Compliance, Enforcement, Regulatory, Standard of Care

A Record-Breaking Year for FINRA in 2016; What May Come in 2017?

July 25, 2017 Clifford E. Kirsch Leave a comment

2016 will be remembered as an historic year: the Olympics, the Chicago-Cleveland World Series, and the presidential election. In the regulatory world of FINRA, there was also an historic year as FINRA continued its trend of ordering significant fines, shattering its
previous record set in 2014. If firms and their representatives were not paying attention to this trend, they should be now. Although some have speculated about a reduction in the SEC’s Enforcement program with the new administration, FINRA shows no signs of slowing down. By analyzing FINRA’s 2016 sanctions and cases, including the issues that resulted in the most significant fines and emerging enforcement trends, what predictions can we make about key issues for FINRA for 2017 and beyond?

FINRA Holds Regulator Forum on Distributed Ledger Technology

July 20, 2017 Clifford E. Kirsch Leave a comment

FINRA recently held a Blockchain Symposium which included a Regulator Forum with representatives from FINRA, OCC, CFTC, the Federal Reserve and the SEC. The regulators discussed the work they have undertaken to assess the use of DLT in the financial services industry, and the regulatory considerations associated with potential uses of DLT. The Symposium follows FINRA’s publication of a report earlier this year discussing the implications of DLT for the securities industry and soliciting comments from market participants.

The Final Rule: The Fifth Request for Public Comments

July 1, 2017 Clifford E. Kirsch Leave a comment

On June 29, 2017, the Department of Labor released a request for information, seeking public comments yet again on its new “investment advice” fiduciary definition and related exemptions which became applicable on June 9.

This is the fifth request for public comments under the Administrative Procedure Act since DOL undertook this rulemaking in October 2010, and the second in the last four months.
There could be a sixth iteration later this year, in connection with any proposed changes to the Final Rule and/or delay of the January 1, 2018, date for compliance with the full conditions of the Best Interest Contract Exemption, the Principal Transaction Exemption and PTE 84-24.
In addition, on June 1, US Securities and Exchange Commission Chair Jay Clayton issued a statement requesting comments on the standard of conduct under the securities laws that should be applicable to investment advisers and broker-dealers serving retail investors, which includes retirement investors.