Tag: Brokers and Intermediaries

FINRA reminds broker-dealers of requirements for participating in contingency offerings

In a recent regulatory notice, FINRA Notice 16-08, FINRA noted that its review of securities offering documents has revealed instances in which broker-dealers have not been complying with the contingency offering requirements of Rules 10b-9 and 15c2-4 under the Securities Exchange Act of 1934.  The most common type of contingency offerings are referred to as … Continue Reading

SEC publishes 2016 exam priorities

On January 11, 2016, the SEC published its Office of Compliance Inspections and Examinations’ (“OCIE”) 2016 exam priorities.  The exam priorities address issues involving a variety of financial institutions, including investment advisers, broker-dealers, transfer agents and clearing agencies.  OCIE selected its priorities after discussions with the SEC’s Commissioners, the SEC’s policy divisions and regional offices, … Continue Reading

SEC Adopts Regulation Crowdfunding

  The SEC recently adopted rules that allow companies to offer and sell securities through crowdfunding.  The Jumpstart Our Business Startups Act (the “JOBS Act”), enacted in 2012, established a regulatory framework for startups and small businesses to raise capital through securities offerings using crowdfunding. The SEC’s rules that implement this framework, referred to as … Continue Reading

SEC Adopts Registration Rules for Security-Based Swap Dealers and Major Security-Based Swap Participants

The SEC recently adopted new rules that outline the registration process for security-based swap dealers and major security-based swap participants (“SBS Entities”).  Section 764 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) amended the Securities Exchange Act of 1934 (the “Exchange Act”) to require the registration of SBS Entities with the … Continue Reading

FINRA issues guidance on its research conflict of interest rules

On May 27, 2015, the Financial Industry Regulatory Authority (“FINRA”) issued a new set of FAQs to provide guidance with respect to its research rule, NASD Rule 2711.   The FAQs specifically focus on NASD Rule 2711(c)(4) and Rule 2711(e).  NASD Rule 2711(c)(4) generally prohibits research analysts from participating in efforts to solicit investment banking … Continue Reading

FINRA’s National Adjudicatory Council revises Sanction Guidelines for misrepresentations and suitability rule violations

FINRA’s National Adjudicatory Council (“NAC”) has revised its Sanction Guidelines that outline particular securities industry rule violations and the range of disciplinary sanctions that may result from such rule violations.  The revised Sanction Guidelines involve violations of misrepresentation and suitability rules and take effect immediately.  These revisions are part of the NAC’s periodic review of … Continue Reading

SEC adopts cross-border security-based swap rules

This Summer, the Securities and Exchange Commission (SEC) adopted long-awaited rules on cross-border security-based swap activities.  The SEC’s rules provide:  1) an explanation of when a cross-border transaction must be counted towards the requirement to register as a security-based swap dealer (SBSD) or major security-based swap participant (MSBSP), including transactions guaranteed by a US person … Continue Reading

SEC approves FINRA rule that prohibits conditioning customer settlements on expungement from CRD system

The Securities and Exchange Commission (“SEC”) approved Financial Industry Regulatory Authority (“FINRA”) Rule 2081.  This rule prohibits a broker from conditioning the settlement of a customer dispute on, or otherwise compensating the customer for, the customer’s consent not to oppose the expungement of customer dispute information from the Central Registration Depository (the “CRD”).  These agreements … Continue Reading

The SEC proposes to extend temporary rule on principal trades with certain advisory clients

The Securities and Exchange Commission (“SEC”) has proposed to extend temporary Rule 206(3)-3T under the Investment Advisers Act of 1940 (the “Advisers Act”) from December 31, 2014 until December 31, 2016. Rule 206(3)-3T establishes an alternative means for registered investment advisers that are also registered as broker-dealers (“Dual Registrants”) to meet the requirements of Section … Continue Reading

CFTC staff allows UK investment firms licensed as banks to hold US customer margin on foreign futures as bank deposits

Staff of the Commodity Futures Trading Commission (CFTC) has issued an Interpretation permitting futures commission merchants (FCMs) to deposit US customer funds margining foreign futures and options positions with UK investment firms that are licensed deposit-taking banks as bank deposits. CFTC customer protection rules Part 30 of the CFTC’s regulations governs the offer and sale … Continue Reading

SEC settles enforcement action against hedge fund for retaliation against whistleblower

On June 16, 2014, the Securities and Exchange Commission (the “SEC”) announced a $2.2 million settlement against an investment adviser that engaged in prohibited principal transactions and then retaliated against the employee who reported this misconduct to the SEC.  This was the first time the SEC had filed a case under its new authority to … Continue Reading

Investor Advocate recommends “user fees” for investment advisers

On August 19, 2014, Rick A. Fleming, the head of the Office of the Investor Advocate of the Securities and Exchange Commission (the “SEC”), gave a speech at the 38th Annual Southwest Securities Conference, in which he urged Congress to authorize the SEC to collect an annual “user fee” from registered investment advisers that would … Continue Reading
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