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Category Archives: Broker-Dealer Regulation

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SEC Approves FINRA’s Rules to Protect Seniors from Financial Exploitation

Posted in Broker-Dealer Regulation, FINRA Enforcement

On March 30, 2017, the SEC approved the adoption of new FINRA Rule 2165 (Financial Exploitation of Specified Adults) (see our related blog post about the proposal).  Among other things, Rule 2165 permits brokers to place holds on disbursements of funds or securities from the accounts of “specified adult” customers.  Specified adults include those 65… Read More

Is it Time to Streamline Financial Regulation?

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

A March 13, 2017 presidential order requiring a comprehensive plan to reorganize the executive branch could be the first step toward streamlining the financial regulatory structure. The Executive Order requires the Director of the Office of Management and Budget to propose a plan within a year to reorganize government functions and eliminate unnecessary agencies, agency… Read More

Complimentary Teleconference: Current Practices and Issues for Foreign Broker-Dealers Under Rule 15a-6 in 2017

Posted in Broker-Dealer Regulation, Events

In an increasingly globalized securities market, Rule 15a-6 remains the primary avenue for foreign broker-dealers to conduct business in the United States. This presentation will address the requirements for compliance by foreign broker-dealers and their U.S. affiliates. Tuesday, March 28, 2017, 1:00 p.m. – 2:00 p.m. EDT To register, e-mail CMG-events@mofo.com. Topics Will Include: Summary of… Read More

One Step Forward, Two Steps Back?

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

Market participants who are not enamored by the current state of federal securities regulation may have been heartened by the new administration’s January 30, 2017 “two for one” order.  The order contemplated that, for each new rule issued by an executive department or agency, two regulations would need to be identified for elimination. The order… Read More

SEC 2017 Exam Priorities: Key Takeaways

Posted in Broker-Dealer Regulation, Investment Adviser Regulation

Far from the White House and the halls of Congress, compliance officers are preparing their compliance plans for 2017. On everyone’s mind: What will the Trump administration’s commitment to deregulate mean for compliance priorities? The short answer is “not much,” at least for the near-future. To predict what’s in store for the immediate future, compliance… Read More

The Future of Investment Management Regulation: What to Expect in 2017

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

In this fast-changing regulatory environment, the long-term consequences – both intended and unintended – of the recent White House remain uncertain, but looking into our crystal ball, we certain trends emerging.  These trends may lead to long-term shifts in how the Securities and Exchange Commission approaches regulation and enforcement, but, at least in the short-term,… Read More

President Trump Directs DOL to Review the Fiduciary Rule and Consider Modifications or Revocation

Posted in Broker-Dealer Regulation, Investment Adviser Regulation

On February 3, 2017, President Trump directed the Department of Labor (“DOL”) to review the fiduciary rule adopted in April 2016 (the “Fiduciary Duty Rule”) and consider whether the Fiduciary Duty Rule should be modified or rescinded.  The President’s order instructed the DOL to consider whether the Fiduciary Duty Rule would: Harm investors’ access to… Read More

Trump Signs Executive Orders on DOL Fiduciary Rule and Dodd-Frank

Posted in Broker-Dealer Regulation, Investment Adviser Regulation

On February 3, 2017, President Donald Trump signed an executive order to delay the implementation of the Department of Labor’s Fiduciary Rule.  President Trump also signed an executive order to roll back certain parts of the Dodd-Frank Act.  We will continue to monitor news relating to these executive orders and report developments on this blog…. Read More

Unintended Consequences of Financial Services Reform

Posted in Broker-Dealer Regulation, Events, Investment Adviser Regulation

Thursday, February 16, 2017 4:15 p.m. – 7:30 p.m. Thomson Reuters 3 Times Square New York, New York 10036 The Center for Financial Services at the College of Business and Economics at Lehigh University will present a panel discussion of the unintended consequences of financial reform in New York City on February 16, 2017. In… Read More

7th Annual Financial Services, Regulatory and Compliance Conference

Posted in Broker-Dealer Regulation, Cybersecurity/Privacy, Events, Fund Regulation

Wednesday, March 8, 2017 Morning Sessions: 8:45 a.m. – 12:30 p.m. EST Afternoon Sessions: 1:30 p.m. – 5:15 p.m. EST The Ritz-Carlton Charlotte 201 East Trade Street Charlotte, NC 28202 Please join Morrison & Foerster attorneys as we offer our insights regarding the future of financial services regulation. The morning sessions will focus on consumer… Read More

Mutual Funds Come Clean: Brokers Can Set Fund Share Sales Charges

Posted in Broker-Dealer Regulation, Fund Regulation

The staff of the SEC’s Division of Investment Management effectively allowed brokers to determine the commissions they will charge their customers who buy “Clean Shares” of mutual funds. In a “no-action” letter dated January 11, 2017, the staff said that it concurs with the view that the restrictions of Section 22(d) of the Investment Company… Read More

SEC Approves NSCC and NYSE T+2 Rule Proposals

Posted in Broker-Dealer Regulation

On January 4, 2017, the SEC approved the National Securities Clearing Corporation’s (“NSCC”) proposed rule change to conform to the SEC’s proposed Rule 15c6–1(a) amendment and accommodate a second business day after the trade date (“T+2”) settlement cycle.  The NSCC’s rule change consists of amendments to NSCC’s Rules & Procedures (‘‘Rules’’) in order to ensure… Read More

Uncertain Seas: European Financial and Regulatory Developments into 2017

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

“There are greater storms in politics than you will ever find at sea. Piracy, broadsides, blood on the decks. You will find them all in politics.”  —David Lloyd George, British Prime Minister, 1916-1922 “The greater the difficulty the more glory in surmounting it. Skillful pilots gain their reputation from storms and tempests” —Epictetus Lloyd George… Read More

OCIE 2017 Exam Priorities: Focus on Retail, Elderly and Retirement Investors; Market Risks

Posted in Broker-Dealer Regulation, Investment Adviser Regulation

The SEC’s National Examination Program (NEA) of the Office of Compliance Inspections and Examinations (OCIE) announced that its examination priorities in 2017 will focus on three general areas: retail investors, risks specific to elderly investors and retirement investing, and assessing market-wide risks. Read our client alert.

FINRA Issues 2017 Examination Priorities Letter

Posted in Broker-Dealer Regulation, FINRA Enforcement

Introduction Consistent with prior practice, with the arrival of the new year, FINRA has published its key examination priorities.  The letter may be found at the following link: http://www.finra.org/sites/default/files/2017-regulatory-and-examination-priorities-letter.pdf. As in prior years, the letter covers a broad array of topics.  This year’s topics include: Hiring and monitoring the activities of “high-risk and recidivist brokers;”… Read More

FINRA Investor Education Foundation Announces Investor Survey Results

Posted in Broker-Dealer Regulation

On December 13, 2016, the FINRA Investor Education Foundation published Investors in the United States 2016 (the “Report”), which includes the results of its investor survey of 2,000 individuals from across the United States who hold investments in non-retirement accounts.  The purpose of the survey was to analyze investor behaviors and attitudes. The Report includes… Read More

FINRA Proposed T+2 Amendment

Posted in Broker-Dealer Regulation

Following its receipt of comments, on December 14, 2016, FINRA filed proposed amendments to its rules to conform them to the SEC’s proposed amendments to Rule 15c6-1(a) to shorten the standard settlement cycle for most broker-dealer transactions from three business days after the trade date (T+3) to two business days (T+2). As we mentioned in… Read More

Big Regulatory Changes in Store for Funds and Advisers? No One Knows for Certain, but Here’s Our Best Guess

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

While no one knows for sure what the future holds for investment management regulation, the tea leaves indicate that we may expect a slowdown on new regulations, some pullback on parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), and an abundance of uncertainty. Here, we provide some observations for investment companies,… Read More

FINRA Fine Addresses Broker Compensation and Conflicts of Interest

Posted in Broker-Dealer Regulation, FINRA Enforcement

A recent enforcement action by FINRA underscores the regulator’s continuing concern regarding how financial advisers are paid to sell investment products.  In a case announced on November 28, 2016, a member firm settled charges brought by FINRA and agreed to pay a fine of $1,750,000.  The FINRA case includes a wide range of allegations involving… Read More