Technical support FAQs for EDGAR filers. The Securities and Exchange Commission published frequently asked questions and answers prepared by the EDGAR Filer Technical Support Team, which include information about obtaining CIKs for EDGAR access, error messages, and browser requirements. (9/6/2016)SEC EDGAR Filer Technical Support Frequently Asked Questions.
BlackRock receives SEC’s permission to participate in joint lending and borrowing facility. The SEC issued an order granting an exemption from several sections of the Investment Company Act and Rule 17d-1 to various BlackRock funds that will allow them to participate in a joint lending and borrowing facility. (9/6/2016)
Selected Enforcement Actions
Executive of IT company’s Chinese subsidiary settles FCPA charges. The SEC instituted settled administrative proceedings against the former chairman and CEO of a China-based subsidiary of an international communications and information technology company for violations of the Foreign Corrupt Practices Act. The SEC alleged that the CEO of Harris Corporation’s Chinese subsidiary operated a bribery scheme in which he arranged for illegal gifts to Chinese government officials to obtain and retain business, and circumvented Harris’s internal accounting controls by recording false information about the gifts in the subsidiary’s books and records. Without admitting or denying the allegations, the CEO settled the charges by consenting to the entry of a cease-and-desist order and agreeing to pay a civil penalty of US$46,000. (9/13/2016) In the Matter of Jun Ping Zhang, SEC Release No. 34-78825.
Health product company executive fraudulently touted company’s stock. The SEC brought civil charges against the CEO of a health products company and a paid promoter for fraudulently promoting the company’s stock. The SEC alleged that the CEO of Empowered Products Inc. hired the promoter to work for the CEO’s separate newsletter publishing business and assist him in writing online newsletter articles to promote the company, which they falsely attributed to independent authors. The CEO and his employee hired promoters to distribute the promotional articles without disclosing that Empowered Products and the CEO approved and paid for the advertisements. (9/6/2016) SEC press release.
Speeches and Statements
Disruptive trading rule on hold, ATS transparency rule moving forward. In a speech at the Security Traders Association’s Annual Market Structure Conference, SEC Chair Mary Jo White said that the SEC will consider a final proposal for rules requiring disclosures by alternative trading systems about their operations in the next few months. White also said that the SEC would wait to propose an anti-disruptive trading rule until after it received comments on staff’s work in this area, describing the task of “developing the right regulatory response” to disruptive trading practices as “difficult.” (9/14/2016) White remarks.
Ceresney reviews impact of SEC’s whistleblower program. In a speech at the Sixteenth Annual Taxpayers against Fraud Conference, SEC Division of Enforcement Director Andrew Ceresney discussed the impact of the SEC’s whistleblower program and provided an overview of the different types of whistleblowers that have participated in the program. (9/14/2016) Ceresney remarks.
White says fiduciary rule proposal not imminent. Investment News reported on SEC Chair Mary Jo White’s remarks during a question-and-answer session at the North American Securities Administrators Association conference. White said that SEC commissioners are considering staff recommendations on a potential rule to raise standards for retail investment advice, but the agency does not plan to issue a proposed rule in the near future. (9/12/2016)
Piwowar addresses issues facing corporate and municipal bond markets. SEC Commissioner Michael S. Piwowar discussed recent regulatory efforts related to the fixed income market structure, the need for pre-trade price transparency, and possible changes to the reach of the Tower Amendment to permit the SEC to regulate certain issuers of municipal debt, at the Financial Industry Regulatory Authority’s 2016 Fixed Income Conference. (9/7/2016) Piwowar remarks.
Small and Emerging Companies Advisory Committee meeting. The SEC’s Advisory Committee on Small and Emerging Companies will hold a public meeting on October 5, 2016. Written statements are due on or before October 3, 2016. SEC Release No. 33-10208.
SEC awards US$4 million to whistleblower. The SEC announced that it has awarded over US$4 million to a whistleblower who provided original information about a fraud that led to a successful enforcement action. (9/20/2016) SEC press release.
EDGAR updates. The SEC published the EDGAR ABS XML Technical Specification (Version 1.3) and the EDGAR Filer Manual (Volume II) EDGAR Filing (Version 38). (9/19/2016)
SEC publishes list of rules under review pursuant to Regulatory Flexibility Act.The SEC released the list of rules scheduled for review pursuant to the Regulatory Flexibility Act that have a significant economic impact upon a substantial number of small entities. Comments are due on or before October 20, 2016. (9/15/2016) SEC Release No. 33-10209. SEC Commissioner Michael S. Piwowar noted that by including Regulation NMS in the list of rules under review, the SEC has the opportunity to consider changes to the rules as a part of “a comprehensive equity market structure review program.” Piwowar remarks.
Staff announcements. The SEC announced that Jennifer Marietta-Westberg, Deputy Chief Economist and Deputy Director of the SEC’s Division of Economic and Risk Analysis, will leave the agency to join the private sector. (9/15/2016) The SEC named Sarah G. ten Siethoff to serve as the Deputy Associate Director in the Division of Investment Management’s Rulemaking Office. (9/7/2016)
Investor Advocate encourages SEC to extend proposed ATS disclosure requirements to fixed income ATSs. In a letter to the SEC, Investor Advocate Rick A. Fleming indicated his support for the SEC’s proposed amendments to Regulation ATS, which would require ATSs to disclose additional information about their operations and activities. Fleming also urged the SEC to modify the proposal to require ATSs that transact solely in government securities to file the current version of Form ATS and to make filings on current Form ATS public for all fixed income ATSs. (9/9/2016) Investor Advocate letter.
OCIE announces supervision initiative targeting advisers that employ representatives with disciplinary histories. The SEC’s Office of Compliance Inspections and Examinations announced that it will conduct an examination sweep of supervision practices at registered investment advisers, with a specific focus on firms’ business and compliance practices related to the supervision of employees who have a history of disciplinary actions. The examinations will focus on key risk areas, including advisers’ compliance programs; disclosures of regulatory and disciplinary actions; conflicts of interest in financial arrangements initiated by higher-risk employees; and marketing materials. (9/12/2016) OCIE Risk Alert.
MIAX PEARL seeks registration as national securities exchange. MIAX PEARL, LLC submitted an application to the SEC seeking registration as a national securities exchange operating a fully automated electronic trading platform for the trading of listed options. Comments are due on or before October 31, 2016. (9/8/2016) SEC Release No. 34-78793.
SEC issues revised Form ADV. The SEC released a revised version of FORM ADV that reflects many of the changes to the form resulting from the SEC’s recently adopted amendments to disclosure requirements for investment advisers under the Investment Advisers Act. (9/7/2016) Revised Form ADV.