FINRA reminds broker-dealers of obligations related to contingency offerings. FINRA published a regulatory notice that reminds broker-dealers of their obligation to comply with Securities Exchange Act requirements relating to private placements and public offerings subject to a contingency. The notice responds to FINRA’s review of offering documents, which revealed that some broker-dealers have not complied with their contingency offering requirements, including failing to conduct a reasonable investigation of the security and the issuer’s representations, failing to return subscriber funds after an issuer changed the contingency, and failing to flag offerings in which the issuer used non-bona fide sales. (2/8/2016) FINRA Regulatory Notice 16-08.
Swap valuation dispute notices will be handled by NFA. The National Futures Association provided notice that swap dealers and major swap participants will be required to file notices of swap valuation disputes in excess of US$20 million with the NFA, effective March 1, 2016. (2/2/2016) NFA Notice I-16-07.
Changes to reporting obligations for listed securities transactions effected off the NYSE exchanges. Due to recent rule amendments eliminating NYSE Rule 410B, member organizations of the New York Stock Exchange LLC and NYSE MKT LLC are no longer obligated to report listed securities transactions not reported to the Consolidated Tape to the NYSE or NYSE MKT. (1/29/2016) NYSE Information Memo 16-1.
SEC approves FINRA’s crowdfunding portal rules. FINRA announced that the SEC approved its proposed Funding Portal Rules and related forms that will apply to SEC-registered funding portals that become FINRA members as required under Regulation Crowdfunding. FINRA’s Funding Portal Rules became effective on January 29, 2016, and related forms will be accessible on Firm Gateway beginning on January 29. (1/29/2016) FINRA Regulatory Notice 16-06.
FINRA implements notification requirements for FINRA broker-dealers involved in crowdfunding transactions. The SEC approved FINRA’s proposed Rule 4518, which establishes notification requirements for FINRA broker-dealer members that act as intermediaries in transactions involving the offer and sale of securities pursuant to the crowdfunding provisions of Title III of the JOBS Act and Regulation Crowdfunding. FINRA Rule 4518 became effective on January 29, 2016. (1/29/2016) FINRA Regulatory Notice 16-07.
Revised NFA guide on regulatory requirements for FCMs, IBs, CPOs, and CTAs. The NFA revised its Regulatory Requirements for Futures Commissions Merchants (FCMs), Introducing Brokers (IBs), Commodity Pool Operators (CPOs), and Commodity Trade Advisors (CTAs) to comply with the CFTC’s rulemaking,Enhancing Protections Afforded Customers and Customer Funds held by FCMs and DCOs. (1/21/2016) NFA Regulatory Requirements Guide.
Section 31 fee rate increase. FINRA announced that, beginning on February 16, 2016, the Section 31 fee rate applied to specified securities transactions on the exchanges and in the over-the-counter markets will be US$21.80 per million dollars in transactions. (1/20/2016) FINRA Information Notice.
FINRA offers guidance on requirement to plan for OTC equity trade reporting during systems issues. FINRA published guidance regarding firms’ obligations to establish written policies and procedures to determine a firm’s response in the event of a systems issue, either arising from FINRA facility systems or their own or their vendors’ systems, during the trading day that prevents firms from reporting over-the-counter transactions in equity securities to FINRA. (1/20/2016) FINRA Trade Reporting Notice.
MSRB Board of Directors meeting will focus on confirmation disclosure and bank loans. The Municipal Securities Rulemaking Board announced the agenda for its Board of Directors meeting, which took place on January 27-28, 2016. (1/20/2016) MSRB press release.