1. FINRA Regulatory Notice 17-32 FINRA Reminds Firms of Sales Practice Obligations for Volatility-Linked Exchange-Traded Products

    Volatility-linked exchange-traded products (ETPs) are designed to track Chicago Board Options Exchange Volatility Index (VIX) futures, rather than the VIX itself. For the reasons explained further below, many volatility-linked ETPs are highly likely to lose value over time. Accordingly, volatility-linked ETPs may be unsuitable for certain retail investors, particularly those who plan to use them as traditional buy-and-hold investments. This Notice reminds firms of their sales practice obligations in connection with volatility-linked ETPs as discussed more generally in Regulatory Notice 12-03, including, without limitation, that recommendations to customers must be based on a full understanding of the terms, features and risks of the product recommended, sales materials must be fair and accurate, and firms must have reasonable supervisory procedures in place to ensure that these obligations are met.

    10/16/2017

  2. FINRA Regulatory Notice 17-30 SEC Approves Consolidated FINRA Registration Rules, Restructured Representative-Level Qualification Examinations and Changes to Continuing Education Requirements

    The Securities and Exchange Commission (SEC) approved a proposed rule change to: (1) adopt consolidated FINRA registration rules; (2) restructure the representative-level qualification examinations by creating a general knowledge examination called the Securities Industry Essentials (SIE) and transforming the representative-level examinations into specialized knowledge examinations; and (3) amend the Continuing Education (CE) requirements. These changes become effective October 1, 2018.

    10/5/2017

  3. FINRA Regulatory Notice 17-31 FINRA Amends Section 13 of Schedule A to the FINRA By-Laws to Establish Charges for New Option to File Websites and Web Pages in Native Format

    FINRA has filed for immediate effectiveness amendments to Section 13 of Schedule A to the FINRA By-Laws governing the review charge for communications filed with or submitted to FINRA’s Advertising Regulation Department. The amendments do not increase the filing fees for the review of communications. The amendments establish charges for a new option to submit websites and web pages in their native format in anticipation of the impending upgrade to the Advertising Regulation Electronic Files (AREF) System. The amendments do not change the current filing requirements under FINRA Rules 2210 (Communications with the Public) or 2220 (Options Communications).

    10/5/2017

  4. FINRA Regulatory Notice 17-29 Definition of Non-Public Arbitrator

    FINRA’s proposed amendments to the definition of non-public arbitrator in the Customer and Industry Codes of Arbitration Procedure have been approved by the SEC. The amended definition provides that a non-public arbitrator is a person who is otherwise qualified to serve as an arbitrator, and is disqualified from service as a public arbitrator under the Codes. The amendments are effective on October 9, 2017.

    10/4/2017

  5. FINRA Regulatory Notice 17-28 FINRA Makes Available Frequently Asked Questions and Guidance and Extends Effective Date of Margin Requirements for Covered Agency Transactions

    In June 2016 the SEC approved FINRA’s rule change (referred to as the “rule change”) amending FINRA Rule 4210 to establish margin requirements for Covered Agency Transactions. To assist members in complying with the rule change, FINRA has made available a set of frequently asked questions and guidance. In addition, FINRA is extending, to June 25, 2018, the effective date of the requirements pursuant to the rule change that otherwise would have become effective on December 15, 2017.

    9/29/2017

  6. MSRB Regulatory Notice 2017-20 MSRB Amends Professional Fee for Municipal Advisors

    On September 29, 2017, the Municipal Securities Rulemaking Board (MSRB) filed a proposed rule change with the Securities and Exchange Commission (SEC) to modify the fee charged under MSRB Rule A-11, on assessments for municipal advisor professionals.1 The amendments to Rule A-11 increase the annual municipal advisor professional fee to $500 from $300 and is effective immediately, although the first payment at the new rate is not due until April 30, 2018. Amended Rule A-11(a) will require each municipal advisor firm that is registered with the SEC to pay to the MSRB a recurring annual fee of $500 for each person associated with the municipal advisor who is qualified as a municipal advisor representative in accordance with Rule G-3 and for whom the municipal advisor firm has on file with the SEC a Form MA-I as of January 31 of each year. A person is qualified in accordance with Rule G-3(d) when such person has taken and passed the Municipal Advisor Representative Qualification Examination (Series 50 exam).

    9/29/2017

  7. SR-NASDAQ-2017-101 Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Implementation Date for Certain Changes to the Rule 5700 Series and Rule 5810

    The Exchange proposes to extend the date on which certain changes concerning the continued listing requirements for exchange-traded products (“ETPs”) in the Nasdaq Rule 5700 Series, as well as a related amendment to Nasdaq Rule 5810 (Notification of Deficiency by the Listing Qualifications Department), are implemented. The Exchange proposes to delay the implementation date of these changes until January 1, 2018. Given the scope of the proposed rule changes, the Exchange believes that this will ensure that ETP issuers have adequate time to finish developing and put into operation the new processes and systems necessitated by them.

    9/29/2017

  8. Chicago Stock exchange Memorandum 17-08 Notice Regarding Order Types and Order Modifiers that Are Eligible for Entry into and Accepted by the CHX Matching System

    Pursuant to CHX Article 20, Rule 4(b), effective October 2, 2017, the Qualified Contingent Trade (QCT) order execution modifier for cross orders will be eligible for entry into or acceptance by the Exchange’s Matching System outside of the normal market hours of 8:30 a.m. to 3:00 p.m. Central Standard Time. Institutional Brokers that execute a QCT1 or a Pilot Qualified Contingent Trade (Pilot QCT), for the purposes of the Tick Size Pilot Program Pursuant to Regulation NMS, outside of normal market hours, may designate such transaction as a QCT in the Matching System. Institutional Brokers are reminded of their recordkeeping and supervisory obligations with respect to transactions designated to the Matching System as QCTs and Pilot QCTs, and that such obligations apply to such transactions at all times the Matching System is operational, including, outside of normal market hours.

    9/28/2017

  9. Electronic Only Orders

    Beginning on or around November 6, 2017, the CBOE will implement a change to accept a new order handling instruction, pending Regulatory approval. The new instruction will allow Trading Permit Holders (“TPHs”) to apply an Electronic Only instruction to orders. Electronic only orders may be traded or booked by the Trade Engine. Electronic only orders cannot be routed for manual handling. Electronic only orders that cannot be traded via the Trade Engine will be canceled or rejected. Electronic only orders that are canceled or rejected back to firms will contain the following reason codes.

    9/25/2017

  10. Guidance to Members Affected by Hurricane Harvey

    This Notice provides guidance to firms with a home office, branch office or other business location affected by Hurricane Harvey. FINRA is providing guidance on a number of regulatory and compliance issues, including emergency office relocations, continuing education requirements for registered personnel, registered personnel engaged in active military duty, regulatory filings and associated fees, regulatory inquiries and customer communications.

    8/30/2017

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