Volcker rule guidance. The federal financial regulators updated its guidance on the implementation of the Volcker rule to provide additional information regarding the capital treatment of banking entity investments in collateralized debt obligations backed by trust preferred securities. (3/4/3016) CFTC guidance. See also SEC Volcker rule FAQs (containing all SEC staff guidance on the Volcker rule).
SEC issues revised funding portal registration guidance. The SEC updated its small entity compliance guide concerning the registration of funding portals for crowdfunding transactions to include instructions for gaining access to EDGAR, which is required for funding portals to submit the required registration forms.(2/29/2016) Funding portals registration compliance guide.
Division of Trading and Markets updates large trader reporting guidance. The SEC’s Division of Trading and Markets published updated responses to Frequently Asked Questions regarding large trader reporting to revise its discussion of calculating options for the purposes of the identifying activity level and to include new information regarding filing requirements for previously self-identified Large Traders that no longer meet the threshold under the SEC’s October 2015 order exempting certain large traders from self-identification requirements. (2/22/2016) SEC large trader reporting FAQs.
Division of Trading and Markets exempts BATS from some Tick Pilot requirements. The SEC’s Division of Trading and Markets issued a letter granting a limited exemption to BATS Exchange, Inc. from certain quoting and trading provisions under the Plan to Implement a Tick Size Pilot Program under Regulation NMS. (3/3/2016) SEC exemptive order.
Selected Enforcement Actions
Broker violated Regulation S-P by sharing client information with former colleague. The SEC instituted settled administrative proceedings against a registered representative for violating Regulation S-P by sharing confidential account information with an outside third party without his customers’ knowledge or consent. The SEC alleged that the broker shared the information regarding his customers’ accounts with a former colleague at his firm who previously handled the accounts and was subject to an adverse disciplinary proceeding. The SEC also alleged that the broker used his personal email account to conduct official business relating to client accounts, in violation of Securities Exchange Act record retention rules. Without admitting or denying the allegations, the broker settled the charges by consenting to the entry of a cease-and-desist order and a six-month suspension from the industry. The broker also agreed to pay a US$75,000 civil penalty. (2/29/2016) In the Matter of Maximillian Santos, SEC Release No. 34-77253.
Speeches and Statements
ETFs, private funds, disclosure, and fund oversight are Investment Management’s priorities. SEC Division of Investment Management Director David Grim discussed the Division’s focus on recommending rules concerning exchange-traded funds, increasing the effectiveness of disclosure, employing newly-available private fund adviser data, and creating guidance and policy to support the oversight function of fund boards in remarks to the 2016 PLI Investment Management Institute. (3/3/2016) Grim remarks.
Luparello discusses equity market structure before Senate Banking Committee. In testimony before the Senate Committee on Banking, Housing, and Urban Affairs, SEC Division of Trading and Markets Director Stephen Luparello provided an overview of the SEC’s efforts regarding equity market structure, highlighting recent developments and SEC regulatory initiatives. (3/3/2016) Luparello testimony.
Regulators “took the easy way out” on credit retention rules, says Piwowar.SEC Commissioner Michael S. Piwowar delivered remarks regarding securitizations at ABS Vegas 2016 in which he objected to the “one-size-fits-all” approach taken by regulators in a joint-agency rule requiring a mandatory five percent risk retention requirement for every asset class. (3/1/2016) Piwowar remarks.
Chair White discusses rulemaking, capital-raising at the Advisory Committee on Small and Emerging Companies meeting. In opening remarks at the Advisory Committee on Small and Emerging Companies meeting, SEC Chair Mary Jo White updated the committee regarding recent JOBS Act rulemaking activity and highlighted the importance of the committee’s current focus: capital-raising by small businesses and the extent of capital-raising through unregistered securities offerings. (2/25/2016) White remarks.
SEC opens new Office of Risk Strategy within OCIE. The SEC announced that it has created an Office of Risk Strategy within its Office of Compliance Inspections and Examinations to lead the National Exam Program by overseeing the risk assessment, market surveillance and quantitative analysis teams. Peter B. Driscoll will head the new office and serve as Chief Risk and Strategy Officer. (3/8/2016) SEC press release.
Staff announcements. The SEC has named Robert M. Fisher as the Managing Executive of OCIE. Fisher will supervise OCIE’s business operations, technology services, examiner training and Tips, Complaints and Referrals programs. SEC press release.
DERA working paper on manipulation of illiquid asset indexes. Staff in the SEC’s Division of Economic Risk and Analysis published a working paper that examines the manipulability of illiquid assets by devising and applying a model that measures the manipulability of an index to identify assets that are most susceptible to manipulation. (2/26/2016) DERA working paper.
Section 31 fee rate will not be adjusted mid-year. The SEC announced that the Section 31 fee rate for fiscal year 2016 will not be subject to a mid-year adjustment and will remain set at US$21.80 per million for securities transactions until the later of September 30, 2016, or 60 days after the enactment of a regular fiscal year 2017 appropriation. (2/25/2016) SEC press release.
DERA white paper studies August 24th ETF trading pauses. The SEC released a DERA staff white paper that analyzes the causes of limit up-limit down trading pauses in several exchange-traded funds on August 24, 2015. (2/23/2016) DERA white paper.
Private fund statistics. The SEC’s Division of Investment Management published private fund statistics for the third quarter of 2015. (2/24/2016)