July 11, 2013
In its open meeting on July 10, 2013, the SEC lifted the ban on general solicitation and advertising for certain private placements under Rule 506 and Rule 144A. These amendments to the rules become effective 60 days after they are published in the Federal Register. Broker-dealers should note that…
July 10, 2013
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
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…
July 2, 2013
On March 28, 2013, in SEC v. Benger, the U.S. District Court for the Northern District of Illinois held that the registration requirements under Section 15(a) of the Exchange Act do not apply to foreign transactions. As a consequence of this holding, brokers and dealers based in the United States whose activities are limited solely to foreign sales of stock (and whose activities fall under the jurisdiction of the Northern District of Illinois) are not required to be registered with the SEC. There is a possibility that the SEC will appeal this decision in the near future.
June 27, 2013
On May 29, 2013, the SEC charged NASDAQ and NASDAQ Execution Services (“NES”), a registered broker-dealer affiliated with the exchange, with violations of securities laws and regulations due to inadequate systems and poor decision-making during the IPO and preliminary secondary market trading of Facebook. Without admitting to or denying SEC findings, NASDAQ has agreed to settle the charges for $10 million—the largest penalty ever imposed on an exchange. NASDAQ has also agreed to implement changes to systems and processes, including technical improvements to its cross systems, additional processes for ensuring compliance with Regulations NMS and SHO, increased oversight for new systems, an enlarged Regulatory Group, an engineering team dedicated to system monitoring and analysis, and improved software for all technology personnel. Pursuant to the settlement order, the SEC has reserved the right to request evidence of the satisfactory completion of these undertakings should it be deemed necessary.
June 26, 2013
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 17, 2013
SEC Grants No-Action Relief Permitting German-based Strategy Consulting Firm to Engage in M&A Activities with U.S. Targets without Registering as Broker-Dealer
The SEC has granted no-action relief to Roland Berger Strategy Consultants (“Roland Berger” or the “Firm”) stating that it would not recommend enforcement action under Section 15(a) of the Exchange Act if Roland Berger were to engage in certain activities without registering as a broker or dealer. Roland Berger is an independent strategy consultancy firm based in Germany that engages in a wide range of services on behalf of non-U.S. clients. The majority of services that Roland Berger provides do not qualify as “broker” activities, but the Firm is occasionally involved in international M&A activities that may require registration as a broker-dealer under the Exchange Act.
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.
June 3, 2013
May 29, 2013
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.