Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

James M. Brady

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SEC Extends Compliance Date for Regulation NMS Changes

Posted in Broker-Dealer
The Securities and Exchange Commission has extended the compliance dates for amendments to Rule 606 of Regulation National Market System (NMS) that were adopted in November 2018. The amendments to Rule 606 require specific additional disclosures for broker-dealers, including disclosure upon customer request of information relating to a customer’s NMS stock orders submitted on a not… Continue Reading

FINRA Issues Warning on Imposter Website Threat

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) has issued a notice warning member firms that there appears to be an increase in imposter websites designed to mimic firms’ actual websites. FINRA suggests that member firms take proactive steps to monitor for imposter websites, including registering URL name variations and using monitoring services to watch for imposter… Continue Reading

CBOE Proposes Amendments to Rule 6.49A to Eliminate On-Floor Position Transfers Procedures

Posted in Broker-Dealer
CBOE Exchange, Inc. (CBOE) recently filed a proposal to amend its Rule 6.49A to delete the provisions therein related to on-floor position transfers and amend the provision regarding presidential exemptions. Generally, CBOE Rule 6.49(a) requires that transactions of option contracts listed on the exchange for a premium in excess of $1.00 to be effected on… Continue Reading

CBOE Proposes Changes to Its Processes and Rules Concerning Investigative and Disciplinary Matters

Posted in Broker-Dealer
CBOE Exchange, Inc. (CBOE) has proposed amendments to Chapter 17 of the CBOE Options Rules regarding investigative and disciplinary matters involving CBOE Trading Permit Holders (TPHs) and their associated persons. In particular, the amendments reflect updates to CBOE’s rules and processes related to: complaints and investigations; expedited proceedings; the issuance of charges (and answers thereto);… Continue Reading

FINRA Proposes Data Service for Corporate Bond New Issues

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) has filed with the Securities and Exchange Commission a proposed rule change to establish a new issue reference data service for corporate bonds. FINRA currently requires underwriters of initial offerings for corporate bonds to submit information relating to the bonds to FINRA under Rule 6760. This information is limited… Continue Reading

CFTC Proposes To Amend Annual Privacy Notice Requirement

Posted in CFTC
The Commodity Futures Trading Commission has proposed to amend its regulations to eliminate the requirement for registered firms to provide annual privacy notices to their customers, under certain conditions, consistent with amendments made to the Gramm-Leach-Bliley Act in late 2015. If adopted, the proposed amendments would provide an exemption to registered futures commission merchants, retail… Continue Reading

CFTC Grants Exemption From SEF Registration to Four Additional MTFs

Posted in CFTC
The Commodity Futures Trading Commission has amended its order granting an exemption from swap execution facility (SEF) registration to include four additional multilateral trading facilities: Creditex Brokerage LLP; Currenex; FX Connect; and Thomson Reuters. The order, which was originally issued by the CFTC in December 2017 and discussed in the December 15, 2017 edition of… Continue Reading

NFA Proposes To Amend Interpretive Notice on Information Systems Security Programs

Posted in CFTC
National Futures Association (NFA) has proposed to amend its interpretive notice on information systems security programs (ISSPs) to further clarify each member’s obligations relating to its ISSP, including training, approval and incident reporting. With respect to ISSP training, the amended interpretive notice will require members to train their employees upon hiring and on at least… Continue Reading

CFTC Releases White Paper Addressing Cross-Border Swaps Regulation

Posted in CFTC
On October 1, Commodity Futures Trading Commission Chairman J. Christopher Giancarlo released a white paper addressing the regulation of cross-border swaps. The white paper, titled “Cross-Border Swaps Regulation Version 2.0: A Risk-Based Approach with Deference to Comparable Non-U.S. Regulation,” sets forth various proposed changes to the CFTC’s current cross-border approach.… Continue Reading

CFTC and Australian Securities Regulator Sign FinTech Cooperation Agreement

Posted in CFTC
The Commodity Futures Trading Commission and the Australian Securities and Investments Commission (ASIC) have entered into a cooperation arrangement on financial technology innovation. The arrangement is intended to facilitate cooperation and the sharing of information between the CFTC and ASIC relating to financial technology and the use of technology for purposes of regulation and oversight… Continue Reading

NFA Issues Notice on Calculating Financial Ratios on NFA Forms PQR and PR

Posted in CFTC
National Futures Association (NFA) has issued a notice to commodity pool operator (CPO) and commodity trading advisor (CTA) members clarifying the method by which CPOs and CTAs should calculate the Current Asset/Current Liability (CA/CL) ratios and the Total Revenue/Total Expenses (TR/TE) ratios for purposes of NFA Forms PQR and PR.… Continue Reading

FinCEN Issues Advisory on FATF-Identified Jurisdictions With AML/CFT Deficiencies

Posted in CFTC
The Financial Crimes Enforcement Network (FinCEN) issued an advisory to announce that the Financial Action Task Force (FATF) updated its list of jurisdictions with strategic anti-money laundering and combatting the financing of terrorism (AML/CFT) deficiencies. In the advisory, FATF has removed Iraq and Vanuatu from the list and added Pakistan to the list. The advisory… Continue Reading

NFA and FIA Launch Training Course on Safeguarding Customer Funds

Posted in CFTC
National Futures Association (NFA), Futures Industry Association (FIA) and other industry professionals have collaborated to launch an FIA training course on safeguarding customer funds. The course, which is designed to assist futures commission merchants in meeting their training requirements under Commodity Futures Trading Commission Rule 1.11, covers the basics of segregation, residual interest, investment of… Continue Reading

SEC Amends Disclosure Obligations in Municipal Securities Market

Posted in Broker-Dealer
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… Continue Reading

SEC Disapproves Bitcoin Exchange-Traded Products

Posted in Broker-Dealer
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… Continue Reading

CFTC Permits DCOs to Invest Customer Funds in European Sovereign Debt

Posted in CFTC, Derivatives
The Commodity Futures Trading Commission has issued an order granting limited relief from the provisions of CFTC Rule 1.25 that will allow derivatives clearing organizations (DCOs) to invest euro-denominated futures and cleared swap customer funds in euro-denominated sovereign debt issued by France and Germany. Among other requirements, the order provides that the dollar-weighted average of… Continue Reading

Regulators Publish Changes to the Volcker Rule

Posted in Banking, CFTC, Dodd-Frank Developments
On July 17, the Federal Register published proposed changes to the Volcker Rule that were jointly approved by the Federal Reserve Board, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Securities and Exchange Commission. As described in greater detail in the June 1,… Continue Reading

CFTC Issues Customer Advisory on Digital Coins and Tokens

Posted in CFTC, Digital Assets and Virtual Currencies
The Commodity Futures Trading Commission has issued an advisory warning customers of the dangers of purchasing digital coins or tokens. Among other things, the advisory warns customers that buying digital coins or tokens for speculative purposes carries significant risk and identifies various factors that could affect the current or longer-term value of a digital coin… Continue Reading

CFTC Votes on a Final Rule and Two Proposed Rule Amendments

Posted in CFTC
On June 4, the Commodity Futures Trading Commission voted to approve a final rule to amend various portions of Part 49 of CFTC Regulations relating to swap data repository indemnification and related matters. The CFTC also voted to approve two rule proposals, including (1) proposed amendments relating to Volcker Rule restrictions on proprietary trading and… Continue Reading

CFTC Proposes To Maintain Swap Dealer Registration De Minimis Exception at $8 Billion

Posted in CFTC
The Commodity Futures Trading Commission is proposing various amendments to the de minimis exception from registration as a swap dealer. The de minimis exception provides that a person is not deemed to be a swap dealer unless its swap dealing activities exceed an aggregate gross notional amount of $8 billion measured over any 12-month period.… 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

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