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The Financial Industry Regulatory Authority has extended the deadline for member firms to self-report violations under the 529 Plan Share Class Initiative to April 30. The extension will allow firms to have more time to review their supervisory systems and procedures with respect to their 529 plan transactions. A more detailed discussion of the Plan Share Class Initiative is available here. FINRA recently issued a Frequently Asked Questions about the 529 Plan Share Class…
The Financial Industry Regulatory Authority’s Office of the Chief Economist has released a working paper (Study), maintaining that institutional orders routed by brokers that send a high percentage of such orders through affiliated alternative trading systems (ATSs) tend to receive lower order fill rates and higher execution costs. The Study examined order-handling information over the life of 330 million orders, routed by 43 active institutional brokers for a sample of 273 stocks during October 2016.…
This month, the Financial Industry Regulatory Authority (FINRA) issued a report summarizing various findings from recent examinations of its member firms (Report). In particular, the Report sets forth selected observations from recent examinations that FINRA considers worth highlighting because of their potential significance, frequency and impact on investors and the markets. The Report also describes compliance and supervisory practices that FINRA has observed to be effective in certain circumstances.…
On November 5, the Commodity Futures Trading Commission held an open meeting to consider the following matters relating to swaps and swap execution facilities: Final Rule: Amending the De Minimis Exception to the Swap Dealer Definition Proposed Rule: Amendments to Regulations on Swap Execution Facilities and Trade Execution Requirement Request for Comment Regarding the Practice of “Post-Trade Name Give-Up” on Swap Execution Facilities…
On September 24, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice (Notice) reminding firms of their applicable obligations when publishing a quote in an OTC security, in addition to filing a Form 211. Securities Exchange Act of 1934 (SEA) Rule 15c2-11 prevents a broker-dealer from initiating quotations in an OTC security unless such broker-dealer has reviewed and verified that certain information about the issuer is accurate and from a reliable source. FINRA Rule…
On September 4, the Commodity Futures Trading Commission, in conjunction with the Office of the Comptroller of the Currency, Treasury, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and Securities and Exchange Commission, extended the comment period on the proposed amendments to the regulations implementing Section 13 of the Bank Holding Company Act. Section 13, commonly known as the Volcker Rule, restricts the ability of a banking entity and…
On September 6, the National Futures Association (NFA) sent a notice to its members with information regarding the Interpretive Notice to NFA Compliance Rule 2-49. NFA Compliance Rule 2-49 requires swap dealers and major swap participants (collectively, SDs) to promptly submit relevant information to the NFA in the form and manner prescribed by NFA. The Interpretive Notice, which went into effect on January 2, describes the swap valuation disputes that require notice and the information…
On July 30, the Financial Industry Regulatory Authority (FINRA) issued a Special Notice requesting comment on how to continue to foster financial technology (fintech) innovation in the financial services industry. In particular, to support its mission of investor protection and market integrity, FINRA is seeking comment from market participants on how FINRA rules or administrative processes could be modified to better facilitate fintech innovation. In addition, FINRA requests comment on three specific areas: the provision…
On July 26, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice requesting comment on a proposal to the NASD Rule 1010 Series (collectively, the “Membership Application Program” rules). The Membership Application Program rules govern how FINRA’s Department of Member Regulation (the Department) reviews new membership applications and continuing membership applications (CMAs). An applicant must be able to show its ability to comply with the standards set forth in the Membership Allocation Program rules,…
The Financial Industry Regulatory Authority recently filed a proposed rule change with the Securities and Exchange Commission to amend FINRA Rule 6730 regarding transaction reporting. Currently under Rule 6730, US Treasury Securities transactions executed on an alternative trading system (ATS) must be reported to the Transaction Reporting and Compliance Engine (TRACE) by the ATS itself and by the counterparties to the trade, but only if the counterparties are FINRA members. The identities of counterparties that…