Insights Past Issues

On April 13, the Department of Labor released guidance on the prohibited transaction exemption pertaining to fiduciary investment advice for retirement investors, employee benefit plans and investment advice providers. 

On April 9, 2021, the Securities and Exchange Commission Division of Examinations issued a Risk Alert highlighting observations made by the Division from recent examinations of investment advisers, registered investment companies, and private funds offering products and services that incorporate environmental, social, and governance factors.

The Securities and Exchange Commission’s Division of Examinations has released its 2021 Examination Priorities. 

On December 22, the U.S. Securities and Exchange Commission adopted amended Rule 206(4)‑1 under the Investment Advisers Act of 1940, as amended, which addresses investment advisers marketing their services to clients and investors

This fall, the Securities and Exchange Commission has proposed additional avenues for businesses to raise capital away from the use of registered broker‑dealers.

In 2017, the UK authority that oversees the London interbank offered rate, announced that LIBOR may be phased out after the end of 2021. The announcement applied to all currency and term variants of LIBOR, including US dollar denominated LIBOR.

The Department of Labor proposed a new investment advice fiduciary rule, which generally reinstates the DOL’s longstanding investment advice fiduciary test and provides a new prohibited transaction exemption for such fiduciaries.

On June 16, the Securities and Exchange Commission issued an order granting registered municipal advisors an emergency, temporary conditional exemption from broker registration under Section 15 of the Securities Exchange Act of 1934 in connection with certain direct placement activities.

With the Regulation Best Interest compliance date set for June 30, 2020, the SEC's Office of Compliance Inspections and Examinations recently announced that it would begin conducting broker‑dealer examinations focused on Reg BI compliance and outlined the scope of exams likely to occur in the first year following the compliance date.

With the Form CRS compliance date set for June 30, 2020, the SEC's Office of Compliance Inspections and Examinations recently announced that it would begin conducting examinations focused on Form CRS compliance and outlined the focus of exams likely to occur in the first year following the compliance date.

The SEC has taken several actions to assist funds and advisers in light of the effects of COVID-19. Similarly, FINRA also has taken several actions to provide guidance and certain regulatory relief to its member firms.

The SEC re‑proposed Rule 18f-4, a new exemptive rule designed to provide a more comprehensive approach to the regulation of funds’ use of derivatives and certain other transactions.

The SEC's Office of Compliance Inspections and Examinations has released its 2020 Examination Priorities. This Client Alert includes a discussion of the exam priorities.

FINRA recently issued its 2020 Risk Monitoring and Examination Priorities Letter. The letter highlights the areas of focus for FINRA’s risk monitoring, surveillance and examination programs for 2020 and contain numerous links to Regulatory Notices, FINRA Reports and other resources to aid broker-dealers in complying with the priority areas.

On November 25, the SEC re-proposed Rule 18f-4 under the Investment Company Act of 1940 as amended. Rule 18f-4 is intended to be a new exemptive rule that is designed to enhance the regulation of the use of derivatives by registered investment companies, including mutual funds, ETFs, closed-end funds, and BDCs notwithstanding the restrictions under the 1940 Act.

On November 4, the SEC announced proposed amendments to Rules 206(4)-1 and 206(4)-3 under the Investment Advisers Act of 1940 to address investment adviser advertisements and payments to solicitors, respectively. 

On September 26, the SEC adopted final Rule 6c-11 under the Investment Company Act of 1940, and certain form amendments that standardize the regulatory regime governing exchange-traded funds.

On September 26, the SEC adopted Rule 6c-11 under the Investment Company Act of 1940 and amendments to Form N-1A and Form N-8B-2 that overhaul the patchwork regulatory framework that currently governs the $3.32 trillion ETF industry. The adopted rule and form amendments are largely similar, but not identical, to the versions that were proposed in June 2018.

The Securities and Exchange Commission voted 3 to 1 to adopt highly anticipated new and amended rules, forms and guidance relating to registered investment advisers’ and broker-dealers’ conduct and interactions with retail customers.  

The beginning of each year provides an opportunity for investment advisers to review compliance and regulatory matters, including issues related to private investment funds and commodity pools.

On December 14, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations issued a Risk Alert reminding investment advisers of their recordkeeping obligations with respect to electronic messaging and summarizing their related observations from recent examinations.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations has released its 2019 National Exam Program Examination Priorities.

The Securities and Exchange Commission recently issued a no-action letter which allows broker-dealers to rely on investment advisers to perform some or all of their Customer Identification Program obligations under federal anti-money laundering legislation.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations issued a National Exam Program Risk Alert outlining the most common deficiencies that OCIE staff has identified in recent examinations of registered investment advisers’ best execution practices.

On June 28, the Securities and Exchange Commission proposed Rule 6c-11 under the Investment Company Act of 1940 and amendments to Form N-1A and Form N-8B-2 that overhaul the patchwork regulatory framework that currently governs the $3.4 trillion ETF industry.

The Municipal Securities Rulemaking Board recently published its 2017 Compliance Advisory for Brokers, Dealers and Municipal Securities Dealers. The Compliance Advisory outlines several MSRB rules that the MSRB believes present key compliance risks for brokers, dealers and municipal securities dealers.

On April 18, the Securities and Exchange Commission released a new interpretation addressing investment advisers’ fiduciary duties to their clients. The SEC’s proposed interpretive guidance reaffirms and clarifies duties owed by investment advisers to their clients under Section 206 of the Investment Advisers Act of 1940.

On April 18, the Securities and Exchange Commission proposed new Regulation Best Interest under the Securities Exchange Act of 1934 that would establish a federal standard of conduct for broker-dealers and natural persons who are associated persons of a broker-dealer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. 

Today, the Securities and Exchange Commission voted 4 to 1 to propose highly anticipated new and amended rules and guidance relating to registered investment advisers’ and broker-dealers’ conduct and interactions with retail customers.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently published a Risk Alert that highlights frequently-identified investment adviser fee and expense compliance issues from exams of over 1,500 investment adviser examinations during the past two years.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently released its 2018 National Exam Program Examination Priorities. Highlights from the 2018 exam priorities are reviewed in this Client Alert. 

In July, Andrew Bailey, the CEO of the United Kingdom’s Financial Conduct Authority, announced that the FCA and the panel banks whose submissions are used to determine the London Interbank Offered Rate will only sustain LIBOR until the end of 2021.

The beginning of each year provides an opportunity for investment advisers to review compliance and regulatory matters, including issues related to private investment funds and commodity pools, which are briefly summarized in this alert.

The Financial Industry Regulatory Authority, Inc. recently issued its 2018 Regulatory and Examination Priorities Letter. A number of FINRA’s comments direct firms to review the 2017 Examination Findings Report for additional insights into specific areas of concern and effective practices.

The staff of the Securities and Exchange Commission issued three no-action letters designed to assist broker‑dealers and investment advisers in addressing issues related to European Union directives and related legislation that will become effective on January 3, 2018.

The Financial Industry Regulatory Authority, Inc. released additional guidance on social media and digital communications in Regulatory Notice 17-18. The guidance from FINRA is summarized in this article.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently published a Risk Alert that highlights frequently identified investment adviser advertising compliance issues. The Risk Alert identifies the advertising compliance issues most frequently identified in deficiency letters from investment adviser examinations.

This paper, published by the National Association of Bond Lawyers, identifies various issues that arise in connection with the structuring and negotiation of direct purchase transactions, and explores some of the more commonly encountered provisions present in direct purchase documents.

In February 2017, the staff of the Securities and Exchange Commission’s Division of Investment Management issued guidance providing additional clarity on Rule 206(4)-2 under the Investment Advisers Act of 1940.

The Securities and Exchange Commission announced that it is requesting comments from retail investors and other interested parties on the standards of conduct applicable for broker-dealers and investment advisers.

Labor Secretary Alexander Acosta confirmed in an Op-Ed in the Wall Street Journal that the Department of Labor fiduciary rule will become applicable on June 9. Along with the Op-Ed, the DOL issued new Conflict of Interest FAQs related to the June 9, 2017 to January 1, 2018 transition period and Field Assistance Bulletin No. 2017-2.

The Financial Industry Regulatory Authority, Inc. recently released additional guidance on social media and digital communications. FINRA previously issued guidance on the use of social media communications in Regulatory Notice 10-06 and Regulatory Notice 11-39.

The Municipal Securities Rulemaking Board recently withdrew a proposed rule from consideration by the Securities and Exchange Commission. The rule would have prohibited a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the minimum denomination of the issue stated in offering documents.

The Financial Industry Regulatory Authority, Inc. recently released three Regulatory Notices related to its ongoing review of its members’ involvement in the capital formation process. 

Yesterday the Department of Labor released the final rule delaying the applicability of the DOL fiduciary rule and the related prohibited transaction exemptions to June 9, 2017. The rule was originally set to become applicable on April 10, 2017.

The Department of Labor announced a proposed 60-day delay of the applicability date of the DOL fiduciary rule and related exemptions. The DOL has allowed a 15-day comment period providing all interested parties an opportunity to comment on the proposed delay.

The staff of the Securities and Exchange Commission’s Division of Investment Management recently issued new guidance providing additional clarity on Rule 206(4)-2 under the Investment Advisers Act of 1940.

The staff of the Securities and Exchange Commission’s Division of Investment Management recently released guidance on disclosure, suitability and compliance obligations for automated advisers—often referred to as “robo-advisers.”

The Financial Industry Regulatory Authority, Inc. announced the effective date of amendments to FINRA Rule 2232 requiring firms to disclose additional transaction-related information for certain fixed income securities principal transactions with retail customers.

The Municipal Securities Rulemaking Board is requesting comments on proposed amendments to its advertising rule for brokers, dealers, and municipal securities dealers and a new advertising rule for municipal advisors.

The Financial Industry Regulatory Authority, Inc. recently proposed amendments that would create a new exception to FINRA’s prohibition on projecting performance. The proposed exception to FINRA Rule 2210 would permit a firm to distribute a customized hypothetical investment planning illustration.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently published a Risk Alert listing five compliance topics most frequently identified in deficiency letters to investment advisers following exams.

The Securities and Exchange Commission is seeking comments on proposed new Municipal Securities Rulemaking Board Rule G-49 prohibiting a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the minimum denomination of the issue stated in offering documents.

President Trump issued a memorandum directing the Department of Labor to conduct an analysis of the fiduciary rule’s potential impact. Depending on the results of its examination, the memorandum instructs the DOL to publish for notice and comment a proposed rule to rescind or revise the rule. 

The Department of Labor released on January 13 two sets of frequently asked questions to provide additional guidance on its new fiduciary rule. One set of FAQs is directed at consumers to better help them understand the Rule. The other set of FAQs is directed at financial service providers to address the regulation defining “investment advice.” 

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently released its Examinations Priorities for 2017.

The beginning of each year provides an opportunity for investment advisers to review annual compliance and regulatory matters, including issues related to private investment funds and commodity pools. This alert briefly summarizes some of the primary issues that advisers might consider in their 2017 annual review and update processes.

The Financial Industry Regulatory Authority, Inc. recently issued its annual Regulatory Examination Priorities Letter. This alert summarizes some of the more significant issues FINRA’s letter raises. 

The staff of the Securities and Exchange Commission’s Division of Investment Management has released guidance focused on disclosure issues and certain procedural requirements associated with mutual funds implementing intermediary‑specific variations to sales loads and adding new share classes.

The Municipal Securities Rulemaking Board recently published guidance on broker-dealer obligations when executing transactions involving a registered investment adviser that is authorized to exercise full discretion to buy and sell municipal securities on behalf on an account holder.

The Municipal Securities Rulemaking Board recently issued an interpretive notice announcing its interpretation that if a dealer engages in a transaction with a customer in a municipal security that bears market discount, the dealer must disclose the existence of market discount to its customer as part of the “time of trade disclosure” required under MSRB Rule G-47. 

The Securities and Exchange Commission recently approved Financial Industry Regulatory Authority, Inc. and Municipal Securities Rulemaking Board rule amendments requiring broker-dealers to disclose trade compensation for certain fixed income securities principal transactions with retail customers. 

The Financial Industry Regulatory Authority, Inc. recently filed proposed rule changes with the Securities and Exchange Commission to amend FINRA Rule 4512 and adopt FINRA Rule 2165. 

The Securities and Exchange Commission recently approved proposed rule changes by the Financial Industry Regulatory Authority, Inc. that would revise certain filing requirements of FINRA Rules 2210, 2213 and 2214. 

The Municipal Securities Rulemaking Board recently issued a notice seeking guidance on its strategic priorities for 2017. The MSRB’s notice seeks comment on potential areas where the MSRB should focus its strategic goals and how it should prioritize its core activities. 

On October 27, the Department of Labor issued its first wave of FAQs to address certain questions that have arisen with respect to the DOL’s previously issued fiduciary rule. Generally, the Rule broadly defines who is a fiduciary under the Employee Retirement Income Security Act and the Internal Revenue Code.

The Financial Industry Regulatory Authority announced that it is conducting a sweep examination on broker-dealer firms to look into incentives and business practices that may encourage employees to engage in inappropriate cross-selling activities. 

The Securities and Exchange Commission voted last Thursday to adopt changes to enhance liquidity risk management by open-end funds, including mutual funds and exchange-traded funds.

On April 4, the Municipal Securities Rulemaking Board and the Financial Industry Regulatory Authority issued a joint regulatory notice reminding firms they regulate of their obligation to determine whether state and local government obligations acquired through direct purchase or “bank loan” transactions constitute municipal securities for federal securities law purposes.

The Municipal Securities Rulemaking Board recently published its 2016 Compliance Advisory for Brokers, Dealers and Municipal Securities Dealers. The Compliance Advisory outlines several MSRB rules that the MSRB believes present key compliance risks for brokers, dealers and municipal securities dealers. 

After several years of securities industry efforts, the Securities and Exchange Commission has formally proposed a rule change that would shorten the standard settlement cycle for most broker-dealer securities transactions from three business days after the trade date to two business days after the trade date. 

Municipal Securities Rulemaking Board Rule G-15(f) prohibits a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the minimum denomination of the issue stated in offering documents, subject to two current exceptions.

The Securities and Exchange Commission is seeking comments on proposed Municipal Securities Rulemaking Board rule changes that would require dealers to disclose bond mark-ups and mark-downs on retail customer trade confirmations. 

On August 25, after approximately five years of litigation concluding with a 25-day bench trial, Judge Peter G. Sheridan issued the opinion of the U.S. District Court for the District of New Jersey in the first trial of a “manager-of-managers” theory of liability for breach of fiduciary duty.

The Securities and Exchange Commission recently approved new Financial Industry Regulatory Authority, Inc. pay‑to-play rules to regulate activities of FINRA member firms that engage in distribution or solicitation activities with government entities on behalf of investment advisers.

The Securities and Exchange Commission recently adopted changes to certain aspects of the reporting, disclosure and recordkeeping obligations of registered investment advisers including changes to Form ADV. 

The Securities and Exchange Commission is seeking comments on proposed Financial Industry Regulatory Authority, Inc. rule changes that would require members to disclose bond mark-ups and mark-downs on retail customer trade confirmations.

On August 1, the Municipal Securities Rulemaking Board released details from its most recent quarterly meeting. Among other things, the press release from the meeting stated that the MSRB will not pursue rulemaking with regard to its concept proposal to require municipal advisors to disclose information about bank loans entered into by their municipal issuer clients. 

Following the implementation of Dodd-Frank's rules and regulations and the initial wave of SEC examinations of municipal advisors, management and compliance personnel are navigating through the rules while continuing to run their business and service clients.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued a Risk Alert announcing that they will be undertaking an examination initiative focused on the risk that registered advisers may be making conflicted recommendations to their clients.

The Securities and Exchange Commission recently proposed a new rule and rule amendments under the Investment Advisers Act of 1940 that would require SEC-registered investment advisers to adopt and implement written business continuity and transition plans.

The Financial Industry Regulatory Authority, Inc. recently filed changes to new FINRA Rule 2242 (Debt Research Analysts and Debt Research Reports) with the Securities and Exchange Commission. The rule is still new and FINRA has delayed implementation several times.

The Financial Industry Regulatory Authority, Inc. recently filed proposed changes to certain aspects of the FINRA rules governing member firms’ communications with the public. The proposed rule changes are substantially similar to those proposed by FINRA in May 2015. 

The Securities and Exchange Commission recently published a notice of its intention to adjust for inflation dollar amount thresholds for the “qualified client” definition under Investment Advisers Act of 1940 Rule 205-3. Under Rule 205-3, an investment adviser may charge performance-based fees to a “qualified client” meeting a minimum net worth or minimum assets.

Client Alert
The Financial Crimes Enforcement Network recently published its final rule under the Bank Secrecy Act of 1970, as amended on customer due diligence requirements for banks, broker-dealers, mutual funds and futures commission merchants and introducing brokers in commodities.

The Financial Industry Regulatory Authority, Inc. delayed the implementation of FINRA Rule 2242 until July 16, 2016. FINRA Rule 2242 addresses conflicts of interest relating to the publication and distribution of debt research reports.

The Municipal Securities Rulemaking Board prohibits a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the minimum denomination. The MSRB recently proposed adding two additional exceptions that would allow dealers to sell below stated minimums. 

This alert addresses several frequently asked questions related to sales of unit investment trusts registered under the Investment Company Act of 1940 by those persons deemed fiduciaries under the U.S. Department of Labor's recently released fiduciary rule.

Today the U.S. Department of Labor released its highly anticipated final rule to define the term “fiduciary” and address conflicts of interest in providing investment advice to retirement accounts.

The Municipal Securities Rulemaking Board is seeking comment on proposed guidance on establishing the “prevailing market price” and calculating mark-ups and mark-downs for principal transactions in municipal securities.  

The Financial Industry Regulatory Authority, Inc. delayed the implementation of FINRA Rule 2242 (Debt Research Analysts and Debt Research Reports) until April 22, 2016. FINRA Rule 2242 addresses conflicts of interest relating to the publication and distribution of debt research reports.

This Client Alert briefly summarizes some of the primary issues that advisers might consider in their 2016 annual review and update processes. 

The Securities and Exchange Commission recently approved amendments to Financial Industry Regulatory Authority, Inc. rules to apply FINRA Rule 2121 (Fair Prices and Commissions) to government securities. 

On January 6, 2016, the staff of the Securities and Exchange Commission’s Division of Investment Management released guidance regarding registered open-end investment company payments to certain financial intermediaries that provide shareholder and recordkeeping services for investors. The staff’s guidance is designed to help fund boards oversee and evaluate whether sub-accounting fees are for distribution or non-distribution services.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently released its Examinations Priorities for 2016. Firms should review their policies, procedures and business activities in light of OCIE’s stated 2016 priorities.

In September, the IRS issued final regulations to clarify that controlled groups under the rules for regulated investment companies may consist of only two entities. This may cause unanticipated attributions of ownership, which would disqualify some RICs from beneficial tax treatment.

The Financial Industry Regulatory Authority is requesting comment on a revised proposal to amend FINRA Rule 2232 governing trade confirmation disclosures. The amendments would require member firms to disclose a “reference price” on customer confirmations for principal transactions in corporate and agency debt securities with retail customers.

The Securities and Exchange Commission recently proposed new rules and amendments designed to enhance liquidity risk management requirements for certain open-end management investment companies, including mutual funds and exchange-traded funds.

The Municipal Securities Rulemaking Board recently proposed amendments to MSRB Rule G-15 that would require brokers, dealers and municipal securities dealers to disclose the mark-up or mark-down on retail customer confirmations for specified principal transactions.

The Financial Industry Regulatory Authority, Inc. recently issued a Regulatory Notice providing guidance on liquidity risk management practices that FINRA expects member firms to consider and implement in preparation for adverse circumstances. 

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued a Risk Alert providing information on the areas of focus for the SEC staff’s second round of cybersecurity examinations of registered investment advisers and broker-dealers. 

The Financial Crimes Enforcement Network recently proposed rulemaking to prescribe minimum standards for anti-money laundering programs.

The Financial Industry Regulatory Authority, Inc. recently announced the adoption of amendments to its equity research rules and entirely new rules governing debt research. 

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued a Risk Alert summarizing deficiencies in controls of certain broker-dealers related to sales of structured products to retail investors. 

The Financial Industry Regulatory Authority recently issued a Regulatory Notice to remind firms that their written supervisory procedures should identify the process for detecting, resolving, and preventing the consequences of short positions and fails-to-receive in municipal securities. 

The Securities and Exchange Commission recently set the compliance date for the ban on certain payments to third-party solicitors under Rule 206(4)-5 of the Investment Advisers Act of 1940 as July 31, 2015.

The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance on investment adviser Code of Ethics exceptions to personal securities transaction reporting for securities transactions occurring in certain types of trusts or investment management accounts where the beneficiary or account holder has limited or no discretionary investment authority. 

The Financial Industry Regulatory Authority is requesting comment on a revised proposal to adopt a new FINRA rule that would consolidate and clarify former National Association of Securities Dealers and New York Stock Exchange rules regarding discretionary accounts and transactions.

On June 12, 2015, the Securities and Exchange Commission issued a release seeking public comment to help inform its review of the listing and trading of new, novel, or complex exchange-traded products.

The Securities Industry and Financial Markets Association recently proposed that the Financial Industry Regulatory Authority amend its rules to replace the current broker-dealer “suitability” standard with a new “best interests” standard along with enhanced customer disclosure about a broker-dealer’s services, conflicts of interest, fees, and compensation. 

The Financial Industry Regulatory Authority recently released a Regulatory Notice in which it proposed changes to certain aspects of the FINRA rules governing member firms’ communications with the public. This Client Alert is a summary of the proposed changes.

This Client Alert summarizes the Securities and Exchange Commission proposed changes to certain aspects of the reporting, disclosure, and recordkeeping obligations of registered investment advisers. 

The Financial Industry Regulatory Authority recently issued an interpretive letter that allows distributors of mutual funds to include related performance information in communications with institutional investors, including registered broker-dealers and investment advisers.

On May 20, 2015, the Securities and Exchange Commission proposed changes to certain aspects of reporting and disclosure obligations of registered investment advisers and investment companies. 

The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance for registered investment advisers and registered investment companies related to cybersecurity preparedness in their business practices. 

The Securities and Exchange Commission staff recently announced an initiative to conduct examinations of registered investment company complexes that have not previously been examined. 

The staff of the Securities and Exchange Commission recently issued guidance to remind affiliates of registered investment companies that the receipt of gifts or entertainment may violate Section 17(e)(1) of the Investment Company Act of 1940.

As part of its charge to promote a fair and efficient municipal securities market, the Municipal Securities Rulemaking Board issued regulatory notice 2015-03 on January 29, 2015, calling for timely disclosure of bank loans extended to municipal borrowers, whether in the form of the direct purchase of bonds or notes, a loan agreement, or any other type of financing with the municipal borrower.

The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued its 2015 Regulatory and Examinations Priorities Letter.

The Securities and Exchange Commission recently issued a no-action letter which grants relief to broker-dealers, allowing them to rely on investment advisers to perform some or all of their Customer Identification Program obligations under federal anti-money laundering legislation.

The beginning of each year provides an opportunity for investment advisers to review annual compliance and regulatory matters, including issues related to private investment funds and commodity pools.

The Financial Industry Regulatory Authority, Inc. and the Municipal Securities Rulemaking Board recently requested comment on proposals to require disclosure of pricing information on customer trade confirmations for certain fixed income security transactions.

The Municipal Securities Rulemaking Board recently announced the approval of an amended continuing education rule that will require annual training and expand the coverage of its Firm Element.

In this issue:

• FinCEN Proposed Rule on Customer Due Diligence Requirements

• CFPB Issues First Enforcement Action for Mortgage Servicing Rules

• Cordray Speaks about Checking Account Issues

The Board of Governors of the Financial Industry Regulatory Authority, Inc. recently authorized regulatory notices seeking comment on initiatives to enhance transparency and execution quality in fixed income markets.

On August 18, 2014, the Municipal Securities Rulemaking Board released for public comment draft amendments the Proposed Amendments) to existing Rule G-37, which restricts “pay to play” practices by regulating certain activities by brokers, dealers and municipal securities dealers.

The Municipal Securities Rulemaking Board has released for public comment a revised draft of its proposed Rule G-42 on the duties of municipal advisors.

On May 19, 2014, the Staff of the Office of Municipal Securities of the Securities and Exchange Commission issued additional guidance on the SEC’s registration rules for municipal advisors.

If your firm is a registered investment adviser that has never been examined by the Securities and Exchange Commission, you might want to prepare to see SEC examiners in the near future.

With fixed income markets already in decline in May 2013, speculation regarding Federal Reserve action reached a pinnacle in the last half of June, sparking a bond market selloff of historic proportions.

On January 9, 2014, the Municipal Securities Rulemaking Board proposed Rule G-42, defining the fiduciary duties of municipal advisors to municipal entity clients and the duties and responsibilities owed to all municipal advisory clients.

On January 10, 2014, the Staff of the Office of Municipal Securities of the Securities and Exchange Commission released additional guidance on the SEC’s registration rules for municipal advisors in the form of responses to Frequently Asked Questions.

Today the Securities and Exchange Commission announced that it is delaying until July 1, 2014 the compliance date of the recent final rule requiring registration of municipal advisors under the Dodd-Frank Act.

The Securities and Exchange Commission has released interpretive guidance on the final rules for the registration of municipal advisors.

The Municipal Securities Rulemaking Board has released its proposed rule on the duties of municipal advisors. 

The SEC’s final municipal advisor registration rules will become effective on January 13, 2014. The SEC rules have created controversy within the municipal bond community about whether an underwriter will continue to be able to visit clients and pitch ideas without being prohibited from underwriting a resulting bond issue under MSRB Rule G-23.

The SEC’s final municipal advisor registration rules will be published in the Federal Register on November 12, 2013, with an effective date of January 13, 2014.

On September 18, 2013, the Securities and Exchange Commission unanimously approved final rules for the registration of municipal advisors under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

On September 18, 2013, the Securities and Exchange Commission adopted final rules for registering municipal advisors.

On June 5, 2013, the SEC proposed certain amendments to Rule 2a-7, which is the primary rule governing money market mutual funds under the Investment Company Act of 1940.

The Municipal Securities Rulemaking Board (“MSRB”) recently issued a notice seeking comments on a concept proposal that would require underwriters and municipal advisers to publicly disclose on the MSRBʼs Electronic Municipal Market Access (“EMMA”) system whether they have made or received certain payments in connection with new issues of municipal securities.

The Commodity Futures Trading Commission (the “CFTC”) recently issued final rule changes:

 • narrowing the exclusion from the definition of commodity pool operator (“CPO”) available to mutual funds and other registered investment companies (“RICs”) and their advisers;

 • eliminating an exemption from CPO registration available to private fund operators (but keeping another exemption that had also been proposed to be eliminated);

•  narrowing and rescinding certain exemptions from commodity trading advisor (“CTA”) registration;

 • adding certain risk disclosure statements for CPOs and CTAs with respect to swaps; and

 • making certain changes to reporting and certification obligations for entities required to register as CPOs and

• CTAs and entities relying on exclusions and exemptions from registration. 

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires the Securities and Exchange Commission (“SEC”) to conduct a study of legal and regulatory requirements applicable to broker-dealers, investment advisers, and associated persons who provide personalized investment advice and recommendations about securities to retail customers.  

The Securities and Exchange Commission recently approved a rule change proposed by the Financial Industry Regulatory Authority, Inc. relating to the “best execution” obligation of broker-dealers.