Stanley V. Polit

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On November 5, the Commodity Futures Trading Commission (CFTC) approved Foreign Board of Trade (FBOT) registration applications for three non-US exchanges to allow their members and other US participants to enter orders directly into their respective trade matching systems. The FBOTs receiving such approvals were: 1) Euronext Amsterdam N.V.; 2) Euronext Paris SA; and 3) the European Energy Exchange of Germany, bringing the total number of FBOTs registered with the CFTC to 21.…
Continue Reading CFTC Approves Three Foreign Board of Trade Applications

On November 1, the National Futures Association (NFA) issued Notice to Members I-19-22, announcing that NFA’s Swap Proficiency Requirements would launch and become accessible online on January 31, 2020 (Swap Proficiency Requirements). Each NFA Member with associated persons required to take the Swap Proficiency Requirements must designate at least one Swaps Proficiency Requirements Administrator who…

On October 1, the Securities and Exchange Commission proposed an amendment to Regulation NMS that would rescind a rule exception that allows a national market system plan (NMS Plan) amendment to be effective upon filing if it establishes or changes a fee or other charge (Proposal). …
Continue Reading SEC Proposes to Require Proposed NMS Plan Fee Amendments to Follow Public Notice, Comment and Approval Procedure

On October 8, the Financial Industry Regulatory Authority (FINRA) announced the availability of new resources to assist member forms to comply with the Securities Exchange Commission’s Regulation Best Interest (Reg BI) and Form CRS by the June 30, 2020 compliance deadline. Reg BI establishes a “best interest” standard of conduct for broker-dealers and associated persons when making recommendations to a retail customer in connection with a securities transaction or investment strategy involving securities. In addition to the Reg BI requirements, the SEC also adopted a new rule to require broker-dealers and investment advisers to provide retail investors with a brief relationship summary known as the Form CRS.
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Continue Reading FINRA Provides Member Firms with New Reg BI and Form CRS Resources

On September 9, the Market Risk Advisory Committee of the Commodity Futures Trading Commission (CFTC) approved some “plain” English disclosures concerning the risks of executing new derivative transactions involving interbank offered rates (IBORs) that will be replaced by new benchmark rates in the relatively near future. The disclosures, which are not mandatory, are intended as “helpful examples” of the information that market participants should share, as appropriate, with all clients and counterparties with whom they continue to transact derivatives referencing London Interbank Offered Rate (LIBOR) and other IBORs. They are drafted for use on a transaction-by-transaction basis, but alternatively can be delivered as part of general risk disclosures. The disclosures will be submitted to the CFTC for consideration.…
Continue Reading CFTC Market Risk Advisory Committee Approves Plain English IBOR Risk Disclosures

On September 13, the Commodity Futures Trading Commission (CFTC) announced the extension of the public comment periods for two rule proposals. First, the CFTC announced that it will extend the comment period from September 17 to November 18 for the proposed alternative compliance framework for derivatives clearing organizations (DCOs) organized outside of the United States that do not pose substantial risk to the US financial system (Alternative Compliance Framework Proposal). Under the Alternative Compliance Framework Proposal, these DCOs would be able to register with the CFTC, yet comply with the core principles applicable to DCOs in the Commodity Exchange Act through their compliance with the regulatory regime of their home country, subject to certain conditions and limitations.…
Continue Reading CFTC Extends Public Comment Period for Proposed Rules Pertaining to Cross-Border Clearing

On September 13, the CFTC and European Commission issued a joint statement reaffirming their mutual commitment to transatlantic cooperation among regulators (Joint Statement). The Joint Statement was released following a September 5 meeting between CFTC Chairman Heath Tarbert and John Berrigan, Deputy Director General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA), European Commission.…
Continue Reading CFTC and European Commission Issue Joint Statement Following Meeting on Cross-Border Derivatives Regulatory Issues

On September 16, the Commodity Futures Trading Commission (CFTC) unanimously approved 1) a final rule on security futures product (SFP) position limits and position accountability for (Final Rule); and 2) a proposed rule on public rulemaking procedures (Proposed Rule).…
Continue Reading CFTC Unanimously Approves Measures Related to Position Limits and Position Accounting for Security Futures Products and Public Rulemaking Procedures

On August 16, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 19-28 (Notice) reminding member firms of their supervisory obligations under FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) if they 1) hold or transact in customer accounts owned by municipal entities or obligated persons (i.e., municipal clients), as defined in Section 15B of the Securities Exchange Act of 1934, as amended; and 2) participate in investment-related activities with municipal clients (e.g., recommending or selling non-municipal securities products to such municipal clients).…
Continue Reading FINRA Issues Guidance on Member Firms’ Supervisory Obligations When Participating in Investment-Related Activities With Municipal Clients

On July 18, the Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 19-24 (Notice), which encourages member firms to continue notifying their Regulatory Coordinators about their digital assets activities. The Notice extends the requested notification period originally set forth in Regulatory Notice 18-20 from July 31, 2019 to July 31, 2020. (For additional information regarding…