FINRA reviews rules. The Financial Industry Regulatory Authority issued two Retrospective Rule Review Reports assessing, respectively, the effectiveness and efficiency of FINRA’s communications with the public rules and FINRA’s rules on gifts, gratuities and non-cash compensation. (12/9/2014) FINRA press release.
Municipal securities best execution proposal approved. The Municipal Securities Rulemaking Board announced that the SEC has approved the MSRB’s proposal requiring municipal securities dealers to seek the most favorable terms reasonably available for their retail customers’ transactions. The new rule will be effective December 7, 2015. (12/8/2014) MSRB press release.
CFTC affirmation requirements. The National Futures Association reminded members of the CFTC’s requirement that any person claiming an exemption or exclusion from CPO registration under CFTC Regulation 4.5, 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), or an exemption from CTA registration under 4.14(a)(8), must annually affirm the applicable notice of exemption or exclusion within 60 days of the calendar year. (12/3/2014) NFA Notice I-14-34.
Electronic funding mechanisms. The National Futures Association announced CFTC approval of the NFA’s Interpretive Notice entitled “NFA Compliance Rules 2-4 and 2-36: Prohibition on the Use of Certain Electronic Funding Mechanisms,” which prohibits NFA Members from permitting customers to fund their futures or forex accounts with a credit card or other electronic methods tied to a credit card. The prohibition is effective January 31, 2015. (12/4/2014) NFA press release.
NYSE supervisory rules. NYSE has advised that the NYSE Exchanges have adopted a new set of rules concerning supervision which are modeled on the rules of the Financial Industry Regulatory Authority. Most of the new NYSE rules were effective December 1, 2014. (11/26/2014) NYSE Information Memo 14-11.
ISDA principles on CCP recovery. The International Swaps and Derivatives Association published key principles on the adequacy and structure of central counterparty loss-absorbing resources and on CCP recovery and resolution. (11/25/2014) ISDA press release.
Reporting obligations of ATS. Alternative trading systems and ATS subscribers were reminded by the Financial Industry Regulatory Authority of their trade reporting obligations in TRACE-eligible securities. (11/21/2014) FINRA Regulatory Notice 14-53.
FINRA exam fees. The National Futures Association reminded members of the Financial Industry Regulatory Authority’s planned increase in the fees FINRA will charge for the administration and delivery of NFA’s qualifications examinations. (11/19/2014) NFA Notice I-14-31.
Anti-money laundering update. The National Futures Association advised members that the US Treasury Department’s Financial Crimes Enforcement Network issued an advisory announcing updates to the Financial Action Task Force’s list of jurisdictions with strategic AML/CFT deficiencies. (11/19/2014) NFA Notice I-14-30.
Municipal securities disclosure. The Municipal Securities Rulemaking Board and the Financial Industry Regulatory Authority released companion proposals regarding the disclosure of pricing reference information on customer confirmations for transactions in fixed income securities. Under the proposals, bond dealers in retail-sized fixed income transactions would be required to disclose on the customer’s confirmation the price of certain same-day principal trades in the same security, as well as the difference between this reference price and the customer’s price. Comments should be submitted by January 20, 2015. (11/17/2014) MSRB press release; FINRA Regulatory Notice 14-52.
“Pay-to-Play” rule proposal. The Financial Industry Regulatory Authority published for comment a proposal establishing “pay-to-play” rules regulating the activities of member firms that engage in distribution or solicitation activities with government entities on behalf of investment advisers that provide or are seeking to provide investment advisory services to such government entities within two years after a contribution to an official of the government entity is made by the member firm or a covered associate. Comments should be submitted by December 15, 2014. (11/14/2014) FINRA Regulatory Notice 14-50.
OATS reporting requirements. The Financial Industry Regulatory Authority proposed amendments to the Order Audit Trail System (OATS) rules. The amendments would require members to identify non-member broker-dealers when reporting orders received from such entities. FINRA also proposes requiring alternative trading systems to provide FINRA with additional order book information using existing OATS interfaces. Comments should be submitted by January 13, 2015. (11/14/2014) FINRA Regulatory Notice 14-51.
Arbitrator honoraria. The Financial Industry Regulatory Authority advised that the SEC has approved amendments to the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes regarding the payments that FINRA makes to its arbitrators for the services they provide to FINRA’s dispute resolution forum, as well as the fees assessed to the parties for arbitration proceedings. The amendments are effective for arbitration cases filed on or after December 15, 2014. (11/14/2014) FINRA Regulatory Notice 14-49.
ISDA resolution stay protocol. The International Swaps and Derivatives Association announced the availability of the ISDA 2014 Resolution Stay Protocol. The Protocol will come into effect on January 1, 2015, for the 18 banks that have signed on to the Protocol. (11/12/2014) ISDA press release.
Publication of OTC equity volume. The Financial Industry Regulatory Authority seeks comment on a proposal to expand FINRA’s alternative trading system (ATS) transparency initiative to publish the remaining equity volume executed over-the-counter, including non-ATS electronic trading systems and internalized trades. Comments should be submitted by January 9, 2015. (11/12/2014) FINRA Regulatory Notice 14-48.
Business clock synchronization. The Financial Industry Regulatory Authority has proposed reducing the synchronization tolerance for computer clocks. Comments should be submitted by January 9, 2015. (11/12/2014) FINRA Regulatory Notice 14-47.
OTC equity trade reporting. The Financial Industry Regulatory Authority requested comment on a proposal that would identify over-the-counter trades in NMS stocks reported more than two seconds following trade execution as “out of sequence” and not last sale eligible for public dissemination purposes. Comments should be submitted by January 9, 2015. (11/12/2014) FINRA Regulatory Notice 14-46.