Financial Industry Re gulatory Authority
FINRA Sticks to Overseeing Brokers
On April 10th, The Wall Street Journal reported an interview with Richard Ketchum, the chairman and chief executive of Financial Industry Regulatory Authority’s (“FINRA”), saying that they will not pursue overseeing registered invest advisors (“RIA”) but will stick to overseeing brokers who operate under a different set of rules than RIAs. Ketchum said Congress should provide additional funding to the SEC to examine investment advisory firms. RIAs.
FINRA Looks at Bond Trading Profits at Banks
On April 11th, The Wall Street Journal reported that FINRA is looking at trading profits of banks to determine whether they have earned unusually high profits on bonds. Bond Trading.
FINRA Proposes Fee Schedule Change
On April 9th, the SEC published FINRA’s notice of filing of a proposed rule change to adopt FINRA Rule 4553 (Fees for ATS Data) to establish a fee schedule for optional professional access to alternative trading system (“ATS”) volume information published by FINRA on its website. FINRA is proposing to establish a fee for professional access to the data in order to recover the costs associated with collecting, formatting, and disseminating the data. Comments should be submitted within 21 days after publication in the Federal Register, which is expected soon. SEC Release 34-71919.
FINRA Proposes Rule Change to Amend the Security Futures Risk Disclosure Statement
On April 9th, FINRA submitted a rule change to the October 2002 Security Future Risk Disclosure Statement to the SEC. The rule change discloses that settlement by physical delivery may be effected on a timeframe shorter than three business days based on the rules of the exchange and subject to the National Securities Clearing Corporation’s Rules and Procedures. FINRA believes that the proposed supplement, by updating the security futures risk disclosure statement, will help to accurately inform customers of the characteristics and risks of security futures. SR-FINRA-2014-019.
FINRA Releases Spring Firm Element Advisory
On April 11th, the Securities Industry/Regulatory Council on Continuing Education has released its Spring 2014 Firm Element Advisory (“FEA”). The Council produces the FEA to identify regulatory and sales practice topics that firms should consider in their Firm Element training plans. FINRA Information Notice 14-16.
FINRA Requests Comments on Communications with the Public Rules
FINRA published a notice asking for comments on several communications about public rules to assess their effectiveness and efficiency. The Notice outlines the general retrospective rule review process and seeks responses to several questions related to firms’ experiences with these specific rules. Comment period expires on May 8, 2014. FINRA Regulatory Notice 14-14.
FINRA Reviewing Gifts and Gratuities and Non-Cash Compensation Rules
FINRA is conducting a retrospective review of the gifts and gratuities and non-cash compensation rules to assess their effectiveness and efficiency. Comments on the rules should be submitted by May 8, 2014. FINRA Regulatory Notice 14-15.
NASDAQ OM X Group
NASDAQ Proposes Change to PowerShares
On April 7th, the SEC published NASDAQ’s notice of filing of a proposed rule change relating to the listing and trading of the shares of the PowerShares Multi-Strategy Alternative Portfolio, a series of PowerShares Actively Managed Exchange-Traded Fund Trust. NASDAQ proposes to list and trade the Shares of the Fund under Nasdaq Rule 5735, which governs the listing and trading of Managed Fund Shares on the Exchange. Comments should be submitted within 21 days after publication in the Federal Register, which is expected soon. SEC Release 34-71892.
Longer Period Designated for Proposed Rule to Adopt NYSE Arca Equities Rule 8.900
On April 7th, the SEC designated May 27, 2014 as the date by which it will approve, disapprove, or institute disapproval proceedings regarding the proposed rule change which permits the listing and trading of managed portfolio shares and to list and trade shares of ActiveShares Large-cap fund, ActiveShares Mid-cap fund, and ActiveShares Multi-cap fund. SEC Release 34-71895.
NYSE Proposes Rule Change to Hull Tactical US ETF
On April 7th, the SEC published NYSE Arca’s proposed rule change related to the listing and trading of Hull Tactical US ETF under NYSE Arc Equities Rule 8.600. The fund will be actively managed and will seek to achieve its investment objective by taking long and short positions in one or more exchange traded funds (“ETFs”) that seek to track the performance of the S&P 500 Index. Comments should be submitted within 21 days after publication in the Federal Register, which is expected soon. SEC Release 34-71894.
Chicago Board Options Exchange
CBOE Proposes to Change to Multi-Class Spread Orders
On April 4th, the SEC published the Chicago Board of Exchange’s proposed to amend its rule related to Multi- Class Broad-Based Index Option Spread Orders and its Rule 24.19. Comments should be submitted within 21 days after publication in the Federal Register, which is expected soon. SEC Release 34-71872.
Options Cle aring Corporation
OCC Proposes Changes to Margin Assets
On April 9th, the SEC published the Options Clearing Corporation (“OCC”) proposal to amend its Rules to eliminate preferred stock and corporate bonds as acceptable forms of margin assets. OCC is also proposing additional amendments to eliminate a provision that automatically renders a common stock as ineligible for deposit if it is subject to special margin requirements under the rules of the listing market, and to also eliminate certain provisions from the Rules that will no longer be applicable upon the elimination of preferred stock as an acceptable form of margin asset. Comments should be submitted within 21 days after publication in the Federal Register, which is expected soon. SEC Release 34-71910.
ICE Clear Europe
Rule to Clear New Sovereign Contracts Approved
On April 9th, the SEC approved ICE Clear Europe’s proposed rule to clear New Sovereign Contracts as it believes the rule will safeguard securities and funds which are in custody of the clearing agency and protect investors and the public interest. SEC Release 34-71920.
De pository Trust Company and National Se curitie s Cle aring Corporation
DTC and NSCC Propose Changes to ACATS
On April 7th, the SEC published for comment the proposed rules of the Depository Trust Company (“DTC”) and National Securities Clearing Corporation (“NSCC”) for changes to the DTC Settlement Service Guide Relating to the Automated Customer Account Transfer Service (“ACATS”) of the NSCC. The proposed rule change provides for enhancements relating to the processing of customer securities which would support finality of transfers of customer securities. Comments should be submitted within 21 days after publication in the Federal Register, which is expected soon. SEC Release 34-71886; SEC Release 34-71887.