Category Archives: Regulatory

New Protections for Senior Investors

On March 30, 2017, FINRA issued Regulatory Notice 17-11 (Financial Exploitation of Seniors), announcing the SEC’s approval of amendments to the FINRA rulebook related to the financial exploitation of senior investors.  More specifically, as adopted, the amendments to FINRA Rule 4512 would require broker-dealers to make reasonable efforts to obtain the name and contact information for a “trusted contact person” for a customer’s account.  In addition, new FINRA Rule 2165 would permit (but not require) broker-dealers to place temporary holds on disbursements of funds or securities from the accounts of certain senior investors, as well as other investors with diminished capacity, when there is a reasonable belief of financial exploitation.  The FINRA notice announces an effective date of February 5, 2018, and clarifies, among other things, that the temporary hold on disbursements should not apply to securities transactions.

SEC Adopts T+2 Settlement Cycle for Securities Transactions

On March 22, 2017, as previously anticipated by the market, the SEC adopted an amendment to Rule 15c6-1 under the Securities Exchange Act of 1934 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).  The SEC proposed the amendment on September 28, 2016, in connection with a variety of related changes to the SEC’s rules and the rules of self-regulatory organizations such as FINRA to facilitate the U.S.’s move to a T+2 settlement cycle.

According to the SEC, Rule 15c6-1, as amended, is designed to enhance efficiency, reduce risk, and ensure a coordinated and expeditious transition by market participants to the shortened standard settlement cycle.

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Additional contributor to this post:

Matthew J. Kutnermkutner@mofo.com

FINRA’s Engagement Initiative

FINRA’s March 2017 announcement of its engagement initiative provides an opportunity for the industry to consider FINRA’s activities on a much broader level.

FINRA’s special notice reflects its previously announced plans to examine its rules and procedures based on its interaction with the industry.  For example, in his cover letter to FINRA’s 2017 examination priorities letter, Robert Cook, FINRA’s President and CEO, discussed his “never ending” listening tour of the industry.

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Additional contributor to this post:

Lloyd S. Harmetzlharmetz@mofo.com

 

BICE on Ice? Status of the DOL Fiduciary Rule

With recent developments in all three branches of government bearing on the authority and timing of the new DOL final rule expanding the definition of fiduciary “investment advice” for purposes of ERISA, the already formidable challenges for plan sponsors and retirement product and service providers have been made more difficult.

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Additional contributor to this post:

W. Mark Smithmarksmith@eversheds-sutherland.com

 

FINRA Focus: What Happened With Restitution in 2016?

Evershed Sutherland’s annual analysis of FINRA’s  disciplinary actions indicates that FINRA fined firms and individuals a record-setting $176 million in 2016.. In addition, it ordered $28 million in restitution in 2016.

But. . .

  • How did 2016 compare to previous years, including 2015’s record-breaking year?
  • What types of cases triggered orders of restitution from FINRA in 2016?
  • What should firms expect in 2017?

View the analysis here

Additional contributor to this post:

Brian L. Rubinbrianrubin@eversheds-sutherland.com