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On February 24, acting Chair of the Securities and Exchange Commission Allison Herren Lee issued a statement that she has directed the Division of Corporation Finance (the “Staff”) to focus on climate-change disclosures in public company filings. Referencing the SEC’s guidance on climate-change disclosure previously issued in 2010, she stated that the Staff will begin reviewing climate-change disclosures to evaluate compliance with the guidance and disclosure obligations under the federal securities laws, engaging with public companies and considering how the market is managing climate-related risks. In her statement, Chair Lee emphasized that investors are increasingly considering climate-related issues in making their investment decisions, and that it is the SEC’s duty to make sure that investors have access to material information when making those decisions.
Continue Reading Acting SEC Chair Issues Statement on Climate-Change Disclosures

In response to a recent request by the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission has issued an order (the Order) designed to ease potential burdens that smaller broker-dealers may face in obtaining audit services. Rule 17a-5(d)(1)(i) of the Securities Exchange Act of 1934 (Exchange Act) requires that, unless a broker meets…

Pursuant to a Securities and Exchange Commission order, the Financial Industry Regulatory Authority (FINRA) established an accounting support fee to fund the annual budget of the Governmental Accounting Standards Board (GASB). Each quarter, FINRA collects a quarter of the annual GASB accounting support fee from its member firms. Each member firm’s assessment is based on…

On February 8, the staff of the SEC’s Division of Corporation Finance (the Staff) published a sample comment letter that the Staff might send to companies that conduct securities offerings during periods of extreme stock price volatility.
Continue Reading SEC Staff Releases Sample Comment Letter on Securities Offerings During Periods of Market and Price Volatility

On February 4, the Securities and Exchange Commission published a request for public comment (Comment Request) on potential reform measures to improve the resilience of money market funds, as highlighted in a report of the President’s Working Group on Financial Markets issued in December 2020 (Report).
Continue Reading SEC Requests Comment on Potential Money Market Fund Reform Options Highlighted in President’s Working Group Report

On February 1, the Financial Industry Regulatory Authority (FINRA) published its 2021 Report on FINRA’s Examination and Risk Monitoring Program (Report). The annual Report summarizes various findings and observations from recent FINRA examinations of its member firms on a range of topics and notes certain areas of the future focus of FINRA examinations in 2021.
Continue Reading 2021 Report on FINRA’s Examination and Risk Monitoring Program

On January 27, Allison Herren Lee, the acting chair of the Securities and Exchange Commission, announced the European Commission’s (EC) adoption of an equivalence decision, stating that the SEC’s regulatory framework applicable to central counterparties (CCPs) that are “covered clearing agencies” under SEC rules is equivalent to relevant European legal and regulatory requirements.
Continue Reading European Commission Adopts Equivalence Decision With Respect to SEC Regulatory Framework for Central Counterparties

On January 22, the UK’s Financial Conduct Authority (FCA) published an amended and restated memorandum of understanding (MoU) between itself and the US Securities and Exchange Commission (SEC) in light of the UK’s withdrawal from the EU.

The key understandings discussed by the FCA and SEC in the MoU include:
Continue Reading FCA Publishes SEC MoU on Financial Services Supervision Post-Brexit

In December 2020, President Donald Trump signed into law the Holding Foreign Companies Accountable Act (the HFCAA). The HFCAA requires auditors of foreign companies that are publicly traded in the US to allow the Public Company Accounting Oversight Board (PCAOB) to inspect the auditors’ audit work papers for audits of non-US operations. If a company’s auditors fail to comply with the inspection requirement for three consecutive years, trading in such foreign company’s securities would be prohibited in US markets. The HFCAA also amends the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), mandates that the Securities and Exchange Commission identify foreign issuers that use an audit firm that is located in a foreign jurisdiction in which the PCAOB is restricted from inspecting or investigating the audit firm, and imposes additional SEC disclosure requirements on such foreign issuers.
Continue Reading Holding Foreign Companies Accountable Act Signed Into Law by President Trump

On December 22, 2020, the Financial Industry Regulatory Authority (FINRA) filed a rule change with the Securities and Exchange Commission that further postpones the implementation of mandatory margin for Covered Agency Transactions under FINRA Rule 4210 until October 26.
Continue Reading FINRA Postpones Implementation of Mandatory Margin for Covered Agency Transactions