From the Regulatory Panel the discussion revolved around the following issues:
- Regulation BI (Best Interest) proposal which was proposed to the SEC in August of 2018 for Broker Dealer
- Digital Currency viewed as “penny Stocks wrapped in cytotechnology” according to one regulator. They pointed to the recent “Hempcoin” case
- Fintech—FINRA will be distributing a regulatory notice related to Fintech soon bases on findings from it working group
- Regulatory Fragmentation—Domestic and International regulators continue to lack a consistent regulatory framework. Panelist are hoping for more coordination and cooperation to gain some consistency, at a minimum, on principle regulation
Ask FINRA: A panel of Senior FINRA Official—responding to questions
- FINRA is asking member firms to self-report any suitability related issues pertaining to 529 Plans. The requirement is to agree to report by April 30th. If a firm provides a reasonable remediation plan to FINRA to make restitution to customers that were harm, FINRA will not assess any additional fines. More importation on the program is contained at the link below:
Again, remember 529 Plans fall under municipal rules.
FINRA will be the administrator CAT (“Consolidated Audit Trail”)
- FINRA has a plan to transition the administrating of all exchange reporting for CAT. Exchanges will transition reporting to FINRA in October of 2020 and customer implementation is expected to be effective in 2020. At that point in time, Order Audit Trail System (“OATS”) will be retired upon full implementation of CAT. See regulatory notice below:
- Outside Business Activities Discussion—FINRA recognizes industry hates the rule and will keep reviewing but not immediate change at this time.
- Discussions about FINRA 2019 Priority Letter. Many of the priorities were similar to 2018 but emphasis remains on senior investors and investor protection overall
- FINRA is stressing “Credit for Cooperation” with FINRA enforcement. More information member firms provided to FINRA under Rule 8210 requests is the more credit you can expect to receive from the regulators.
Volcker Rule 2.0—Proposed rule changes to Volcker rule adopted in 2010
Reviewed recent key proposals related to Proprietary Trading:
- Trading outside the US (“TOTUS”) Exemption
- Definition of Trading Account and elimination of 60 Day
- Market Making and elimination of RENTD if the bank establishes and enforces internal risk limits on underwriting and market making positions
- Expansion of Liquidity Management
- Trading Errors
- Hedging Exemptions
Follow us for more highlights from this year’s SIFMA conference. For further information on any of the aforementioned topics, please contact us.
Paul A. Murdock, president of MCG Consulting, is a seasoned financial services professional with proven experience leading compliance engagements for broker-dealers, banks, investments advisers, hedge funds, private funds and mutual fund companies.