SEC Release No. 34-93784 Prohibition Against Fraud, Manipulation, or Deception in Connection with Security-Based Swaps; Prohibition against Undue Influence over Chief Compliance Officers; Position Reporting of Large Security-Based Swap Positions
The Securities and Exchange Commission is reproposing for comment a rule under the Securities Exchange Act of 1934 which would be a new rule designed to prevent fraud, manipulation, and deception in connection with effecting transactions in, or inducing or attempting to induce the purchase or sale of, any security-based swap. The rule is designed specifically to take into account the unique features of a security-based swap and would explicitly reach misconduct in connection with the ongoing payments and deliveries that typically occur throughout the life of a security-based swap.
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.
This Special Notice seeks comments that will help inform and guide the investor education initiatives FINRA and the FINRA Investor Education Foundation (the FINRA Foundation) undertake. In particular, we seek input from firms, investors, investor advocates, academics and other stakeholders who are knowledgeable about investor behavior regarding the most effective methods for educating newer investors. This Notice is not focused on existing regulatory requirements applicable to member firms and their interactions with investors.
FINRA Regulatory Notice 21-17 FINRA Seeks Comment on Supporting Diversity and Inclusion in the Broker-Dealer Industry
FINRA is committed to supporting efforts by broker-dealer industry participants to foster diversity, inclusion and equal opportunity. FINRA seeks comment on any aspects of our rules, operations and administrative processes that may create unintended barriers to greater diversity and inclusion in the broker-dealer industry or that might have unintended disparate impacts on those within the industry.
FINRA adopts rules to address brokers with a significant history of misconduct. Effective Dates: Amendments to the FINRA Rule 9200 Series, FINRA Rule 9300 Series, and FINRA Rule 9556: April 15, 2021; Amendments to FINRA Rule 8312: May 1, 2021; Amendments to the FINRA Rule 9520 Series and Funding Portal Rule 900: June 1, 2021; Amendments to the FINRA Rule 1000 Series and the Capital Acquisition Broker Rule 100 Series: September 1, 2021
Rule 13.15(g)(6) provides for the imposition of fines for violations of the Exchange's trading conduct and decorum policies under Rule 5.80. The schedules below identify certain conduct deemed to violate those policies and list the applicable fines that may be imposed by the Exchange under Rule 13.15(g)(6). Please be advised that Rule 13.15(g)(6) enables the Exchange, if warranted under the circumstances, to impose for a first offense the fine authorized for a second, third or subsequent offense; to impose for a second offense the fine authorized for a third or subsequent offense; and to impose for a third offense the fine authorized for a subsequent offense.
The Securities and Exchange Commission is adopting amendments to update certain auditor independence requirements. These amendments are intended to more effectively focus the independence analysis on those relationships or services that are more likely to pose threats to an auditor’s objectivity and impartiality.
that involves fraudulent emails purporting to be from FINRA asking member firms to complete a survey (see sample below). The email was sent from the domain “@regulation-finra.org” and was preceded by “info” followed by a number, e.g., firstname.lastname@example.org. FINRA recommends that anyone who clicked on any link or image in the email immediately notify the appropriate individuals in their firm of the incident. The domain of “regulation-finra.org” is not connected to FINRA and firms should delete all emails originating from this domain name. FINRA has requested that the Internet domain registrar suspend services for “regulation-finra.org”. FINRA reminds firms to verify the legitimacy of any suspicious email prior to responding to it, opening any attachments or clicking on any embedded links.
FINRA Regulatory Notice 20-34 Proposed Amendments to FINRA Rule 2165 and Retrospective Rule Review Report
The protection of senior investors is a top priority for FINRA. In August 2019, FINRA launched a retrospective review to assess the effectiveness and efficiency of its rules and administrative processes that help protect senior investors from financial exploitation. The review indicated that FINRA’s steps to protect seniors have provided helpful and effective tools in the fight against financial exploitation, but it also suggested some additional tools, guidance and rule changes. Based on feedback received during the review, FINRA is proposing amendments to Rule 2165 (Financial Exploitation of Specified Adults) to extend the hold period and to allow temporary holds on securities transactions to further address suspected financial exploitation of senior investors. This Notice seeks comment on the proposed amendments to Rule 2165. This Notice also summarizes the retrospective rule review process, including the predominant themes that emerged from stakeholder feedback and resulting actions, and provides guidance to aid member firms and senior investors.
The SEC is adopting several amendments to the Commission’s rules implementing its congressionally mandated whistleblower program. Section 21F of the Securities Exchange Act of 1934 (“Exchange Act”) provides, among other things, that the Commission shall pay—under regulations prescribed by the Commission and subject to certain limitations—to eligible whistleblowers who voluntarily provide the Commission with original information about a violation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action, or a related action, an aggregate amount, determined in the Commission’s discretion, that is equal to not less than 10 percent, and not more than 30 percent, of monetary sanctions that have been collected in the covered or related actions. On May 25, 2011, the Commission adopted a set of rules to implement the whistleblower program. After ten years of experience administering the program, the Commission is adopting various amendments that are intended to provide greater transparency, efficiency and clarity to whistleblowers, to ensure whistleblowers are properly incentivized, and to continue to properly award whistleblowers to the maximum extent appropriate and with maximum efficiency. The Commission is also making several technical amendments, and adopting interpretive guidance concerning the term “independent analysis.”
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