Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

FINRA Issues Regulatory Notice Regarding Departing Registered Representatives

Posted in Broker-Dealer

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 the event of a registered representative’s departure, member firms are expected to promptly and clearly communicate to affected customers how their accounts will continue to be serviced so that customers can make informed decisions about their accounts. Second, member firms are expected to communicate clearly when asked questions by customers about the departing registered representative. Such communications should, for example, clarify that the customer has the choice to (1) retain his or her assets at the current firm and be serviced by a new registered representative assigned by the firm or chosen by the customer, or (2) transfer such assets to another firm. As with all customer communications, FINRA expects that the information provided by member firms about the departing registered representative is fair, balanced and not misleading.

The Notice is available here.

 

FINRA Proposes Rule Addressing Regulation NMS and Extraordinary Market Volatility

Posted in Broker-Dealer

On April 11, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to adopt FINRA Rules 6190 (Compliance with Regulation NMS Plan to Address Extraordinary Market Volatility) and 6121.01 (Resumption of Trading in Securities Subject to the Regulation NMS Plan to Address Extraordinary Market Volatility), which implement the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS (Limit Up-Limit Down Plan), on a permanent basis, consistent with the recent approval of the Limit Up-Limit Down Plan to operate on a permanent basis. The rule change was effective upon filing.

The text of the rule change is available here.

 

FINRA Proposes Rule Making Substantive, Organizational and Terminology Changes to the Corporate Financing Rule

Posted in Broker-Dealer

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. Continue Reading

FSB Publishes Directory of Cryptoassets Regulators

Posted in Digital Assets and Virtual Currencies

On April 5, the UK Financial Stability Board (FSB) published a directory of regulators and other authorities in FSB jurisdictions who cover cryptoasset issues.

The FSB delivered the directory to the April 2019 G20 Finance Ministers and Central Bank Governors meeting. It notes that the directory’s purpose is to provide information only—it does not define the regulatory scope or perimeter of the bodies it lists. The publication also summarizes the scope of the FSB’s interest.

The FSB’s publication forms part of the ongoing work on cryptoassets conducted by the FSB and standard-setting bodies, including its report on cryptoassets that it published in July 2018 (as reported in the July 20, 2018 edition of the Corporate & Financial Weekly Digest).

The directory is available here.

FCA and SEC Sign Updated Memoranda of Understanding

Posted in Brexit, Brexit/UK Developments, Derivatives, Financial Markets, SEC/Corporate, UK Developments

On March 29, the UK Financial Conduct Authority (FCA) issued a press release announcing that it has signed two updated memoranda of understanding (MOUs) with the Securities and Exchange Commission. Both MOUs aim to ensure the continued ability of the United Kingdom and the United States to cooperate and consult with each other regarding the effective and efficient oversight of regulated entities across national borders. 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, on an accelerated basis. Continue Reading

CFTC Issues No-Action Relief for Prime Brokerage Trading on SEFs

Posted in CFTC, Derivatives

The Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission has issued no-action relief to swap dealers (SDs) for certain swaps with prime brokerage customers where the customer initiates the swap by executing a trade as agent for the SD on a swap execution facility (SEF). 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 of the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) and is designed to provide additional guidance in areas that the SEC has not previously addressed. 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 the Securities Exchange Act of 1934. In issuing its response that it would not recommend enforcement action to the SEC, the Division noted that: Continue Reading

FCA Confirms Final Rules and Guidance for Firms for No-Deal Brexit

Posted in Brexit, Brexit/UK Developments, Financial Markets, UK Developments

On March 29, the UK Financial Conduct Authority (FCA) issued a press release announcing that it had published its final instruments and guidance that will apply if the United Kingdom withdraws from the European Union without a deal or an implementation period (No-Deal Brexit). Continue Reading