In our previous alert, Paying for Buy-Side Investment Research: Will the FCA’s Third Way Ease the US-UK Divide?, we discussed the consultation issued by the Financial Conduct Authority (FCA) on proposed rules on payment...more
7/30/2024
/ AIFM ,
Amended Rules ,
Broker-Dealer ,
False Claims Act (FCA) ,
Investment Adviser ,
Investment Management ,
Listing Rules ,
MiFID II ,
No-Action Letters ,
Proposed Rules ,
Research Funding ,
Securities and Exchange Commission (SEC) ,
UK
On 10 April 2024, the Financial Conduct Authority (FCA) published a Consultation Paper on payment optionality for investment research (CP24/7). CP24/7 followed the UK Investment Research Review, in which recommendations were...more
4/29/2024
/ AIFM ,
Broker-Dealer ,
Brokers ,
Consultation ,
Financial Conduct Authority (FCA) ,
Investment ,
Investors ,
Market Research ,
Proposed Rules ,
Research Funding ,
Securities and Exchange Commission (SEC) ,
UK
This amendment builds on FINRA’s recent willingness to relax the prohibition on the use of projections and targeted returns in the marketing materials broker-dealers deliver to institutional investors and qualified...more
2/29/2024
/ Affiliates ,
Broker-Dealer ,
Comment Period ,
Financial Industry Regulatory Authority (FINRA) ,
Institutional Investors ,
Internal Rate of Return (IRR) ,
Investment Company Act of 1940 ,
Investment Funds ,
Offering Statements ,
Past Performance ,
Policies and Procedures ,
Private Offerings ,
Private Placements ,
Proposed Rules ,
Regulation Best Interest ,
Retail Investors ,
Securities and Exchange Commission (SEC)
On January 23, 2024, FINRA announced the addition of new Supplementary Material .18 to FINRA Rule 3110 (Supervision) to adopt a voluntary, three-year remote inspections pilot program (Pilot Program) to allow eligible members...more
On January 9, 2024, FINRA published its 2024 Annual Regulatory Oversight Report (the “Report”). FINRA publishes the Report as a way to provide its broker-dealer members with insight into findings from FINRA’s Member...more
1/26/2024
/ Annual Reports ,
Artificial Intelligence ,
Broker-Dealer ,
Cryptoassets ,
Cybersecurity ,
Electronic Communications ,
Financial Crimes ,
Financial Industry Regulatory Authority (FINRA) ,
Form CRS ,
Regulation BI ,
Regulation SHO ,
Securities and Exchange Commission (SEC)
FINRA has offered a gift to member firms and fund managers just in time for the holiday season — but like a new puppy, the gift comes with a lot of responsibility. FINRA filed a proposed rule change to amend FINRA Rule 2210...more
On October 16, 2023, the SEC’s Division of Examinations (EXAMS) published its exam priorities for 2024. The timing is notable, with the release coming several months ahead of the typical timeline and only eight months after...more
10/26/2023
/ Broker-Dealer ,
Compliance ,
Cryptoassets ,
Cybersecurity ,
FinTech ,
Form CRS ,
Investment Adviser ,
Private Funds ,
Registered Investment Companies (RICs) ,
Regulation BI ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
The SEC continues its overhaul of cybersecurity, cyber incident reporting, and privacy controls and requirements for industry registrants, their services providers, and corporate America generally.
On March 15, 2023, the SEC...more
4/14/2023
/ Broker-Dealer ,
Compliance ,
Covered Entities ,
Cyber Incident Reporting ,
Cybersecurity ,
Data Disposal Protocols ,
Financial Industry Regulatory Authority (FINRA) ,
Incident Response Plans ,
Mutual Funds ,
Personal Information ,
Policies and Procedures ,
Proposed Rules ,
Registered Investment Advisors ,
Regulation S-P ,
Safeguards Rule ,
Securities and Exchange Commission (SEC) ,
Sensitive Personal Information
Firms would be able to treat private residences as non-branch offices instead of OSJs under certain circumstances. FINRA hopes to align its supervisory rules with current work-from-home practices....more
Previously registered representatives who missed the prior deadline now have until December 31, 2023 to enroll.
Registered brokerage representatives historically had two years from their Form U5 filing date to...more
The proposal would codify for the first time the federal-level best execution standard for brokers and related obligations. New Regulation Best Execution would result in a pivot from what has been a principles-based approach...more
SEC efforts to shorten the US securities settlement cycle come as no surprise, yet these changes will have profound implications for the industry, US and global financial markets, and financial services generally. The push to...more
The 2023 priorities letter represents only a sliver of the topics firms can expect exam teams to cover this year. In developing the priorities, SEC staff noted their outreach directly to state securities regulators and...more
The risk alert highlights deficiencies the staff identified during examinations and provides examples of weak practices observed at firms. EXAMS staff intends for the alert to assist broker-dealers in reviewing and enhancing...more
The SEC recently amended Exchange Act Rule 17a-4 by adopting new recordkeeping requirements for broker-dealers. Most notably, the SEC will no longer require broker-dealers to maintain records in “write once, read many” or...more
The SEC Division of Examinations recently published a risk alert summarizing observations from exams of registered investment advisers and broker-dealers related to compliance with Reg. S-ID, which is generally designed to...more
12/14/2022
/ Broker-Dealer ,
Customer Information ,
Data Protection ,
Data Security ,
Enforcement Actions ,
Enforcement Priorities ,
Identity Theft ,
Investment Adviser ,
Regulation S-ID ,
Risk Alert ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
The SEC Division of Examinations recently published a Risk Alert on quarterly reports required under Exchange Act Rule 606, which are published by broker-dealers to provide customers with insight into factors influencing...more
12/13/2022
/ Best Execution ,
Broker-Dealer ,
Disclosure Requirements ,
Information Reports ,
Public Comment ,
Public Meetings ,
Quarterly Report ,
Reporting Requirements ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
FINRA recently provided an update on the August 2021 review of its members’ practices and controls related to the opening of options accounts and related areas, including account supervision, communications, and diligence. ...more
Interest in engaging in a crypto business seems to be at an all-time high, including doing so in or through regulated and compliant businesses in traditional financial services firms. Brokers-dealers sit atop that list....more
FINRA recently published Regulatory Notice 22-23, providing guidance regarding firm and representative succession planning, including relevant FINRA rules and administrative processes and questions firms can consider when...more
The SEC recently adopted new recordkeeping requirements for broker-dealers and “SBS entities” (security-based swap dealers and major security based swap participants). Most notably, the SEC will no longer require...more
FINRA recently hosted a conference call with its smaller members covering Regulation Best Interest and Form CRS compliance. FINRA’s resounding message was that there is “no one-size-fits all” approach to Reg. BI...more
10/13/2022
/ Broker-Dealer ,
Compliance ,
Conflicts of Interest ,
Disclosure Requirements ,
Financial Industry Regulatory Authority (FINRA) ,
Form CRS ,
Investment Adviser ,
Investment Management ,
Regulation Best Interest ,
Regulation BI ,
Securities and Exchange Commission (SEC)
This article focuses on how the new Rule 206(4)-1 (the “Marketing Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”) affects the relationships between investment advisers registered with the U.S. Securities...more
10/4/2022
/ Advertising ,
Broker-Dealer ,
Compliance ,
Disclosure Requirements ,
Endorsements ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Marketing ,
New Rules ,
Policies and Procedures ,
Private Funds ,
Registered Investment Advisors ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Testimonial Statements
SEC staff recently served up a juicy staff bulletin covering the standards of conduct for broker-dealer and investment adviser conflicts of interest. The staff bulletin includes 13 Q&As categorized into five different...more
FINRA recently proposed amendments to FINRA Rule 3110 (Supervision) to adopt a voluntary, three-year pilot program (Pilot Program) to allow member firms to conduct remote branch office inspections. In a nod to where...more
8/17/2022
/ Broker-Dealer ,
Data Collection ,
Financial Industry Regulatory Authority (FINRA) ,
Inspections ,
Pilot Programs ,
Proposed Amendments ,
Public Comment ,
Remote Proceedings ,
Risk Assessment ,
Securities and Exchange Commission (SEC) ,
Supervision