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On April 25, the Commodity Futures Trading Commission approved a proposed rule intended to improve the quality of swap data and update and streamline regulations related to the operations and governance of swap data repositories (SDRs) (Rule Proposal). Among other items, the Rule Proposal is intended to update requirements related to the following: 1) the verification by SDRs of swap data with reporting counterparties; 2) the correction of swap data errors and omissions for SDRs,…
On April 29, the Commodity Futures Trading Commission proposed a series of amendments to regulations that apply to derivatives clearing organizations (DCOs) under Part 39 of the CFTC’s regulations, which implements the statutory core principles for DCOs (Rule Proposal). The Rule Proposal is intended, among other things, to streamline the DCO registration and reporting process, address certain risk management and reporting obligations, and add new requirements regarding default procedures and event-specific reporting in response to…
On May 1, the Commodity Futures Trading Commission’s Division of Clearing and Risk and Office of the Chief Economist jointly issued, CCP Supervisory Street Tests: Reverse Stress Test and Liquidation Stress Test (Stress Test), which is a two-part report covering the results of 1) a reverse stress test of central counterparties (CCPs) or clearinghouses resources; and 2) an analysis of stressed liquidation costs.…
On April 5, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to extend the pilot program related to FINRA Rule 6121.02 (Market-wide Circuit Breakers in NMS Stocks), which provides a methodology for determining when to halt trading in all national market system stocks due to extraordinary market volatility, i.e., market-wide circuit breakers. The original term of the pilot program was intended to coincide with the pilot period…
On April 8, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to adopt the remaining National Association of Securities Dealers (NASD) Rules and Incorporated NYSE Rules as FINRA Rules in the Consolidated FINRA Rulebook without any substantive changes. The rule change covers areas such as membership rules, foreign members, customer account statements, discretionary accounts, approvals of changes in exempt status under Rule 15c3-3 of the Securities Exchange…
On April 5, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to extend the pilot program related to FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities). In September 2010, the SEC approved, on a pilot basis, changes to the rule that, among other things: (i) provided for the uniform treatment of clearly erroneous execution reviews in multi-stock events involving 20 or more securities, and (ii) reduced FINRA’s…
On April 9, the Financial Industry Regulatory Authority issued Regulatory Notice 19-11 informing member firms that FINRA has updated its Interpretations of Financial and Operational Rules to add a new interpretation related to Rule 15c3-1(c)(2)(viii)(C)/06 of the Securities Exchange Act of 1934 (Open Contractual Commitments). The new interpretation relates to the conditions under which an underwriting backstop agreement in a firm commitment underwriting would not give rise to an open contractual commitment charge. The Notice is…
On April 5, the Financial Industry Regulatory Authority issued Regulatory Notice 19-10 addressing the responsibilities of member firms when communicating with customers about the departure of registered representatives who have direct contact with customers in the conduct of such member firm’s securities sales. The Notice reinforces two key expectations related to such communications. First, in the event of a registered representative’s departure, member firms are expected to promptly and clearly communicate to affected customers how…
On April 11, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to adopt FINRA Rules 6190 (Compliance with Regulation NMS Plan to Address Extraordinary Market Volatility) and 6121.01 (Resumption of Trading in Securities Subject to the Regulation NMS Plan to Address Extraordinary Market Volatility), which implement the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS (Limit Up-Limit Down Plan), on a permanent…
On April 11, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to make certain substantive, organizational and terminology changes to FINRA Rule 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements), which requires member firms that participate in a public offering to file documents and information with FINRA about the underwriting terms and arrangements.…