Tag: Dodd-Frank Act

Exam Alert: SEC Delays Compliance Date of Municipal Adviser Registration Rules, Responds to FAQs

The SEC has announced that compliance with the final municipal adviser registration rules will not be required until July 1, 2014. The SEC has also released interpretive guidance for the municipal adviser registration rules, in the form of responses to frequently asked questions. Continue reading

The SEC has announced that compliance with the final municipal adviser registration rules will not be required until July 1, 2014. This date is when the first set of advisers will be required to register under the rule.

The SEC has also released interpretive guidance for the municipal adviser registration rules, in the form of responses to frequently asked questions. The FAQs cover a wide range of topics, including the advice standard, various exemptions and exclusions, issuance of municipal securities, remarketing agent services, and more. The FAQs can be found here.

For more information on the municipal adviser registration rules, see our two prior exam alerts on the topic, here and here.

 

Sources:

SEC Release 2014-8: SEC Announces New Date for Compliance with Final Municipal Advisor Registration Rules

SEC Release 2014-7: Interpretive Guidance on Municipal Advisor Registration Rules

 

This alert applies to the Series 7, Series 52, and Series 53.

Exam Alert: Municipal Advisor Registration Rules Take Effect

On January 13, 2014, the SEC will put into effect new rules to require the ongoing registration of municipal advisers. A municipal adviser is defined as a person that either:

– gives advice to a municipal entity or obligated person regarding municipal securities, or

– solicits a municipal entity or obligated person.

The SEC has released a guide (http://www.sec.gov/info/smallbus/secg/muni-advisor-reg-secg.htm) on who is and is not required to register… Continue reading

On January 13, 2014, the SEC will put into effect new rules to require the ongoing registration of municipal advisers. A municipal adviser is defined as a person that either:

  • gives advice to a municipal entity or obligated person regarding municipal securities, or
  • solicits a municipal entity or obligated person.

The SEC has released a guide on who is and is not required to register – certain firms and professionals are exempt while acting in their regular capacity. The guide also specifies the filing requirements for municipal adviser registration.

See also our prior alert on this topic for additional information.

This alert applies to the Series 7, Series 52, and Series 53.

FINRA Focuses Attention on BrokerCheck

Selecting a broker to invest hard-earned money can be a nerve-racking thought to many investors. With news headlines focused on the lingering results of the economic crisis and financial scandals that left many penniless, it has never been more important for investors to find a broker they can trust. Continue reading

Selecting a broker to invest hard-earned money can be a nerve-wracking process for many investors. With news headlines focused on the lingering results of the economic crisis and financial scandals that left many penniless, it has never been more important for investors to find a broker they can trust.

Luckily, there is a resource that might give them some peace of mind. In 1998, FINRA (the Financial Industry Regulatory Authority) established the website BrokerCheck as a tool for investors researching the record of a firm and its brokers. The website features professional background information on approximately 1.3 million current and former FINRA-registered brokers and 17,400 current and former FINRA-registered brokerage firms. BrokerCheck lists terminations, complaints, lawsuits and even personal bankruptcies, with the mindset that past behaviors are both telling and predictive of future behaviors.

The Dodd-Frank Act, passed in 2010 in response to the financial crisis, required regulators to make the website more user friendly and accessible. Regulators are concerned that although BrokerCheck is readily available for anyone to use, not enough people are aware of this tool. To encourage more investors to use the site, a year ago FINRA proposed a regulation that would require brokerage firms to include on their websites and social media feeds a link to FINRA’s BrokerCheck website. But many people were up in arms about this proposed rule change. After receiving dozens of comments, the filing was withdrawn in order to re-write and re-introduce it later this year with an inclusion that would require firms to describe BrokerCheck in a “prominent location”.

This renewed focus on the BrokerCheck website falls in line with FINRA’s actions to focus on prosecuting recidivist brokers, or those who have multiple complaints, disclosures and abuses on their record. A big step in curbing these behaviors that could harm the securities industry is to encourage well-informed investors.

 

Exam Alert: Federal Agencies Implement Volcker Rule

Effective April 1, 2014, five federal agencies will implement a provision of the Dodd-Frank Act known as the Volcker rule. This rule prohibits a bank from making short-term trades in financial instruments for its own account. The rule also limits the relationships a bank can have with hedge funds and private equity funds. Continue reading

Effective April 1, 2014, five federal agencies* will implement a provision of the Dodd-Frank Act known as the Volcker rule. This rule prohibits a bank from making short-term trades in financial instruments for its own account. The rule also limits the relationships a bank can have with hedge funds and private equity funds.

The rule provides exemptions for certain activities, including underwriting, market making, hedging risk, trading in certain government securities, trading in a fiduciary capacity, and riskless principal trading. Foreign banks are exempt if the trades meet certain requirements. Insurance companies are exempt when trading for their general or separate accounts.

The rule requires banks engaging in the activities covered by the rule to put in place a compliance program. The level of detail of the compliance program depends on the size of the bank, with larger banks needing more detailed compliance programs.

*The five agencies are the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Source: SEC Release 2013-258: Agencies Issue Final Rules Implementing the Volcker Rule

This alert applies to the Series 6, Series 7, Series 24, Series 55, Series 62, and Series 79.

Exam Alert: SEC Requires Municipal Advisers to Register

Effective January 13, 2014, the SEC will put into place permanent rules to require the ongoing registration of municipal advisers. A municipal adviser is defined as a person that either:

-gives advice to a municipal entity or obligated person regarding municipal securities, or

-solicits a municipal entity.

Municipal entities and their employees are not considered municipal advisers. Continue reading

Effective January 13, 2014, the SEC will put into place permanent rules to require the ongoing registration of municipal advisers. A municipal adviser is defined as a person that either:

– gives advice to a municipal entity or obligated person regarding municipal securities, or

– solicits a municipal entity.

Municipal entities and their employees are not considered municipal advisers.

An “obligated person” essentially refers to an entity that is obligated to repay some or all of the amount borrowed in a municipal securities offering. For example, a non-profit university or non-profit hospital could be an obligated person if they borrow from the proceeds a municipal securities offering and are then legally required to pay back what they borrowed.
Note that certain entities are exempt from the registration requirement if they provide advice while acting in their regular capacity. This exemption applies to underwriters, registered investment advisers, registered commodity trading advisors, attorneys, engineers, banks, accountants, and swap dealers. For more details, see the SEC release.

Source: SEC Press Release 2013-185: SEC Approves Registration Rules for Municipal Advisors
This alert applies to the Series 7 and Series 52.

Exam Alert: Private advisers must register with the SEC

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