FINRA has changed the date on which its new know-your-customer and suitability rules will take effect. The new effective date is Continue reading
FINRA has changed the date on which its new know-your-customer and suitability rules (previously mentioned in this exam alert) will take effect. The new effective date is July 9, 2012. FINRA has also answered questions from firms about the new rules; the questions and answers may be found here.
http://www.finra.org/Industry/Regulation/Notices/2011/P123702
The SEC has proposed a rule to increase the dollar amount thresholds for “qualified clients” (clients that may be Continue reading
The SEC has proposed a rule to increase the dollar amount thresholds for “qualified clients” (clients that may be charged performance-based fees by an investment adviser). The current rule requires a qualified client to have $750,000 in assets under management or $1.5 million in net worth. Under the proposed rule, these thresholds will be increased to $1 million in assets under management and $2 million in net worth. This revision is required to occur by July 21, 2011. Relevant to sections 4.3.3 of the Series 24 exam, as well as the Series 63, Series 65 and Series 66 exams.
Effective January 1, 2011, the IRS requires that when broker-dealers and mutual funds purchase stocks, the cost basis of the stocks must be reported to Continue reading
Effective January 1, 2011, the IRS requires that when broker-dealers and mutual funds purchase stocks, the cost basis of the stocks must be reported to the IRS and to investors. In 2011, this reporting requirement only applies to most stocks, while in 2012 and beyond, the requirement will apply to all stocks. In 2011, the rule will not apply to mutual fund shares and shares purchased via dividend reinvestment plans. Relevant to the Series 6, Series 7, Series 62, Series 65, and Series 66 exams.
IRS news release: http://www.irs.gov/newsroom/article/0,,id=228907,00.html
Analysis by the Securities Technology Monitor: http://www.securitiestechnologymonitor.com/photo_gallery/1_36/27400-1.html
According to the Wall Street Journal, the SEC is putting the finishing touches on a new uniform manual for its examiners. The WSJ states that the SEC expects Continue reading
According to the Wall Street Journal, the SEC is putting the finishing touches on a new uniform manual for its examiners. The WSJ states that the SEC expects that the new manual will nationalize the agency’s examination program, allowing for uniform processes and procedures across all regional offices. The SEC intends to distribute the manual to examiners in 30 to 60 days and to the public in 30 to 90 days (as of 2/8/11), according to the WSJ.
http://online.wsj.com/article/SB10001424052748704364004576132231587877342.html
On February 15, 2011, Deutsche Boerse AG and NYSE Euronext announced a merger between the two companies. The combined company will serve as “the world’s Continue reading
On February 15, 2011, Deutsche Boerse AG and NYSE Euronext announced a merger between the two companies. The combined company will serve as “the world’s largest trading powerhouse,” according to the Securities Technology Monitor. The name of the combined company has not been announced. The deal has been structured such that Deutsche Boerse shareholders will own 60% of the company, while NYSE Euronext shareholders will own 40%.
http://www.nyse.com/press/1297768048707.html
Effective January 25, 2011, the SEC has adopted new rules concerning shareholder approval of executive compensation. The new rules require Continue reading
Effective January 25, 2011, the SEC has adopted new rules concerning shareholder approval of executive compensation. The new rules require “say-on-pay” votes to take place at least once every three years. The frequency with which these say-on-pay votes occur must be voted on at least once every six years, and the results of the frequency vote are reported on Form 8-K. Relevant to Series 6, Series 7, Series 62, Series 66, Series 24 and Series 79 exams.
Effective July 21, 2011, investment advisers to most private funds (hedge funds and private equity funds) must register with the SEC. Previously, these Continue reading
Effective July 21, 2011, investment advisers to most private funds (hedge funds and private equity funds) must register with the SEC. Previously, these advisers had been exempt due to the “private adviser”” exemption. The Dodd-Frank Act replaces this exemption with narrower exemptions for certain advisers, including advisers that exclusively advise venture capital funds and private fund advisers with less than $150 million in assets under management in the United States.
http://www.sec.gov/spotlight/dodd-frank/hedgefundadvisers.shtml
Effective October 7, 2011, broker-dealers must adhere to stricter know-your-customer and suitability standards than before. The new rules require Continue reading
Effective October 7, 2011, broker-dealers must adhere to stricter know-your-customer and suitability standards than before. The new rules require that consideration be given to a customer’s age, investment experience, time horizon, liquidity needs and risk tolerance, in addition to factors that were already required to be considered (other holdings, financial situation and needs, tax status and investment objectives). These new requirements are similar to the fiduciary standard used by investment advisers. Relevant to the Series 7, Series 66, Series 24, Series 62 and Series 79 exam.
http://www.finra.org/Industry/Regulation/Notices/2011/P122779
As of January 1, 2011, new and renewing investment advisory firms and investment advisor representatives must file electronically through the Continue reading
As of January 1, 2011, new and renewing investment advisory firms and investment advisor representatives must file electronically through the Investment Advisor Registration Depository (IARD). Also, as of January 1, 2011, in Oregon it is mandatory to file the new Part 2 of Form ADV.
A 2010 NASAA review of broker-dealers found that the three most common compliance problem areas were failure to follow supervisory policy, Continue reading
A 2010 NASAA review of broker-dealers found that the three most common compliance problem areas were failure to follow supervisory policy, advertising and sales literature, and suitability issues. NASAA developed a list of ten best practices and released them in October of 2010. The recommendations focus on suitability, exception reports, supervisory procedures, and communications. Relevant to Series 6, Series 7, Series 63, Series 65, Series 66, Series 24, Series 26, Series 62 and Series 79. The list can be found here: http://www.nasaa.org/NASAA_Newsroom/Current_NASAA_Headlines/13382.cfm.
