1. FINRA Regulatory Notice 21-36 Anti-Money Laundering and Countering the Financing of Terrorism

    The Financial Crimes Enforcement Network (FinCEN) has issued the first government-wide priorities for anti-money laundering and countering the financing of terrorism policy, which was mandated by the Anti-Money Laundering Act of 2020 (AML Act). FinCEN also issued a statement to provide covered non-bank financial institutions (NBFIs), including broker-dealers, with guidance on how to approach the AML/CFT Priorities.

    10/8/2021

  2. MSRB Approval Notice 2021-13 SEC Approves Amendments to Rules G-10 and G-48 Clarifying Notification Requirements for Dealers

    On October 5, 2021, the Municipal Securities Rulemaking Board (MSRB) received approval from the U.S. Securities and Exchange Commission (SEC) for a rule change consisting of amendments to Rule G-10, on investor and municipal advisory client education and protection, clarifying and aligning the requirements for brokers, dealers and municipal securities dealers (collectively, “dealers”) to provide required notifications under the rule directly to those customers for whom a purchase or sale of a municipal security was effected in the past year and to each customer who holds a municipal securities position. The SEC also approved an accompanying amendment to Rule G-48, on transactions with sophisticated municipal market professionals (SMMPs), allowing dealers to conditionally excluded SMMPs from the requirements under Rule G-10(a). The rules become effective on October 12, 2021.

    10/6/2021

  3. FINRA Regulatory Notice 21-35 Order Routing Disclosures for OTC Equity Securities

    FINRA requests comment on a proposal to require members to publish quarterly order routing disclosure reports for held orders in OTC Equity Securities. The proposed new quarterly reports would be similar to those required for NMS stocks under the Securities and Exchange Commission’s (SEC) Rule 606(a) of Regulation NMS, with certain modifications reflecting the different structure of the OTC market. FINRA also requests input on possible steps to further facilitate investor access and understanding of current order routing disclosures for NMS securities.

    10/6/2021

  4. NASAA Model Rule - Notice of Request for Public Comment Regarding Unpaid Arbitration Awards Model Rules

    The Broker-Dealer Market and Regulatory Policy and Review Project Group, the Broker-Dealer Arbitration Project Group, and the Investment Adviser Regulatory Policy and Review Project Group (the “Project Groups”) of the North American Securities Administrators Association, Inc. (“NASAA”) are seeking public comment on proposed model rules (the “Model Rules”) to provide member jurisdictions with an additional tool to address unpaid Financial Industry Regulatory Authority (“FINRA”) arbitration awards by broker-dealers, agents, investment advisers, and investment adviser representatives. Ultimately, the Model Rules will serve as bases for enforcement actions related to unpaid awards and allow member jurisdictions to prevent the registration of firms and individuals, whether as broker-dealers, agents, investment advisers, or investment adviser representatives, if the firm or individual has outstanding FINRA arbitration awards or other regulatory obligations.

    10/5/2021

  5. MSRB Request for Comment 2021-12 - Draft Compliance Resources for Dealers and Municipal Advisors Concerning New Issue Pricing

    The Municipal Securities Rulemaking Board (MSRB) is requesting comment on draft companion compliance resources for brokers, dealers, and municipal securities dealers (collectively, “dealers”) and municipal advisors (together with dealers, “regulated entities”). The goal of the compliance resources is to enhance understanding regarding the existing regulatory standards applicable to regulated entities’ supervision of conduct when pricing a new issuance of municipal securities. The purpose of this notice is to seek information and insight from commenters to further inform the MSRB’s development of the attached drafts prior to any final publication.

    10/5/2021

  6. FINRA Regulatory Notice 21-34 FINRA Adopts Rules to Address Firms with a Significant History of Misconduct

    FINRA has adopted new rules to address firms with a significant history of misconduct. New Rule 4111 (Restricted Firm Obligations) requires member firms that are identified as “Restricted Firms” to deposit cash or qualified securities in a segregated, restricted account; adhere to specified conditions or restrictions; or comply with a combination of such obligations. New Rule 9561 (Procedures for Regulating Activities Under Rule 4111) and amendments to Rule 9559 (Hearing Procedures for Expedited Proceedings Under the Rule 9550 Series) establish a new expedited proceeding to implement Rule 4111.

    9/28/2021

  7. Order Approving a Proposed Rule Change to Amend FINRA Rules 1210 (Registration Requirements) and 1240 (Continuing Education Requirements)

    On June 3, 2021, FINRA filed with the SEC a proposed rule change to amend FINRA Rules 1240 (Continuing Education Requirements) and 1210 (Registration Requirements) to, among other things, require that the Regulatory Element of FINRA’s continuing education program for registered persons of FINRA members (“CE Program”) be tailored to each registration category and completed annually rather than every three years and provide a way for individuals to maintain their qualifications following the termination of registration through continuing education.

    9/21/2021

  8. FINRA Regulatory Notice 21-33 FINRA Adopts Amendments to Rule 6432 Regarding Compliance with the Information Requirements of SEC Rule 15c2-11

    FINRA adopted amendments to Rule 6432 (Compliance with the Information Requirements of SEA Rule 15c2-11) in light of the Securities and Exchange Commission’s amendments to SEC Rule 15c2-11 (SEC Rule 15c2-11). As amended, Rule 6432 will require a qualified inter-dealer quotation system (Qualified IDQS) to submit a modified Form 211 filing to FINRA in connection with each initial information review, and a daily security file to FINRA containing summary information for all securities quoted on its system on each day that it makes a publicly available determination permitted under SEC Rule 15c2-11, among other amendments. The amendments to Rule 6432 will take effect on September 28, 2021—in line with the compliance date for the amendments to SEC Rule 15c2-11.

    9/17/2021

  9. FINRA Regulatory Notice 21-32 FINRA Requests Comment on Its Policy Relating to the Assignment of OTC Symbols to Unlisted Equity Securities

    FINRA requests comment on a proposed change to its current policy relating to the assignment of OTC symbols to unlisted equity securities. Specifically, FINRA is considering whether it should begin assigning OTC symbols to unlisted equity securities that do not have a valid CUSIP identifier, in the limited circumstance where a member firm demonstrates its best efforts to obtain a CUSIP identifier and provides documentation to identify the security.

    9/14/2021

  10. FINRA Regulatory Notice 21-31 FINRA Establishes New Supplemental Liquidity Schedule (SLS)

    FINRA has established a new Supplemental Liquidity Schedule (SLS). The new SLS, which members subject to the requirement will need to file as a supplement to the FOCUS Report, is designed to improve FINRA’s ability to monitor for events that signal an adverse change in the liquidity risk of the members with the largest customer and counterparty exposures. FINRA is issuing this Notice to provide further information on the new requirement, which will become effective on March 1, 2022. For members subject to the requirement, the first SLS must be completed as of the end of March 2022 and will be due by May 4, 2022.

    9/3/2021

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