Proposed Rules

SEC permits more time for comments on proposed resource extraction payments disclosure rule. The Securities and Exchange Commission (SEC) reopened the comment period for proposed rules that would require resource extraction issuers to disclose payments made to the US or foreign governments for commercial development purposes. Initial comments on the proposal are due on or before February 16, 2016. Reply comments responding to matters raised during the initial comment period are due on or before March 8, 2016. (1/21/2016) SEC Release No. 34-76958. 

No-Action Relief

CME receives no-action relief for limited clearing activities for certain single-name CDS contracts. The SEC’s Division of Trading and Markets indicated in a no-action letter that it would not recommend enforcement action against the Chicago Mercantile Exchange Inc. and its credit default swap (CDS) clearing members if they perform limited clearing activities for specified single-name CDSs that reference a component of a broad-based index that is “spun out” of that broad-based index CDS. (1/20/2016) SEC no-action letter.


SEC publishes guide for small entities on funding portal registration. The SEC’s Division of Trading and Markets issued a small entity compliance guide containing answers to frequently asked questions and other information regarding funding portal registration requirements and procedures. (1/29/2016) SEC Funding Portal Registration Guide.

SEC revises XBRL guidance. The SEC’s Division of Economic and Risk Analysis updated its guidance on the SEC’s interactive data disclosure rules. (1/26/2016) SEC XBRL FAQs.

Selected Enforcement Actions

Brokerage firm violated anti-money laundering rules by failing to verify customer identities. The SEC charged a Miami-area brokerage firm in a settled administrative proceeding for violating anti-money laundering rules under the Securities Exchange Act by failing to verify the identities of certain foreign customers before providing investment advice or assisting them in buying and selling securities. Without admitting or denying the allegations, the firm agreed to settle the charges by consenting to the entry of cease-and-desist and censure orders, paying a civil penalty in the amount of US$1,000,000, and complying with the requirement to enlist the services of an independent compliance consultant. (2/4/2016) In the Matter E.S. Financial Services, Inc. n/k/a Brickell Global Markets, Inc., SEC Release No. 34-77056.

SEC charges lending company and brokerage firm with misleading investors in private placement offering. The SEC filed a contested civil proceeding charging a lending company and its owner with misleading investors in a private placement offering of high-yield securities when they falsely stated that the company’s financial statements would be audited each year and the company was governed by a Board of Managers. The SEC also alleged that the company and its owner provided account statements to investors that failed to disclose that the company could not pay investors their stated account balances due to deteriorating loan values. In addition, the SEC brought charges against a brokerage firm that acted as the placement agent, along with two firm executives, who learned of the inaccuracies in the lending company’s offering documents but continued to use them to solicit investors. The SEC has charged the lending company, its owner, the brokerage firm and its owner with violating Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10b-5. The lending company’s owner, the brokerage firm’s owner, and the brokerage firm’s president have also been charged with aiding and abetting and control person liability. (2/3/2016) SEC v. American Growth Funding II, LLC, Portfolio Advisors Alliance, Inc., Ralph C. Johnson, Howard J. Allen III, and Kerri L. Wasserman, SEC Lit. Release No. 23459.

Statements and Speeches

Cohen testifies regarding SEC’s enforcement efforts in EB-5 Immigrant Investor Program. In testimony before the Senate Judiciary Committee, the SEC’s Division of Enforcement Associate Director Stephen L. Cohen discussed the SEC’s work investigating and bringing enforcement actions relating to securities violations and fraud in the United States Citizenship and Immigration Services’ (USCIS) EB-5 Immigrant Investor Program. (2/2/2016) Cohen testimony. 

White says SEC will turn attention to board diversity. Speaking at a Q&A session at the Securities Regulation Institute, SEC Chair Mary Jo White reflected on her tenure at the SEC, provided an overview of the SEC’s accomplishments during 2015, and discussed the SEC’s priorities for rulemaking initiatives in 2016. White indicated that the SEC may propose new rules that would require companies to disclose more information about the diversity of their boards, along with completing proposed executive compensation rules. (1/26/2016) White remarks.

Ceresney discusses Enforcement’s work in targeting financial reporting misconduct. SEC Division of Enforcement Director Andrew Ceresney delivered a keynote address in which he emphasized the Division’s efforts to pursue financial reporting deficiencies aggressively and proactively, highlighting the use of the Corporate Issuer Risk Assessment program to detect suspicious patterns in financial statements. (1/25/2016) Ceresney remarks.

Chair White’s remarks to the Investor Advisory Committee. SEC Chair Mary Jo White reviewed the SEC’s recent rulemaking activities, provided an update on the SEC staff analysis of the events of August 24th, and highlighted the fixed income market structure, pre-trade price transparency and the Financial Accounting Standards Board’s outstanding disclosure proposals in remarks at the Investor Advisory Committee meeting. (1/21/2016) White remarks. 

Pre-trade transparency could be improved, says Piwowar. SEC Commissioner Michael S. Piwowar addressed the Investor Advisory Committee by highlighting the need to improve pre-trade transparency to ensure that the fixed income markets “are working appropriately” for everyone. (1/21/2016) Piwowar remarks.

Higgins provides overview of history and future of global securities markets.SEC Division of Corporation Finance Director Keith Higgins delivered a speech in which he noted the 30th anniversary of the SEC’s study of the globalization of the securities market, reviewed efforts to address challenges posed by cross-border offerings, and considered the effects of crowdfunding, disclosure reform, and interim financial reporting on the global securities markets. (1/21/2016) Higgins remarks.

Other Developments

Advisory Committee on Small and Emerging Companies. The renewed SEC Advisory Committee on Small and Emerging Companies will meet on February 25, 2016. (2/4/2015) SEC Release No. 33-10034.

Staff announcements. The SEC announced that Jane Jarcho will serve as the Deputy Director of the SEC’s Office of Compliance Inspections and Examinations (OCIE). (2/3/2016) The SEC also announced that Susan Nash, Associate Director in the Division of Investment Management, left the agency at the end of January. (1/20/2016)

Equity Market Structure Advisory Committee Meeting. At the SEC’s Equity Market Structure Advisory Committee meeting, SEC Chair Mary Jo White reviewed the findings of the SEC’s staff report on the market volatility of August 24th and informed the committee regarding the SEC’s recent equity market structure initiatives, including proposed rules to increase ATS transparency. See also Piwowar remarks. (2/2/2016) 

SEC and FINRA will conduct Regional Compliance Outreach Programs for Broker-Dealers. The SEC and the Financial Industry Regulatory Authority (FINRA) have opened registration for six Regional Compliance Outreach Programs for broker-dealers that the regulators will co-host this spring and summer. (2/2/2016) SEC press release.

Money market fund statistics. The SEC’s Division of Investment Management published money market fund statistics data as of December 31, 2015.

(1/21/2016) Money market fund statistics.