Broker-Dealer Regulation

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On April 9, 2020, the SEC adopted a final rule (“Final Rule”) that will amend rules for securities clearing agencies to subject all SEC-registered central counterparties (“CCPs”) and central securities depositories (“CSDs”) to enhanced standards. The adopted rules will become effective sixty days after publication in the Federal Register. (As of the date of this post, the Final Rule had not been published).

In a press release, Brett Redfearn, Director of the Division of Trading and Markets stated “[t]hese amendments both enhance and clarify the definition of a covered clearing agency, which is an important step in the regulation of the U.S. financial system’s critical market infrastructure.”…

On April 7, 2020, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) published two risk alerts intended to provide market participants with advance information regarding (1) upcoming inspections for broker-dealer compliance with Regulation Best Interest (“Regulation BI”) and (2) upcoming inspections for broker-dealer and investment adviser compliance with Form CRS. The compliance date for both Regulation BI and Form CRS is June 30, 2020.

You can find more details in our client alert.…

On March 30, 2020, the Securities and Exchange Commission (“SEC”) Division of Trading and Markets (“Division”) issued a No-Action Letter relating to market practices regarding bank sweep programs requested by the Securities Industry and Financial Markets Association. Specifically, the No-Action Letter provides that the Division will not recommend enforcement action for non-compliance with broker-dealer net capital requirements with respect to broker-dealers that treat certain receivables resulting from bank sweep programs as “allowable assets” for purposes of the net capital requirements.

This post explains the No-Action Letter and related Exchange Act requirements.…

On March 26, 2020, the Securities and Exchange Commission (“SEC”), announced two agency actions providing additional relief to market participants in response to the impacts of COVID-19 on the markets. First, the SEC adopted an interim final rule providing relief related to (a) market participants needing to gain access to make filings on the EDGAR system and (b) certain company filing obligations under Regulation A and Regulation Crowdfunding. Second, the SEC published a temporary conditional exemptive order providing relief from certain filing requirements for municipal advisors.

This blog post summarizes the SEC relief and conditions to the relief.…

In the midst of the COVID-19 pandemic, the financial markets have experienced significant volatility. During the course of this volatility, exchanges have halted trading multiple times after declines in trading trigged circuit breakers. In addition, trading floors are transitioning to electronic trading in efforts to prevent the transmission of COVID-19 on physical trading floors. With the recent turmoil, this post provides a high-level summary of the various types of circuit breakers and what can be expected.…

On January 27, 2020, the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) released observations on cybersecurity and resiliency (the “Observations”). In them, OCIE presented several key cybersecurity issues that industry participants should seek to address such as the construction and implementation of a comprehensive cybersecurity program, the prevention of unauthorized access to systems, the theft of information, responding to cyber incidents, and vendor management. In doing so, OCIE highlighted elements of successful cybersecurity efforts.
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