Susan Light

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On July 16, the Financial Industry Regulatory Authority (FINRA) published separate guidance related to the public offering review process (Public Offering Guidance) and private placement filings (Private Placement Guidance). FINRA rules impose a number of obligations on member firms participating in the distribution of shares in a public offering. The Public Offering Guidance outlines, among other items, the use of FINRA’s Public Offering System, the handling of potential conflicts of interest related to a public offering and the types of public offering reviews available from FINRA’s Corporate Financing Department. Similarly, the Private Placement Guidance summarizes FINRA rules related to private placements, including the corresponding filing requirements, and provides guidance with respect to compliance with the rules. Both sets of guidance also include an outline of FINRA’s review process and provide links to additional resources.
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On July 8, in response to questions raised by market participants regarding the application of federal securities laws and the Financial Industry Regulatory Authority (FINRA) rules to the custody of digital asset securities and transactions, the staffs of the Division of Trading and Markets (the Division) and FINRA issued a joint statement. The joint statement seeks to articulate and clarify various considerations pertinent to many of the questions raised, particularly with respect to the Securities and Exchange Commission’s Customer Protection Rule applicable to SEC-registered broker-dealers.…
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On July 9, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 19-22 (the Notice) requesting comment on a proposal to publish alternative trading system (ATS) volume data for corporate bonds and agency debt securities, in a format similar to that currently published for equity securities. The published data would include both the total number of transactions and aggregate dollar volume traded for transactions in a particular corporate bond or agency debt security executed within the ATS and reported to FINRA during the aggregation period. The ATS data would be aggregated on a monthly basis and published with a three-month delay. FINRA would not charge for the aggregated ATS fixed income data, which would be published on FINRA’s website.…
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On July 11, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 19-23 (the Notice) to restate and supplement prior guidance regarding the circumstances by which a firm or individual may influence the outcome of an investigation by exhibiting extraordinary cooperation. The Notice incorporates FINRA’s prior guidance and further clarifies how FINRA defines “extraordinary cooperation” and whether a potential respondent’s cooperation rises to such a level, as distinct from the level of cooperation expected of all member firms and their associated persons.…
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On June 21, the Securities and Exchange Commission adopted a package of new rules and rule amendments to establish capital, margin and segregation requirements under Title VII of the Dodd-Frank Act.

The new rules address the following areas:

  • Capital requirements for security-based swap dealers (SBSDs) and major security-based swap participants (MSBSP), for which there is not a prudential regulator (nonbank SBSDs and MSBSPs).
  • Capital requirements for broker-dealers that trade security-based swaps or swaps and are not registered as an SBSD or MSBSP.
  • Minimum net capital requirements for broker-dealers that use internal models to compute net capital.
  • Margin requirements for nonbank SBSDs and MSBSPs with respect to non-cleared security-based swaps.
  • Segregation requirements for SBSDs and stand-alone broker-dealers for cleared and non-cleared security-based swaps.

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On June 20, the Financial Industry Regulatory Authority (FINRA) filed with the Securities and Exchange Commission proposed amendments to FINRA Rule 2210 (Communications with the Public) and FINRA Rule 2241 (Research Analysts and Research Reports) required by the Fair Access to Investment Research Act of 2017.

The proposed amendments would eliminate the “quiet period” for…

On June 5, the Securities and Exchange Commission voted to adopt a package of rules and interpretations designed to enhance the quality and transparency of retail investors’ relationships with investment advisers and broker-dealers. Specifically, the SEC approved Regulation Best Interest.…
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On May 30, the Securities Exchange Commission approved amendments to the Financial Industry Regulatory Authority’s customer and industry arbitration rules to expand the time period for non-parties to respond to arbitration subpoenas and orders of appearance of witnesses or production of documents. …
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