MSRB requests comment on lengthening board member terms. The Municipal Securities Rulemaking Board (MSRB) is seeking public comment on a proposal to lengthen the term of board member service from three to four years. (10/5/2015) Board member terms.
SEC approves amendments to FINRA rules regarding temporary and permanent cease and desist orders. The SEC approved amendments to FINRA rules that lower the evidentiary standard to impose a temporary cease and desist order (TCDO); create a new expedited proceeding for repeated failures to comply with a TCDO or a permanent cease and desist order (PCDO); harmonize the provisions governing how documents are served in temporary cease and desist and expedited proceedings; clarify FINRA’s authority to impose a PCDO; and ease FINRA’s administrative burden in temporary cease and desist proceedings. The amendments become effective on November 2, 2015. (10/2/2015) Regulatory notice 15-35.
New board and new fiscal year for MSRB. The MSRB announced that it began its new fiscal year on October 1st and has also seated the 21-member Board of Directors, which establishes regulatory policies and oversees operations. Included in the MSRB’s priorities this year are the implementation of municipal advisor regulations and a qualification exam, as well as improvements in transparency for investors of dealer mark-ups and other information related to the pricing of municipal securities. (10/1/2015) MSRB press release.
Disclosure of mark-ups. The MSRB published proposed amendments to MSRB Rule G-15 that would require dealers acting as principal to disclose to retail customers their mark-up from the prevailing market price of a municipal security if the dealer makes a corresponding trade within two hours of the customer trade. The proposed amendments also would require all retail customer confirmations to include a link to the main page for the security on the MSRB’s Electronic Municipal Market Access website. Comments should be submitted by November 20, 2015. (9/24/2015) MSRB press release.
FINRA investor alert. FINRA released an Investor Alert entitled “Smart Beta - What You Need to Know.” The alert is intended to educate investors about financial products, primarily ETFs, which are linked to and seek to track the performance of alternatively weighted indices, commonly known as “smart beta” indices. (9/23/2015) FINRA press release.
FINRA will propose new consumer protection rule. FINRA’s Board of Governors voted to approve the proposal of a rulemaking that would allow a firm to place a temporary hold on a disbursement of funds or securities and notify a customer’s trusted contact when the firm has a reasonable belief that financial exploitation is occurring. The new FINRA rule would not create a duty to place temporary holds on disbursements but would provide firms with a safe harbor to exercise discretion in placing temporary holds on disbursements. (9/17/2015) FINRA press release.