The Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) released its annual list of 2020 Examination Priorities on Jan. 7, 2020. Many of OCIE’s 2020 examination priorities, including the focus on retail investors, fraud, conflicts (and related disclosures), among others, are perennial risk areas that OCIE routinely prioritizes.
Brokers
SEC/FINRA Joint Statement on Broker-Dealer Custody of Digital Assets
By Rebecca G. DiStefano on
The SEC’s Division of Trading and Markets and the Office of the General Counsel of FINRA (Financial Industry Regulatory Authority) published on July 8, 2019, a joint staff statement (Custody Release) on broker-dealer custody of digital assets. The statement has been eagerly awaited by market participants, including broker-dealers, given significant uncertainty in the application of…
SEC Approves Final Regulation Best Interest, Form CRS
On June 5, 2019, the Securities and Exchange Commission (SEC) voted 3-1 to adopt a series of proposals intended to “substantially enhance” the standards of conduct for financial professionals.
First and foremost, the SEC adopted Regulation Best Interest (Reg BI), a new rule establishing an updated standard of conduct for broker-dealers and associated persons of…
When Can Futures Commission Merchants and Broker-Dealers Be Deemed Banks?
On March 21, 2019, in Whitaker v. Wedbush Securities, an Illinois appellate court for the first time addressed the liability of a futures commission merchant (FCM) or broker-dealer (BD) under Section 4A-105 of the Uniform Commercial Code (UCC).
By way of background, a customer of an FCM dually registered as a BD ostensibly requested…
Colorado Digital Token Act Exempts Certain Cryptocurrency Transactions From Colorado Securities Laws
Colorado recently passed legislation that will facilitate the sale and transfer of digital tokens in Colorado. Under the Digital Token Act, Colorado businesses will be permitted to effect transactions involving the sale and transfer between certain persons of digital tokens secured through a decentralized ledger or database, with a focus on the production, distribution, and…
FINRA Plans Major Changes to Expungement Rules
By John K. Wells on
FINRA recently issued Notice to Members 17-42, which proposes sweeping changes to the process by which a securities broker may seek to expunge reference to a customer complaint from his or her public record. The comment period for the proposed rule amendments ended on Feb. 5, 2018. The proposed changes will now to go…
EU Proposes New Rules to Manage Leverage and Derivative Exposure for Funds – Are Asset Managers Ready?
By Nanette Aguirre on
Posted in Brokers, European Union
The European Systemic Risk Board (the Board) published a recommendation that the European Union should adopt rules to prevent funds from taking on excessive debt and from allocating inadequate reserves to compensate for assets that are hard to sell. The board went so far as to suggest stronger liquidity stress tests, improved liquidity management and…
Nanette Aguirre to Speak at the Meeting of the Americas 2017 Conference
By Greenberg Traurig on
Greenberg Traurig Shareholder Nanette Aguirre will participate in The Florida Alternative Investment Association (FLAIA) Meeting of the Americas 2017 Conference on Thursday, Oct. 19, in Miami, Florida. The conference will bring together investors, allocators, and fund managers from the United States, Latin America, and Canada to discuss opportunities, debate the substantive issues surrounding the current…
SEC and FINRA Continue to Root Out Bad Brokers
By William Mack & Dale Rose Goldstein on
On Thursday, July 27, regulators and industry professionals gathered in Washington, D.C. to discuss the current regulatory environment, cybersecurity, and other hot topics at the SEC and FINRA’s 2017 National Compliance Outreach Program for Broker-Dealers. The panelists, including SEC Commissioner Michael Piwowar, FINRA President and CEO Robert Cook, and Susan Axelrod, the Executive Vice President…
FINRA Sends Targeted Exam Letter Concerning the Sale of Non-Traded Business Development Companies
By John K. Wells on
FINRA recently sent a sweep letter (or targeted exam letter) to select broker dealers, inquiring about those firms’ sale of non-traded Business Development Companies (BDCs). BDCs are SEC-registered investment companies (usually closed-end funds) that pool investor funds in a debt or equity portfolio (typically of small- or medium-sized companies), with the objective of generating income…