Series 7

Exam Alert: Large traders must identify themselves to the SEC

The SEC has adopted rules that require “large traders” to register with the Commission and receive unique identification numbers. The traders must then Continue reading

The SEC has adopted rules that require “large traders” to register with the Commission and receive unique identification numbers. The traders must then provide their broker-dealers with their ID numbers when they make trades, and the broker-dealers must record the ID numbers as part of their recordkeeping and transaction reporting requirements. A “large trader” is a “person whose transactions in exchange-listed securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month.” Relevant to the Series 79, 62, 55, 7, 26, and Series 24 exams.

Source: SEC Release 2011-154

Further Reading: Analysis by the Securities Technology Monitor

Exam Alert: The New Series 99 Exam for Operations Professionals

The SEC recently adopted FINRA’s proposal to create a new Operations Professional Exam to be called the Series 99 exam. This exam will affect people Continue reading

The SEC recently adopted FINRA’s proposal to create a new Operations Professional Exam to be called the Series 99 exam. This exam will affect people involved in back office functions such as recordkeeping, trade confirmation and transaction settlement. Importantly, it will not be required for those who are already licensed under the Series 6 or 7 exams. This new rule goes into effect on October 17, 2011.

Exam Alert: FINRA modifies and delays implementation of maintenance margin requirements for non-margin eligible equity securities

The changes previously mentioned in this exam alert have been pushed back from July 1, 2011, to October 3, 2011. In addition, a provision regarding Continue reading

The changes previously mentioned in this exam alert have been pushed back from July 1, 2011, to October 3, 2011. In addition, a provision regarding the day-trading of non-margin eligible equity securities has been modified. Instead of requiring that firms cancel certain customer trades, firms will need to restrict the day-trading activity of customers who fail to meet a day-trade call.

Source: FINRA Regulatory Notice 11-30

Exam Alert: SEC alters investment adviser registration and reporting requirements

The SEC has adopted changes to the registration and reporting requirements that private fund advisers face. Unless the private fund adviser meets Continue reading

The SEC has adopted changes to the registration and reporting requirements that private fund advisers face. Unless the private fund adviser meets an exemption, they must register with the SEC. Exemptions from registration are provided for venture capital fund advisers and private fund advisers with less than $150 million in assets under management in the U.S., though these advisers must still report certain business information. Foreign private advisers are exempt from the registration and reporting requirements.

Source: SEC Release 2011-133

Exam Alert: Mid-sized advisers must register with the states

The SEC has modified the standards for federal investment adviser registration. They have raised the bar for federal registration from Continue reading

The SEC has modified the standards for federal investment adviser registration. They have raised the bar for federal registration from $25 million in assets under management to $100 million. Advisers with between $25 million and $100 million in assets under management fall into the new category of “mid-sized advisers,” which must register with the states unless they qualify for federal registration based on other criteria. Mid-sized advisers have until June 28, 2012 to register at the state level.

Source: SEC Release 2011-133

Exam Alert: SEC approves exemption from investment adviser registration for “family offices”

On June 22, 2011, the SEC approved an exclusion for “family offices” from the regulations of the Investment Adviser Act of 1940. The new exemption applies Continue reading

On June 22, 2011, the SEC approved an exclusion for “family offices” from the regulations of the Investment Adviser Act of 1940. The new exemption applies to a company that only provides advice to “family clients,” is wholly owned by “family clients,” and does not hold itself out to the public as an investment adviser. “Family clients” include family members, key employees, and certain other clients.

Family offices were typically covered under the exemption for advisers with fewer than 15 clients, but that exemption will be removed under Dodd-Frank changes.

Relevant to the Series 7, 6, 65, 66, 63, 24 and Series 26 exams.

Source: SEC Release 2011-134

Exam Alert: FINRA announces new submission process for Form T

Effective July 5, 2011 FINRA member firms must submit Form T electronically through FINRA’s Firm Gateway rather than email. Form T is a form FINRA requires Continue reading

Effective July 5, 2011 FINRA member firms must submit Form T electronically through FINRA’s Firm Gateway rather than email. Form T is a form FINRA requires member firms submit to report last sale reports, typically after hours trades, of OTC transactions in equity securities. Relevant to the Series 62, Series 55, Series 24, and Series 7 exams.

Source: FINRA Trade Reporting Notice – 6/3/2011

Exam Alert: FASB requires additional accounting disclosures

The Financial Accounting Standards Board (FASB) has announced new standards regarding fair value measurements and disclosure requirements. These changes Continue reading

The Financial Accounting Standards Board (FASB) has announced new standards regarding fair value measurements and disclosure requirements. These changes will take effect December 15, 2011. The disclosure requirements include needing to disclose certain information on the valuation of Level 3 assets, nonfinancial assets, and items that are not measured at a fair value. Relevant to the FINRA Series 24, Series 7 and Series 62 exams.

Source: Accounting Standards Update No. 2011-04

Highlights: Fair Value Accounting: Five New Disclosure Requirements

Podcast: May 2011, FASB Board Member Russ Golden discusses FASB Accounting Standards Update No. 2011-04

Exam Alert: SEC approves FINRA financial responsibility and operational rules

The SEC has approved new consolidated FINRA rules governing financial responsibility and operational requirements of members. The rules take effect Continue reading

The SEC has approved new consolidated FINRA rules governing financial responsibility and operational requirements of members. The rules take effect August 1, 2011, and are based in part on existing NYSE and NASD rules, though there are new provisions as well. The new rules address guarantees, flow through benefits, carrying agreements, security counts, assignment of responsibility for general ledger accounts, and identification of suspense accounts. Relevant to the Series 7 and to the Series 24 exams. Details may be found here.

Source: FINRA Regulatory Notice 11-26

Exam Alert: FINRA pushes back implementation date for higher customer care standards

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