On April 8, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to adopt the remaining National Association of Securities Dealers (NASD) Rules and Incorporated NYSE Rules as FINRA Rules in the Consolidated FINRA Rulebook without any substantive changes. The rule change covers areas such as membership rules,
Janet M. Angstadt
FINRA Proposes Rule Extending the Pilot Program Related to Exchange-Listed Securities
On April 5, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to extend the pilot program related to FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities).
In September 2010, the SEC approved, on a pilot basis, changes to the rule that, among other things: (i) provided for the uniform treatment of clearly erroneous execution reviews in multi-stock events involving 20 or more securities, and (ii) reduced FINRA’s discretion to deviate from such standards. Since 2010, FINRA has proposed a series of additional provisions that are currently scheduled to operate for a pilot period that coincides with the pilot period for the Limit Up-Limit Down Plan (including any extensions to such pilot period). …
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FINRA Issues Regulatory Notice Regarding Departing Registered Representatives
On April 5, the Financial Industry Regulatory Authority issued Regulatory Notice 19-10 addressing the responsibilities of member firms when communicating with customers about the departure of registered representatives who have direct contact with customers in the conduct of such member firm’s securities sales. The Notice reinforces two key expectations related to such communications.
First, in …
FINRA Proposes Rule Making Substantive, Organizational and Terminology Changes to the Corporate Financing Rule
On April 11, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to make certain substantive, organizational and terminology changes to FINRA Rule 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements), which requires member firms that participate in a public offering to file documents and information with FINRA about the underwriting terms and arrangements.
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FINRA Files Proposed Rule Change to CAB Rules Governing Qualification, Registration and Continuing Education of Associated Persons of CABs
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.
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SEC Chairman Clayton and Trading and Markets Director Redfearn Call for a Reassessment of Regulation NMS
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.”…
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FINRA Issues Regulatory Notice on Effective Date Extension of Margin Requirements for Covered Agency Transactions
On February 12, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 19-05 (Notice) informing member firms that the effective date for the implementation of the amendments to FINRA Rule 4210 has been postponed. The amendments, which will establish mandatory margin requirements for certain covered agency transactions, will go into effect on March 25, 2020…
Statement on Status of the Consolidated Audit Trail
On August 27, the Securities and Exchange Commission’s Division of Trading and Markets issued a public statement on the status of the consolidated audit trail (CAT) and the SROs’ (defined below) currently expected timetable for compliance with their obligations under the revised Plan (defined below).
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SEC Amends Disclosure Obligations in Municipal Securities Market
The Securities and Exchange Commission has adopted new disclosure requirements for participants in the municipal securities market. As background, Rule 15c2-12 under the Securities Exchange Act of 1934 requires each broker, dealer and municipal securities dealer that acts as an underwriter in a primary offering of municipal securities with an aggregate principal amount of $1,000,000 or more (unless subject to an exception or exemption) to reasonably determine that an issuer or an obligated person has agreed to provide to the Municipal Securities Rulemaking Board timely notice of 14 enumerated events. These events include, among other things, a merger, consolidation, acquisition or asset sale involving an obligated person, delinquencies on principal or interest payments, and various other events that may signify financial distress affecting the offering.
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SEC Disapproves Bitcoin Exchange-Traded Products
The Securities and Exchange Commission, acting through authority delegated to the Division of Trading and Markets (Division), disapproved proposals by the New York Stock Exchange Arca Exchange and the Chicago Board Options Exchange (Cboe) BZX Exchange to list bitcoin exchange-traded products (ETPs) for trading. Both exchanges previously filed proposals to list ETPs that invest in bitcoin futures and/or related derivative instruments.
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