Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Susan Light

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FINRA Launches Initiative to Simplify Firms’ Digital Experience With FINRA, Facilitating More Efficient and Effective Compliance Programs

Posted in Broker-Dealer
On May 14, the Financial Industry Regulatory Authority (FINRA) announced that it is launching an initiative designed to transform the digital platform used by firms to engage with FINRA across a variety of programs. The Digital Experience Transformation (the “Initiative”) is an effort to integrate and simplify the digital interactions between brokerage firms and FINRA.… Continue Reading

OCIE Issues Risk Alert on Investment Adviser and Broker-Dealer Compliance Issues Related to Regulation S-P

Posted in Broker-Dealer
On April 16, the Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission issued a Risk Alert providing a list of compliance issues related to Regulation S-P, the primary SEC rule regarding privacy notices and safeguard policies of investment advisers and broker-dealers. The issues proscribed in the Risk Alert were identified… Continue Reading

FINRA Publishes Consolidated Criteria to Designate Firms for Mandatory Participation in FINRA’s Business Continuity/Disaster Recovery Testing

Posted in Broker-Dealer
On April 19, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 19-15, addressing the criteria used by FINRA to designate member firms that are required to participate in FINRA’s annual business continuity and disaster recovery (BC/DR) testing. As required by Securities and Exchange Commission Regulation Systems Compliance and Integrity (Regulation SCI), FINRA adopted Rule… Continue Reading

FINRA Forms Office of Financial Innovation

Posted in Broker-Dealer
On April 24, the Financial Industry Regulatory Authority (FINRA) announced the formation of the Office of Financial Innovation, which will serve as a central point of coordination for issues related to significant financial innovations by FINRA member firms, particularly new uses of financial technology. The establishment of the Office of Financial Innovation is designed to… Continue Reading

FINRA Releases Report on 2018 Fine Monies

Posted in Broker-Dealer
On April 25, the Financial Industry Regulatory Authority (FINRA) issued a report relating to its use of fine monies collected in 2018. FINRA issued $61.0 million in fines, and incurred $81.1 million in fine-eligible expenditures (i.e., capital initiatives, strategic expenditures and other activities eligible to be funded by fine monies based on FINRA’s Financial Guiding… Continue Reading

Nasdaq Proposes Rule Change to SEC to Assume Operational Responsibility for Certain Investigation and Enforcement Functions Currently Performed by FINRA

Posted in Broker-Dealer
On April 3, the Securities and Exchange Commission published a notice to solicit comments on Amendment No. 2 to a proposed rule change filed by the Nasdaq Stock Market LLC, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934. The SEC also approved the proposed rule change, as modified by Amendment No. 2,… Continue Reading

SEC Releases Framework for “Investment Contract” Analysis of Digital Assets

Posted in Broker-Dealer, Digital Assets and Virtual Currencies
Recognizing the need for guidance as to the application of US federal securities law for those considering an Initial Coin Offering (ICO), or otherwise engaging in the offer, sale or distribution of a digital asset, the Securities and Exchange Commission released its Framework for “Investment Contract” Analysis of Digital Assets. The Framework represents the views… Continue Reading

SEC Issues TurnKey Jet, Inc. No-Action Letter

Posted in Broker-Dealer, Digital Assets and Virtual Currencies
On April 3, the Securities and Exchange Commission’s Division of Corporate Finance (the “Division”) responded to TurnKey Jet, Inc.’s (TKJ) letter dated April 2, requesting confirmation that the Division would not recommend enforcement action to the SEC in connection with its offer and sale of tokens without registration under the Securities Act of 1933 and… Continue Reading

Report from FINRA Board of Governors Meeting: Board Approves Rule Proposals, Engages with Boca Raton-Area Firms

Posted in Broker-Dealer
The Board of Governors of the Financial Industry Regulatory Authority (FINRA) met on February 28 and March 1 in Boca Raton, Florida, where it discussed the organization’s finances, reviewed several significant technology and other capital initiatives, and considered certain rulemaking items.… Continue Reading

SEC and New Jersey US Attorney’s Office Bring Parallel Charges in EDGAR Hacking Scheme

Posted in Broker-Dealer
On January 15, the Securities and Exchange Commission announced charges against nine defendants, alleging their participation in a previously disclosed scheme to hack into the SEC’s EDGAR system and extract nonpublic information to use for illegal trading. The SEC charged a Ukrainian hacker, six individual traders in California, Ukraine and Russia, and two entities. In… Continue Reading

FINRA Issues Regulatory Notice Regarding Updates to Supplemental Statement of Income

Posted in Broker-Dealer
On January 8, the Financial Industry Regulatory Authority issued a Notice advising its members of updates to the Supplemental Statement of Income (SSOI). The updates are designed to conform with amendments adopted by the Securities and Exchange Commission that simplify and update certain FOCUS reporting requirements applicable to broker-dealers. Pursuant to FINRA Rule 4524, the… Continue Reading

FINRA Issues Notice Related to Reporting Requirements for Auction Transactions

Posted in Broker-Dealer
On January 9, the Financial Industry Regulatory Authority issued a Notice to remind its members that they should not report auction transactions in US Treasury securities—including auction awards to either direct or indirect bidders—to the Trade Reporting and Compliance Engine (TRACE), as these transactions are excluded from the TRACE reporting requirements under FINRA Rule 6730(e)(8).… Continue Reading