October 25, 2013
SEC and FINRA Issue Proposed Rules on Crowdfunding
On October 23, 2013, the SEC in an Open Meeting issued proposed regulations enabling crowdfunding under Title III of the JOBS Act. The new regulation is called Regulation Crowdfunding and if finalized will create rules under the 33 Act and the 34 Act that we enable small businesses to raise capital with an exemption from registration of their securities.
September 5, 2013
The SEC Solicits Comments on a Proposed Rule Change Relating to Wash Sale Transactions and FINRA Rule 5210
On August 15, 2013, FINRA filed with the SEC a proposal to add supplementary material to FINRA Rule 5210 (Publications of Transactions and Quotations) to address members' obligations with respect to certain securities transactions that involve no change in the beneficial ownership of those securities, commonly known as "wash sales". On August 28, 2013, the SEC published a notice to solicit comments on the proposed rule change.
July 31, 2013
DC Circuit Court Remands Case to SEC for Reconsideration of Factors Mitigating Against Lifetime Ban of Registered Representative from Securities Industry
On June 11, 2013, the United States Court of Appeals for the District of Columbia Circuit (“DC Circuit”) ruled that the SEC abused its discretion in upholding a lifetime ban of registered representative John M. E. Saad from associating with any member firm by failing to adequately address all mitigating factors, and remanded the case to the SEC for reconsideration.
July 10, 2013
FINRA July Rulemaking Meeting
On July 10, 2013, FINRA Board of Governors will meet to consider the following items: ATS Reporting and Transparency—a proposal to require alternative trading systems to report aggregate transaction volume to FINRA and to use unique market participant identifiers; Broker-Check— a proposal to have non-FINRA member firms and their registered…
July 10, 2013
FINRA Issues Proposed Regulations Consolidating Supervision Rules
On June 21, 2013 FINRA filed proposed regulations with the SEC to adopt the consolidated FINRA supervision rules. These rules will integrate and harmonize NASD and NYSE rules on supervision. With this proposed rule change, FINRA continues its development of a FINRA consolidated rulebook. These proposed regulations will…
June 26, 2013
FINRA to Provide Rulebook Guidance for Limited Broker-Dealers
On June 11, 2013, FINRA’s Chief Legal Officer, Bob Colby, discussed potential regulatory revisions for limited purpose broker-dealers during an interview series entitled “A Few Minutes with FINRA.” Colby said that an internal review was underway to determine certain categories of broker dealers (i.e. broker-dealers that don’t touch funds or…
June 12, 2013
FINRA Fines Merrill Lynch $1.05 million and orders more than $323,000 in restitution for best execution violations in non-convertible preferred securities transactions
On April 16, 2013, FINRA announced that Merrill Lynch, the brokerage unit of Bank of America, will pay $1.05 million in fines and more than $323,000 in restitution for failure to provide best execution for trades involving non-convertible preferred securities executed on ML BondMarket, one of its proprietary order management systems, and for failure to have an adequate supervisory system and written supervisory procedures in place. Merrill’s Letter of Acceptance, Waiver and Consent, agreed to by FINRA on April 2, 2013, also includes other sanctions due to the violations occurring over nearly five years.
May 29, 2013
FINRA Will Have Surveillance Oversight of More than 90% of U.S. Equities Trading
Direct Edge announced that it has agreed to have FINRA provide market surveillance services to Direct Edge’s two licensed stock exchanges. It is believed the arrangement should go into operation in the fourth quarter of 2013.
February 27, 2013
FINRA 2013 Examination Priorities
On January 11, 2013, FINRA released its 2013 examination priorities letter. The letter identifies four primary categories as the focus of FINRA’s upcoming examinations and enforcement efforts – Business Conduct and Sales Practice Priorities, Insider Trading, Financial and Operational Priorities, and Market Regulation Priorities. Within…
January 28, 2013
2013 FINRA Exam Priorities
On January 11, 2013, FINRA released its 2013 examination priorities letter. Not surprisingly, FINRA will continue to prioritize core regulatory areas such as AML compliance and insider trading. FINRA will also continue to focus on suitability and complex products, highlighting in the letter FINRA’s recently revised suitability rule, and adding business development companies (“BDCs”) and closed-end funds to its list of complex products. FINRA warns that BDCs expose investors to significant market, credit and liquidity risks and the newer “non-traded BDC funds” can limit investors’ exit opportunities to “periodic share repurchases by the BDC at high discounts.” FINRA also warns that some closed-end funds are returning capital to maintain high distribution rates, causing the fund to trade at high premiums compared to the fund’s NAV.