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  1. CSX Information Memorandum 17-09 Amendments to CHX Rules Addressing Qualified Contingent Trades, Cross Orders and CHX Recordkeeping Requirements

    On September 22, 2017, the SEC approved Chicago Stock Exchange, Inc. Rule Filing SR-CHX-2017-12 regarding Qualified Contingent Trades (“QCTs”) and related information recording obligations by certain Participants which will become operative on January 9, 2018. The purpose of this Information Memorandum is to discuss the noteworthy changes set forth in the approved rule filing

    12/18/2017

  2. MSRB Regulatory Notice 2017-25 MSRB to Amend Rule G-34, on CUSIP Numbers, New Issue, and Market Information Requirements

    The MSRB received approval from SEC on December 14, 2017, to amend MSRB Rule G-34, on CUSIP numbers, new issue, and market information requirements (the “amendments”). The amendments will codify the MSRB’s longstanding interpretive view that brokers, dealers and municipal securities dealers (collectively, “dealers”) are “underwriters” when acting as placement agent in private placements of municipal securities, including direct purchases. In addition, the amendments will extend to non-dealer municipal advisors, the requirement that a municipal advisor obtain a CUSIP number when advising on a competitive transaction in municipal securities. Finally, the amendments will provide a principles-based exception for dealers (and municipal advisors in competitive sales) from the CUSIP number requirements when selling a new issue of municipal securities in certain circumstances where the dealer or municipal advisor reasonably believes (e.g., by obtaining a written representation) that the present intent of the purchasing entity is to hold the municipal securities to maturity or earlier redemption or mandatory tender. Dealers also will be able to rely on the principles-based exception with respect to the requirement to apply for depository eligibility for a new issue pursuant to Rule G-34. The amendments will become effective on June 14, 2018.

    12/15/2017

  3. FINRA Regulatory Notice 17-43 Guidance on Reporting Short Interest Positions Held in Master/Sub-Accounts or Parent/Child Accounts

    FINRA is issuing this Notice to reiterate that firms must report short positions in each individual firm or customer account on a gross basis under FINRA Rule 4560. Therefore, firms that maintain positions in master/sub-accounts or parent/child accounts must calculate and report short interest based on the short position in each sub- or child account. FINRA has observed that some firms erroneously report a net short interest position for each account grouping, i.e., by parent or master account, rather than reporting on a gross basis for each account, i.e., by child or sub-account.

    12/6/2017

  4. SR-NASDAQ-2017-121 Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend Rule 4759

    The purpose of the proposed rule change is to add additional detail about the purposes for which the Exchange uses securities information processor (“SIP”) data pursuant to Rule 4759, and to make other technical corrections to that rule. Rule 4759 lists the proprietary and network processor feeds that are utilized for the handling, routing, and execution of orders, as well as for the regulatory compliance processes related to those functions.

    12/5/2017

  5. FINRA Regulatory Notice 17-40 FINRA Provides Guidance to Firms Regarding AntiMoney Laundering Program Requirements Under FINRA Rule 3310 Following Adoption of FinCEN’s Final Rule to Enhance Customer Due Diligence Requirements for Financial Institutions

    FINRA is issuing this Notice to provide guidance regarding member firms’ obligations under FINRA Rule 3310 (Anti-Money Laundering Compliance Program) in light of the Financial Crimes Enforcement Network’s (FinCEN) adoption of a final rule on Customer Due Diligence Requirements for Financial Institutions (CDD Rule). FinCEN’s CDD Rule became effective July 11, 2016. Member firms must be in compliance with its provisions by May 11, 2018.

    11/21/2017

  6. MSRB Regulatory Notice 2017-22 MSRB Seeks Input on Compliance Support

    The MSRB is seeking comment on how to most effectively further its strategic goal of facilitating compliance and advancing understanding of current MSRB regulatory requirements for brokers, dealers and municipal securities dealers (collectively, “dealers”) and municipal advisors.1 To inform commenters’ responses, this notice details the MSRB’s existing approach to compliance support so that commenters can provide more tailored input and perspectives. This request for comment is intended to inform the development of compliance assistance, and the MSRB is not seeking comment as a precursor to initiating rulemaking.

    11/16/2017

  7. FINRA Regulatory Notice 17-39 SEC Approves the CAT Fee Dispute Resolution Process

    The SEC approved Rule 6898 to establish the procedures for resolving potential disputes related to CAT fees charged to industry members. This rule will be implemented on December 1, 2017; however, the CAT Fee rules currently are pending and not yet operative. FINRA will provide additional information in a Regulatory Notice promptly following the adoption of the CAT fees.

    11/15/2017

  8. FINRA Regulatory Notice 17-38 FINRA Requests Comment on a Proposal to Amend Rule 3110 (Supervision) to Provide Firms the Option to Conduct Remote Inspections of Offices and Locations That Meet Specified Criteria

    This Notice seeks comment on a proposal to amend Rule 3110 to add new Supplementary Material .15 to provide firms with the flexibility to conduct remote inspections of “qualifying offices” that meet specified criteria, in lieu of physical, on-site inspections of such offices as currently required under the rule.

    11/13/2017

  9. MSRB Regulatory Notice 2017-21 MSRB to Streamline Series 52 Exam Ahead of Release of FINRA Securities Industry Essentials Exam

    The MSRB is publishing this notice to announce that it plans to revise the Municipal Securities Representative Examination (Series 52) into a specialized knowledge exam in advance of the October 1, 2018 release of the FINRA's Securities Industry Essentials™ (SIE) examination. The MSRB worked collaboratively with FINRA during development of the SIE examination to streamline duplicative testing of general knowledge that has traditionally been covered across several representative-level examinations. The MSRB supports the goal to reduce testing redundancies for securities industry professionals and expand opportunities for prospective securities professionals. To that end, the MSRB anticipates filing a proposed rule change with the Securities and Exchange Commission in early 2018 to require the SIE as a prerequisite to registration as a Municipal Securities Representative, Municipal Securities Sales Limited Representative and Limited Representative-Investment Company and Variable Contracts Product Representative.

    11/8/2017

  10. FINRA Regulatory Notice 17-37 SEC Approves “Pay-to-Play” and Related Rules for Capital Acquisition Brokers (CABs)

    The SEC approved CAB Rule 203 (Engaging in Distribution and Solicitation Activities with Government Entities) and CAB Rule 458 (Books and Records Requirements for Government Distribution and Solicitation Activities). These rules apply established “pay-to-play” and related recordkeeping rules to the activities of member firms that have elected to be governed by the CAB Rules. The rules will allow CABs to engage in distribution or solicitation activities for compensation with government entities on behalf of registered investment advisers. The rules become effective on December 6, 2017.

    11/6/2017

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