Search results

To address practical issues broker-dealers may face in reviewing and revising their policies and procedures in response to FINRA’s new fixed-income research rule, modifications to its equity research rule, and its FAQs regarding conflicts of interest in the offering process.

Reviews FINRA’s new fixed-income research rule, modifications to its equity research rule, and its FAQs regarding the its equity research rule, and provides detailed comparisons between current rules and new rules to help firms consider how to review and revise their policies and procedures.

Although significant exemptions may apply depending on firm structure, under FINRA’s new fixed-income research rule, firms producing fixed-income research reports will now be subject to regulation similar to that FINRA has imposed on firms producing equity research reports, including with respect to information barriers, other policies and procedures, and certain disclosures. The modified FINRA equity research rule retains the core provisions of the existing NASD and NYSE equity research rules and adds a “principles-based procedures” approach to potential conflicts of interest, shortens or eliminates quiet periods, and imposes some of the Global Settlement prohibitions on all firms. Firms will need to review and revise their policies and procedures for research in response to these rule changes. Firms should also take note of FINRA’s guidance in its FAQs regarding conflicts of interest in the offering process.

Overview of recent FINRA enforcement activity, rule modifications, and practical guidance from experienced securities and financial services lawyers.

To describe and to discuss the implications of the US Department of the Treasury's PATRIOT Act regulations requiring “covered financial institutions” (including broker‐dealers, banks, and mutual funds) to maintain risk‐based procedures to ensure that: correspondent accounts held on behalf of specified non‐US financial institutions; and private banking accounts, are subject to due diligence procedures to ensure that those accounts, and the financial institutions holding those accounts, are not being used for money laundering purposes.

Summarizes and analyzes the adopted rules.

Since the passage of the USA PATRIOT Act, regulation relating to anti‐money laundering has been among the highest profile – and highest priority – activity of securities and financial institution regulation. Consequently, anti‐money laundering rules and regulations have become a major aspect of compliance programs at financial institutions such as banks and broker‐dealers. The rules that are the subject of this article are noteworthy in part because they continue the trend of widening the universe of “financial institutions” that are now subject to substantial anti‐money laundering regulation. The rules described in this article add substantially to the complexity of anti‐money laundering regulation at financial institutions for a number of reasons, including: firstly, placing new, broad‐based requirements on financial institutions; secondly, requiring those financial institutions to make judgments regarding both the level of risk posed by certain accounts and the appropriate diligence that may be necessary for each such account; and thirdly, interpretive and implementation challenges.

A summary and analysis of new anti‐money laundering regulation, which comes at a time when US regulators are placing substantial emphasis on anti‐money laundering.

The purpose of the paper is to describe the recent amendments to FINRA's IPO Allocation Rule that were approved by the US Securities and Exchange Commission.

The paper provides a description of the IPO Allocation Rule and its operation, followed by a description of the IPO Allocation Rule amendments recently amended.

On November 27, 2013, the Securities and Exchange Commission approved a change to FINRA's IPO allocation rule 5131 (the “amendment”). The amendment allows a fund of funds or other collective investment account that is investing in an IPO to rely on a written representation from an unaffiliated private fund investor that does not look through to its beneficial owners, provided that such unaffiliated private fund is managed by an investment adviser, has assets greater than $50 million, and meets certain other indicia of independence that are described.

The paper provides practical guidance from experienced regulatory lawyers regarding an amendment to an important rule governing IPO sales and allocation practices.

The purpose of the paper is to describe the temporary and permanent exemptions issued by the Securities and Exchange Commission (SEC) to the large trader identification requirements under Rule 13h‐1.

Specifically, the paper provides: an explanation of the definition of a “large trader” as defined under Rule 13h‐1; an overview of the recordkeeping, reporting, and monitoring requirements under Rule 13h‐1; an explanation of the two‐tiered temporary exemption issued by the SEC; and an overview of the permanent exemption adopted by the SEC for certain capital market transactions in connection with determining whether a person is a large trader.

The SEC extended the April 30, 2012 compliance date under Rule 13h‐1 for registered broker‐dealers by 12 months to May 1, 2013; however, broker‐dealers that are either large traders, or have large trader customers that are either broker‐dealers or trade through a “sponsored access” arrangement, must be in compliance by November 30, 2012. The extension affords broker‐dealers additional time to develop, test, and implement recordkeeping and reporting systems required for compliance. Additionally, the SEC issued a permanent exemption for “dribble out” programs or offerings “crossed” on a national securities exchange, which were not originally exempted under the rule. The SEC determined that these transactions should not be counted for the purpose of determining whether a person meets the identifying activity level for a large trader given that the vast majority of primary offerings are excluded under the rule.

The paper provides practical guidance from experienced regulatory lawyers regarding an important proposed change.

The purpose of this paper is to provide frequently asked questions and answers in connection with the large trader reporting system.

The paper explains the large trader rule and filing requirements, including the application of the rule to non‐US entities; definitions, including Securities and Exchange Commission's (SEC's) definition of a “large trader”, a “NMS security”, and “person” for purposes of the rule; filing requirements; and the likely impact of broker‐dealers.

Certain broker‐dealers and entities that meet a trading threshold of aggregate transactions in NMS securities that equal or exceed two million shares or $20m during any calendar day, or 20 million shares or $200m during any calendar month, must file a Form 13H with the SEC.

The rule requires attention to an entity's trading levels, and requires making a filing with the SEC upon meeting certain activity levels.

The paper presents practical guidance from experienced financial services lawyers and compliance officers.

The purpose of this paper is to describe the Securities and Exchange Commission's recently proposed new rules to establish a large trading reporting system.

The paper provides an overview of the new Rule 13h‐1, which, if adopted, would require large traders to identify themselves to the SEC and to be issued a “Large Trader Identification Number”. It outlines the proposed definition of a large trader and describes how a large trader would report itself to the SEC and the broker‐dealers it uses to effect trades using a new Form 13H. The paper also provides detailed guidance to broker‐dealers regarding their books and records obligations under the proposed rule.

The proposed new rule and form are intended to provide the SEC with data to facilitate its ability to assess the impact of the trading activity, to reconstruct trading activity following periods of unusual market volatility, and to analyze significant market events for regulatory purposes. Registered broker‐dealers would also be under an obligation to maintain records of transactions effected in accounts identified to it as large trader accounts; electronically report large trader transaction information to the SEC upon request; and monitor compliance with the new rule.

The paper provides practical guidance from experienced securities lawyers regarding an important proposed change.

This paper aims to provide a detailed description of the four releases issued by the US Securities and Exchange Commission (the “SEC”) on October 14 and 15, 2008 in connection with the three SEC emergency orders that were adopted on September 17 and 18, 2008, relating to the regulation of short selling.

The paper presents a general overview of: Interim Final Temporary Rule 204‐T; Interim Final Temporary Rule 10a‐3T; the Amendments to Regulation SHO; and the Final Rule 10b‐21, each regulating short selling; and highlights each rule's new requirements, the exceptions to those requirements, and the material differences between the new rules and the rules as they were originally adopted.

The Interim Temporary Rules, the Amendments to Regulation SHO and the Final Rule 10b‐21 are important because: Interim Final Temporary Rule 204‐T imposes a penalty on any “participant” of a “registered clearing agency”, as defined below, and any associated broker‐dealer for having a fail‐to‐deliver position at a registered clearing agency in any equity security; Interim Final Temporary Rule 10a‐3T requires certain institutional investment managers to file a new form with the SEC on the last business day of every calendar week subsequent to the manager effecting a short sale; the Amendments to Regulation SHO eliminate the “options market maker exception” from Regulation SHO's close‐out requirement; and Final Rule 10b‐21 prohibits any person from intentionally deceiving a broker‐dealer, or a buyer as to the intention or ability of that person to deliver shares on the settlement date. Each of these actions creates new day‐to‐day compliance responsibility for market participants generally and for US‐registered broker‐dealers in particular.

The paper provides expert guidance on recent SEC releases by experienced securities lawyers.

To explain a No-Action letter recently issued by the USA Securities and Exchange Commission (SEC) permitting persons who qualify as “M&A Brokers” to facilitate the sale of private companies without registering with the SEC as broker-dealers, subject to a number of restrictions.

Explains how persons engaged in merger and acquisition activity have historically been required to register with the SEC, summarizes the conditions to the relief for the newly defined M&A Broker, explains what an M&A Broker can and cannot do, lists 10 criteria an M&A Broker must meet to obtain relief from registration, recommends policies and procedures for companies planning on taking advantage of the exemption from registration, and explains comparable UK legislation that applies to financial advisers advising on investments or arranging deals for M&A transactions.

While many questions and considerations remain, including how this guidance will play out in respect of various state law regimes, the M&A Broker designation has the potential to relieve some of the burdens of registration for advisors specializing in private business combinations.

Practical guidance from experienced securities and financial services lawyers.

This paper aims to describe the NASD's recent proposal modifying NASD Rule 2720, the rule by which underwriting can be conducted where the underwriter and the issuer have a “conflict of interest” as defined by the rules.

Summarizes and analyzes the proposal.

On September 14, 2006, the National Association of Securities Dealers, Inc. (“NASD”) published for initial comment proposed amendments to Conduct Rule 2720 (the “Rule”) relating to conflicts of interest that occur between underwriters and issuers in the context of securities distributions (the “Proposal”). The Proposal substantially changes the Rule, and, as such, adjusts certain aspects of the underwriting process including: where the underwriter and the issuer are affiliates; where the underwriter or its affiliates (including venture capital and private equity arms) have an ownership interest in the issuer; and where the purpose of the securities offering is to repay debt owed to the underwriter or its affiliates.

NASD‐member broker‐dealers may seek to monitor the state of the Proposal in order to ensure that firm policies and procedures are consistent with future changes to the Rule. NASD members will also want to consider how the Proposal signals NASD's changes in thinking in respect of how they approach conflicts of interest in their own businesses.

Alerts practitioners and the industry to a new proposal that has significant consequences for underwriting, particularly in an age of increasingly global financial institutions.

The purpose of this paper is to provide a detailed description of Amendments to Rule 105 of Regulation M adopted by the US Securities and Exchange Commission (the “SEC”) on June 20, 2007

Presents a general overview of short sales and the purpose of Regulation M, a rule that prohibits purchases and sales of securities during specified periods close in time to public offerings of securities; and describes the Amendments, including an expansion of the prohibition under the Rule from a prohibition on “covering” to a prohibition on purchases generally and including three exceptions that pertain to “bona fide” purchases, “separate accounts,” and investment companies.

The Amendments are important because: they expand the scope of the Rule's basic prohibition; they were expanded in part because SEC perceived that circumvention of the Rule was persistent; they permit notable exceptions; and they were adopted close in time to other amendments to the regulation of short sales, including elimination of the price or “tick” tests.

Expert guidance on a recent SEC ruling by experienced securities lawyers.