Category Compliance newsflash

Compliance Newsflash for March 26, 2020 – SEC Extends Conditional Exemptions From Reporting and Proxy Delivery Requirements for Public Companies, Funds, and Investment Advisers Affected By Coronavirus Disease 2019 (COVID-19)

Today, the Securities and Exchange Commission announced that it is extending the filing periods covered by its previously enacted conditional reporting relief for certain public company filing obligations under the federal securities laws, and that it is also extending regulatory relief previously provided to funds and investment advisers whose operations may be affected by COVID-19. In addition, the SEC's Division of Corporation Finance issued today its current views regarding disclosure considerations and other securities law matters related to COVID-19.

Compliance Newsflash for March 26, 2020 – Pandemic-Related Business Continuity Planning, Guidance and Regulatory Relief

Due to the recent outbreak of coronavirus disease (COVID-19), FINRA reminds member firms to consider pandemic-related business continuity planning, including whether their business continuity plans (BCPs) are sufficiently flexible to address a wide range of possible effects in the event of a pandemic in the United States. Each member firm is also encouraged to review its BCP to consider pandemic preparedness and to review its emergency contacts to ensure that FINRA has a reliable means of contacting the firm. This Notice also provides pandemic-related guidance and regulatory relief to member firms from some requirements. As coronavirus-related risks decrease, member firms should expect to return to meeting any regulatory obligations for which relief has been provided.

Compliance Newsflash for March 18, 2020 – FINRA Requests Comment on a Proposal to Implement the Recommendations of the CE Council Regarding Enhancements to the Continuing Education Program for Securities Industry Professionals

FINRA seeks comment on a proposal to implement the recommendations of the Securities Industry/Regulatory Council on Continuing Education (CE Council) enhancing the continuing education requirements for securities industry professionals. The proposal would change the: (1) Regulatory Element to provide annual training, make the content more relevant, incorporate diverse instructional formats, publicize the learning topics in advance and enhance the related management systems; (2) Firm Element to expressly recognize other training requirements, improve the guidance and resources available to firms and establish a content catalog; and (3) Continuing Education Program to enable individuals who terminate their registrations the option of maintaining their qualification by completing continuing education.

Compliance Newsflash for March 18, 2020 – SEC Takes Targeted Action to Assist Funds and Advisers, Permits Virtual Board Meetings and Provides Conditional Relief from Certain Filing Procedures

On March 13th, the SEC announced regulatory relief for funds and investment advisers whose operations may be affected by the coronavirus. The relief provided today covers in-person board meetings and certain filing and delivery requirements for certain investment funds and investment advisers. The impacts of the coronavirus may delay or prevent funds and advisers operating in affected areas from meeting certain regulatory obligations due to restrictions on large gatherings, travel and access to facilities, the potential limited availability of personnel and similar disruptions. Today's relief is designed to enable funds and advisers to meet those obligations and to continue their operations, while recognizing that there may be temporary disruptions outside of their control.

Compliance Newsflash for March 11, 2020 – SEC Proposes Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework

The Securities and Exchange Commission today announced that it has voted to propose a set of amendments that would harmonize, simplify, and improve the exempt offering framework to promote capital formation and expand investment opportunities while preserving and enhancing important investor protections. Offerings of securities must be either registered with the Commission or qualify for an exemption from the Commission's registration requirements. A majority of entrepreneurs and emerging businesses raise capital using the exempt offering framework. This capital formation activity ranges from seed capital for new businesses to growth capital for companies on the path to an initial public offering. The proposals are the most recent step in the Commission's ongoing efforts to assess the capital raising framework as a whole and improve it for the benefit of investors, entrepreneurs, and more seasoned issuers.

Compliance Newsflash for March 11, 2020 – SEC plans Step-Up of Reg BI Enforcement Amid Stretched Resources

The SEC will begin taking a hard look at how the new Regulation Best Interest is informing the product recommendations that brokers make early next year - a significant step up from the implementation exams that will start as soon as the rule takes effect at the end of June, a senior SEC official said. In the interim, brokers and advisors can expect more clarifying guidance on how their firms will be expected to implement the various aspects of the rulemaking package, including publication of risk alerts on Reg BI and the Form CRS relationship summary "very soon" - likely later this month - according to Peter Driscoll, the director of the SEC's Office of Compliance Inspections and Examinations.

Compliance Newsflash for March 4, 2020 – SEC Fires Back in Reg BI Court Battle

Regulation Best Interest should be upheld because it "reasonably balances" the Securities and Exchange Commission's regulatory objective, and reflects the agency's concern that "requiring broker-dealers to conform to a regulatory regime that is tailored to the services and fee arrangements offered by investment advisors would reduce the availability of brokerage services," attorneys for the agency told an appeals court Tuesday.

Compliance Newsflash for March 4, 2020 – FINRA Requests Comment on a Proposal to Implement the Recommendations of the CE Council Regarding Enhancements to the Continuing Education Program for Securities Industry Professionals

FINRA seeks comment on a proposal to implement the recommendations of the Securities Industry/Regulatory Council on Continuing Education (CE Council) enhancing the continuing education requirements for securities industry professionals. The proposal would change the following: Regulatory Element to provide annual training, make the content more relevant, incorporate diverse instructional formats, publicize the learning topics in advance and enhance the related management systems; Firm Element to expressly recognize other training requirements, improve the guidance and resources available to firms and establish a content catalog; and Continuing Education Program to enable individuals who terminate their registrations the option of maintaining their qualification by completing continuing education.

Compliance Newsflash for February 27, 2020 – SEC to Hold National Compliance Outreach Seminar for Investment Companies and Investment Advisers

The SEC announced the opening of registration for its compliance outreach program's national seminar for investment companies and investment advisers. The event is intended to help Chief Compliance Officers (CCOs) and other senior personnel at investment companies and investment advisory firms enhance their compliance programs for the protection of investors.

Compliance Newsflash for February 27, 2020 – SEC Publishes Frequently Asked Questions on Regulation Best Interest

On June 5, 2019, the SEC adopted Regulation Best Interest ("Regulation BI") to improve investor protection by establishing a standard of conduct for broker-dealers making recommendations to retail customers. Firms must bring their operations into compliance by June 30, 2020. On January 10, 2020 and February 11, 2020, the SEC Staff published and then supplemented responses to a series of Frequently Asked Questions ("FAQs") it has received regarding Regulation BI.