Posts Categorized: Broker-Dealers

SEC Reinforces Ban on Testimonial Marketing for Investment Advisers

In March 2014 the Securities and Exchange Commission (the “SEC”) issued guidance on the use by investment advisers and investment advisory representatives (together, “IAs”) in their marketing of testimonials (but not objective third-party articles) posted on social media.  Under Section 206(4) of the Investment Advisers Act (prohibiting fraudulent, deceptive or manipulative acts) and Rule 206(4)-1(a)(1) (finding testimonials… Read more »

U.K. Exit from E.U. Taking Shape Amid Political Confusion

On June 26, 2018, the United Kingdom adopted the European Union (Withdrawal) Act 2018 providing for a framework for “Brexit” under which E.U. law adopted in the U.K. would continue to apply during an implementation period and government minsters would have the power to adopt implementing rules.  The United Kingdom is currently to leave the European… Read more »

SEC Proposes Standards for Broker-Dealers and Investment Advisers

On April 16, 2018, the Securities and Exchange Commission (the “SEC”) adopted three new proposals for standards that would apply to broker-dealers and investment advisers in dealing with retail customers.  Regulation “Best Interest” would apply to broker dealers.  Another release would interpret and enhance the “fiduciary” standard applicable to investment advisors.  Finally, the third release… Read more »

FinCEN Guidance on AML Customer Due Diligence Rules to Become Fully Effective May 11, 2018

The Finance Crimes Enforcement Network (“FinCEN”) of the U.S. Treasury Department, which oversees most of the federal anti-money laundering (“AML”) regulations, issued Customer Due Diligence (“CDD”) rules on May 11, 2016, that are to become fully effective on May 11, 2018.  These rules apply to AML diligence to be done by covered U.S. financial institutions,… Read more »

FINRA Issues Letter Guidance On Use of Performance Information with Institutional Investors

On June 9, 2017, the Financial Industry Regulatory Authority (“FINRA”) issued a letter (the “Letter”) giving guidance in response to a request by an open-ended fund to allow it to provide “Related Performance Information” in marketing material used with institutional investors. “Related Performance Information” is defined as the actual performance of separate or private accounts or funds… Read more »

U.K. Anti-Money Laundering Regulation Updated

The United Kingdom has published a near final regulation, the Money Laundering and Transfer of Funds (Information on the Payer) Regulations 2017 (the “Regulation”) under the E.U. Fourth Money Laundering Directive, to replace the Money Laundering Regulations 2007.  The Regulation is due to go into effect on June 26, 2017, although it may be delayed.  Under the… Read more »

FINRA Seeks Comment on Proposed Revisions to Unfair Underwriting Rule

On April 15, 2017, the Financial Industry Regulatory Authority (“FINRA”) published Regulatory Notice 17-15, seeking comments on its proposed revisions to FINRA Rule 5110, which prohibits broker-dealers from being involved in unfair underwritings.  The changes are, according to FINRA, designed to modernize the rule, first adopted in 1992 and updated last in 2004.  The changes… Read more »

FINRA Proposes to Restructure Exams

On April 7, 2017, the Financial Industry Regulatory Authority (“FINRA”) published in the Federal Register its proposal (the “Proposal”), filed with the Securities and Exchange Commission on March 8, that would consolidate registration rules, restructure the representative-level qualification examination and amend continuing education requirements.  Among other things, the Proposal would create a new exam, the Securities Industry Essentials… Read more »

FINRA Issues Proposed Safe Harbor Exemption for Desk Commentary

On April 11, 2017, the Financial Industry Regulatory Authority (“FINRA”) issued Regulatory Notice 17-16 proposing a safe harbor exemption from many of the research rules for certain desk commentary.  Firms may also decide that other desk commentary outside the proposal is not research, but if the desk commentary fits within the safe harbor it will be… Read more »

New “Special Study” of the Securities Market by Columbia Law and Business Schools

Columbia University Law and Business Schools announced that they will jointly carry out a new “Special Study” of the U.S. securities markets under a grant from the NASDAQ Educational Foundation.  The prior “Special Study” was published in 1963, and resulted in a number of significant changes in securities regulation, so there is some interest in… Read more »