On February 24, 2021, Securities and Exchange Commission ("SEC") Acting Chair Allison Herren Lee issued a Statement on the Review of Climate-Related Disclosure in which she directed the SEC's Division of Corporation Finance...more
The Situation: The term "accredited investor" under the Securities Act of 1933 ("Securities Act") is used to establish the eligibility of investors to participate in offerings conducted under the most frequently used private...more
The Situation: Title II of the Dodd-Frank Act created an insolvency framework for the orderly liquidation of large financial companies, including SEC-registered broker-dealers, if certain financial distress and systemic risk...more
The Situation: Throughout the COVID-19 pandemic, the U.S. Securities and Exchange Commission's Office of Compliance Inspections and Examinations ("OCIE") has continued to operate via off-site examinations and remote working...more
On August 5, 2020, FINRA published Regulatory Notice 20-26, summarizing the results of a survey FINRA conducted of a representative cross-section of member firms, including firms with significant trading volumes or positions...more
Recent measures from U.S. lawmakers and Nasdaq to impose additional requirements on U.S.-listed China-based companies could have wider implications.
On May 20, 2020, the U.S. Senate unanimously passed the Holding Foreign...more
7/13/2020
/ China ,
China Securities Regulatory Commission (CSRC) ,
Corporate Governance ,
Disclosure Requirements ,
Foreign Governments ,
Listing Standards ,
Nasdaq ,
NYSE ,
PCAOB ,
Popular ,
Publicly-Traded Companies ,
Regulatory Oversight ,
Securities and Exchange Commission (SEC) ,
Securities Regulation
The Situation: The SEC's Office of Compliance Inspections and Examinations ("OCIE") intends to examine registrants to assess preparation for the expected discontinuation of LIBOR and the transition to alternative reference...more
The U.S. Securities and Exchange Commission ("SEC") has granted a temporary exemption from broker registration for certain activities by municipal advisors.
On June 16, 2020, the SEC issued a temporary conditional...more
As of June 30, 2020, all broker-dealers with retail customers must comply with Reg BI, and all broker-dealers and investment advisers must comply with Form CRS requirements with respect to their retail customers/investors....more
The situation: Investors are increasingly focused on environmental, social, and governance ("ESG") factors when opening investment accounts and/or making investment decisions.
The result: Most guidance regarding ESG...more
The Situation: The U.S. Securities and Exchange Commission's ("SEC") Office of Compliance Inspections and Examinations ("OCIE") issued its 2020 examination priorities ("Exam Priorities").
The Result: The Exam Priorities...more
1/27/2020
/ Anti-Money Laundering ,
Broker-Dealer ,
Compliance ,
Cybersecurity ,
ETFs ,
Financial Industry Regulatory Authority (FINRA) ,
Investment Adviser ,
MSRB ,
Municipal Advisers ,
Mutual Funds ,
OCIE ,
Regulation SCI ,
Retail Investors ,
Robo-Advisors ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Self-Regulatory Organizations
The Situation: The Municipal Securities Rulemaking Board ("MSRB") amended its rules regarding primary offering practices and disclosures in connection with primary offerings to enhance regulatory transparency, ensure equal...more
On October 28, 2019, the SEC's Division of Trading and Markets granted no-action relief for a limited period of time to Paxos Trust Company, LLC from registration as a clearing agency under Section 17A(b)(1) of the Securities...more
On October 11, 2019, the heads of the U.S. Commodity Futures Trading Commission ("CFTC"), the U.S. Securities and Exchange Commission ("SEC"), and the Financial Crimes Enforcement Network ("FinCEN"), issued a joint statement...more
10/23/2019
/ AML/CFT ,
Anti-Money Laundering ,
Bank Secrecy Act ,
Broker-Dealer ,
CFTC ,
Cryptocurrency ,
Digital Assets ,
Financial Institutions ,
FinCEN ,
Joint Statements ,
Money Services Business ,
New Guidance ,
Securities and Exchange Commission (SEC) ,
Suspicious Activity Reports (SARs)
In September 2019, the Securities and Exchange Commission ("SEC") charged a non-U.S. financial services firm for providing brokerage services to investors in the United States without being registered as a broker-dealer or...more
10/15/2019
/ Broker-Dealer ,
Brokerage Accounts ,
Enforcement Actions ,
Foreign Investment ,
Institutional Investors ,
Non-US Entities ,
Registration Requirement ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations ,
Solicitation
The U.S. Securities and Exchange Commission ("SEC") is seeking comments on a proposed exemptive order granting a conditional exemption from broker registration requirements for certain activities of municipal advisors....more
10/11/2019
/ Comment Period ,
Disclosure Requirements ,
Exemptive Orders ,
Institutional Investors ,
Municipal Advisers ,
Municipal Securities Issuers ,
Municipal Securities Market ,
Proposed Regulation ,
Proposed Rules ,
Registration Requirement ,
Securities and Exchange Commission (SEC)
On August 7, 2019, the Financial Industry Regulatory Authority ("FINRA") issued a Regulatory Notice (the "Notice") intended to advise broker-dealers about the Securities and Exchange Commission's ("SEC") recently adopted...more
8/21/2019
/ Best Interest Standard ,
Broker-Dealer ,
Disclosure Requirements ,
Fiduciary Duty ,
Final Rules ,
Financial Industry Regulatory Authority (FINRA) ,
Form CRS ,
Investment Adviser ,
Investment Management ,
New Rules ,
Regulation Best Interest ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Standard of Conduct
The Situation: In a recently released joint statement ("Statement"), the Staffs of the U.S. Securities and Exchange Commission's ("SEC") Division of Trading and Markets, and the Financial Industry Regulatory Authority...more
8/5/2019
/ Blockchain ,
Broker-Dealer ,
Customer Protection Rule ,
Digital Assets ,
Digital Securities ,
Distributed Ledger Technology (DLT) ,
Financial Industry Regulatory Authority (FINRA) ,
Investor Protection ,
Joint Policy Statements ,
Rule 15c3-3 ,
Securities and Exchange Commission (SEC) ,
SIPA
The Situation: In recent years, broker-dealers have been seeking further transparency from the Financial Industry Regulatory Authority ("FINRA") on what constitutes "extraordinary" cooperation with its investigations and when...more
The Situation: The U.S. Securities and Exchange Commission ("SEC") has adopted: (i) new regulations relating to the relationship between broker-dealers and their retail customers; and (ii) interpretations of the standard of...more
7/5/2019
/ Best Interest Standard ,
Broker-Dealer ,
Fiduciary Duty ,
Form CRS ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
New Rules ,
Regulation Best Interest ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
Standard of Conduct
The D.C. Circuit’s decision is significant because certain SEC statutes require a finding of willfulness.
The U.S. Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") is raising the bar on "willful"...more
5/15/2019
/ Anti-Fraud Provisions ,
Conflicts of Interest ,
Disclosure Requirements ,
Form ADV ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Negligence ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Settlement Agreements ,
Statutory Requirements ,
Strict Liability ,
Willful Violations
Initial results of the SEC's Share Class Disclosure Initiative indicate a heightened focus on disclosures made to retail investors and consequences for any failure to self-report.
On February 12, 2018, the U.S. Securities...more
3/21/2019
/ Broker-Dealer ,
Conflicts of Interest ,
Disclosure Requirements ,
Investment Adviser ,
OCIE ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
Self-Reporting ,
Share Class Selection Disclosure Initiative (SCSD) ,
Wealth Management ,
White Collar Crimes
Earlier this year, the Financial Industry Regulatory Authority released its 2019 Annual Risk Monitoring and Examination Priorities Letter. These published priorities, together with the U.S. Securities and Exchange...more
In April 2018, the U.S. Securities and Exchange Commission ("SEC") released Regulation Best Interest, or Reg BI, a proposed rule that will require broker-dealers to operate in the best interest of their customers. Under Reg...more
1/3/2019
/ Best Interest Standard ,
Broker-Dealer ,
Conflicts of Interest ,
Consumer Financial Products ,
Cross-Border Transactions ,
Dodd-Frank ,
Duty of Care ,
Fiduciary Duty ,
Fiduciary Rule ,
Foreign Investment ,
Investment Adviser ,
Proposed Regulation ,
Securities and Exchange Commission (SEC) ,
Wealth Management
The Securities and Exchange Commission has amended its rules to require broker-dealers to disclose more information about their order routing practices. The changes are intended to help investors better understand how their...more