United States

Topic: Retail

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Federal Reserve Board clarifies “transaction monitoring costs” in its interchange fee rule

On August 10, 2015, the Federal Reserve Board issued a clarification on its reasoning for including “transaction monitoring costs” in the debit card interchange fee standard rather than the separate fraud prevention adjustment. This clarification was issued at the direction of the US Court of Appeals for the District of Columbia which included the requirement … Continue Reading

US Treasury Department seeks comments on online marketplace lending

Noting the boom in online lending platforms, on July 20, 2015, the US Treasury Department published a “Request for Information” (RFI) seeking comments on the services, products and operational structure of online marketplace lending, which the RFI defined as small business and consumer lending through the use of “investment capital and data-driven online platforms.” The … Continue Reading

Banks restricted in robocalls and texts to customer cell phones without prior consent

On July 10, 2015, the Federal Communications Commission (FCC) released a 105 page omnibus declaratory ruling and order (“Order”) under the Telephone Consumer Protection Act (“TCPA”) that, among other things, permits banks and other financial institutions to call consumers on their wireless telephones using autodialer equipment and pre-recorded messages (“robocalls”) and also send texts without … Continue Reading

US Labor Department seeks public comment on conflict of interest and fiduciary proposal

On April 14th, the US Department of Labor (“DOL”) issued a release requesting comment on a proposed rule designed to mitigate the effects of conflicts of interest by advisers to IRA and 401(k) accounts — the principal types of US self-directed retirement plans. The comment period for the proposal ends on July 6, 2015, and … Continue Reading

CFPB proposes payday lender regulation

The US Consumer Financial Protection Bureau (CFPB), the US federal consumer finance agency, is considering proposing regulations to govern certain types of short-term loans to better protect consumers from falling into an ever-increasing,  seemingly never-ending, cycle of debt. The proposals under consideration would cover short-term credit with payment in full due within 45 days. These … Continue Reading

President directs Department of Labor to propose a fiduciary standard for brokers advising on retirement savings

On February 23, 2015, the White House announced that President Obama has directed the Department of Labor (DOL) to move forward with proposed rulemaking to require advisers, including broker-dealers, that provide advice regarding retirement plans that are subject to the Employee Retirement Income Security Act (ERISA), including Individual Retirement Accounts (IRAs), to observe a fiduciary … Continue Reading

SEC’s inspections office announces 2015 priorities

On January 13, 2015, the Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission (SEC) announced its 2015 examination priorities. OCIE’s priorities are grouped in three primary categories: 1. Retail investors and savings for retirement Fee selection and reverse churning. For investment advisers and firms registered as both broker-dealers and investment … Continue Reading

SEC’s inspections office announces 2015 priorities

On January 13, 2015, the Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission (SEC) announced its 2015 examination priorities: OCIE’s priorities are grouped in three primary categories: 1. Retail investors and savings for retirement Fee selection and reverse churning. For investment advisers and firms registered as both broker-dealers and investment … Continue Reading

FINRA releases 2015 regulatory and exam priorities

The Financial Industry Regulatory Authority (“FINRA”) released its annual regulatory and exam priorities letter for 2015 (the “Letter”). As it has done for the past ten years, FINRA outlined the areas in which its examiners will pay particular attention with respect to its inspections this year. The Letter notes challenges that FINRA has observed in … Continue Reading

CFPB finalizes alternative delivery method for privacy notices

On October 28, 2014, the Consumer Financial Protection Bureau (CFPB) published in the Federal Register its final rule allowing some banks and other financial institutions an alternative way to provide the annual privacy notices that they are required to provide customers by posting the notice on its website. This final rule was effective immediately upon … Continue Reading

Banking agencies propose changes to CRA guidance

The US federal banking agencies are seeking comments from the public on proposed revisions to their guidance on banks’ important obligations to address the credit needs of their low and moderate income customers. The Community Reinvestment Act (CRA) requires banks to address the credit needs of low and moderate income customers in their service areas. … Continue Reading

FINRA Board of Governors meeting addresses FINRA initiatives

The FINRA Board of Governors (the “Board”) met last week to discuss a number of upcoming rule proposals and initiatives, many which focus on high-frequency trading and market transparency. FINRA Chairman and CEO Rick Ketchum stated that he believes these proposals address Securities and Exchange Commission (“SEC”) Chair Mary Jo White’s call to action for … Continue Reading

SEC amends money market fund regulations

On July 23, 2014, the SEC adopted far-reaching amendments to the regulation of U.S. money market funds. See Securities Act Release No. 33-9616. The purpose of these reforms is stated to be: to address money market funds’ susceptibility to heavy redemptions in times of stress, improve their ability to manage and mitigate potential contagion from such … 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

FINRA initiates targeted examinations involving order routing and execution quality of customer orders

In July, the Trading Examinations Unit within the Trading and Financial Compliance Examinations group at the Financial Industry Regulatory Authority (FINRA), the principal US securities industry self-regulatory organization, published a targeted examination letter being sent to some FINRA member firms as part of a review of processes and procedures in connection with order routing and … Continue Reading

In response to an SEC directive, US exchanges and FINRA have proposed a wider tick size pilot for small cap stocks

In June, the Securities and Exchange Commission (SEC) directed that the US exchanges and the Financial Industry Regulatory Authority (FINRA) propose a joint plan for implementing a pilot test to analyze the effects of wider minimum quotation increments on market quality for small cap stocks. On August 27, the SEC published this joint plan with … 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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