agenda for Upcoming Public Meeting

Posted in CFTC, Derivatives
The Commodity Futures Trading Commission has released the agenda for the Market Risk Advisory Committee (MRAC) public meeting that will be held on January 31. The public meeting will feature four different panels, in addition to opening remarks from Rostin Behnam, MRAC Sponsor and Commissioner; J. Christopher Giancarlo, CFTC Chairman; and Brian D. Quintenz, a… Continue Reading

CFTC Provides No-Action Relief From CPO and CTA Registration to a Private University

Posted in CFTC
On September 13, the Division of Swap Dealer and Intermediary Oversight (DSIO or Division) of the Commodity Futures Trading Commission (CFTC or Commission) granted no-action relief from commodity pool operator (CPO) and commodity trading advisor (CTA) registration to a private university, subject to certain conditions. At issue was (1) the university’s collective management of an… Continue Reading

CFTC Provides No-Action Relief From Commission Regulation 4.7(b)(2) Reporting Requirements

Posted in CFTC
The Division of Swap Dealer and Intermediary Oversight (DSIO or Division) of the Commodity Futures Trading Commission (Commission or CFTC) recently granted no-action relief from the reporting requirements of CFTC Rule 4.7(b)(2) to a commodity pool operator (CPO) of two commodity pools, subject to certain conditions. CFTC Rule 4.7(b)(2) places a reporting requirement on a… Continue Reading

SEC Issues Risk Alert in Response to WannaCry Ransomware Attack

Posted in Broker-Dealer, Investment Advisers, Investment Companies and Investment Advisers
On May 17, the Securities and Exchange Commission Office of Compliance Inspections and Examinations (OCIE), issued a Risk Alert in response to the widespread ransomware attack known as WannaCry, WCry, or Wanna Decryptor that started on May 12. The attack infected computers and servers of various organizations in more than 100 countries. The Risk Alert… Continue Reading

FINRA Updates Web API Specifications for the TRACE Securitized Products

Posted in Broker-Dealer
The Financial Industry Regulatory Authority recently released a document outlining updates to the TRACE Web Application Programming Interface (API). This new update, Version 5.0, affects only securitized products. As mentioned in the FINRA Regulatory Notice, effective May 16, 2011, securitized products include asset-backed securities, mortgage-backed securities and other similar securities. The document provides the new… Continue Reading

CBOE Files Proposal To Amend Priority Rules

Posted in Broker-Dealer
On November 22, the Chicago Board Options Exchange, Inc. (the “Exchange” or CBOE) filed a proposal to amend CBOE Rules 6.45A, 6.45B and 6.73, specifying that, for transactions between floor brokers and market makers, the “initiator” of an order is the party responsible for ensuring that transactions are executed in accordance with open outcry priority… Continue Reading