Announcements and analysis of key fintech, regulatory and compliance issues as they unfold.
Regulatory Update: SEC Proposes Significant Amendments to Investment Adviser Advertising Rule
The advertising rule for Investment Advisors, Rule 206(4)-1, has not been amended significantly since it was first adopted in 1961. The changes proposed by the SEC are motivated by the SEC’s desire to create a more “principles-based” approach to advertising regulation. Notice from the SEC follows:
SEC Proposes to Modernize the Advertising and Cash Solicitation Rules for Investment Advisers
FOR IMMEDIATE RELEASE
2019-230
Washington D.C., Nov. 4, 2019 —
The Securities and Exchange Commission today announced that it has voted to propose amendments to modernize the rules under the Investment Advisers Act addressing investment adviser advertisements and payments to solicitors. The proposed amendments are intended to update these rules to reflect changes in technology, the expectations of investors seeking advisory services, and the evolution of industry practices.
“The advertising and solicitation rules provide important protections when advisers seek to attract clients and investors, yet neither rule has changed significantly since its adoption several decades ago,” said SEC Chairman Jay Clayton. “The reforms we have proposed today are designed to address market developments and to improve the quality of information available to investors, enabling them to make more informed choices.”
The proposed amendments to the advertising rule would replace the current rule’s broadly drawn limitations with principles-based provisions. The proposed approach would also permit the use of testimonials, endorsements, and third-party ratings, subject to certain conditions, and would include tailored requirements for the presentation of performance results based on an advertisement’s intended audience.
The proposed amendments to the solicitation rule would expand the current rule to cover solicitation arrangements involving all forms of compensation, rather than only cash, subject to a new de minimis threshold. They also would update other aspects of the rule, such as who is disqualified from acting as a solicitor under the rule.
The public comment period will remain open for 60 days following publication of the proposal in the Federal Register.
* * *
FACT SHEET
Investment Adviser Advertisements; Compensation for Solicitations
Nov. 4, 2019
Highlights
The Commission today voted to propose amendments to the rules that prohibit certain investment adviser advertisements and payments to solicitors, respectively, under the Investment Advisers Act of 1940 (the “Act”). Neither rule has been amended significantly since its adoption in 1961 and 1979, respectively. Since that time, the Commission and our staff have continued to learn about adviser marketing and solicitation practices, as those practices have evolved significantly with advancements in technology and the changes within the asset management industry and its investor base. The proposed amendments to Rule 206(4)-1 and Rule 206(4)-3 are designed to respond to these changes.
The Commission has also voted to propose amendments to Form ADV, the investment adviser registration form, and Rule 204-2, the books and records rule, which would reflect the changes proposed to the advertising and solicitation rules.
Proposed Amendments to Advertising Rule
The proposed amendments to Rule 206(4)-1 would replace the current rule’s broadly drawn limitations with more principles-based provisions, as described below.
Definition of Advertisement. The proposal would update the definition of “advertisement” so that it is flexible enough to remain relevant and effective in the face of advances in technology and evolving industry practices.
The definition would include any communication, disseminated by any means, by or on behalf of an investment adviser, that offers or promotes investment advisory services or that seeks to obtain or retain advisory clients or investors in any pooled investment vehicle advised by the adviser.
The Commission proposed exclusions from this definition for: (1) live oral communications that are not broadcast, (2) responses to certain unsolicited requests for specified information, (3) advertisements, other sales material, or sales literature that is about a registered investment company or a business development company and is within the scope of other Commission rules; and (4) information required to be contained in a statutory or regulatory notice, filing, or other communication.
General Prohibitions. The proposed rule would prohibit the following advertising practices:
making an untrue statement of a material fact, or omission of a material fact necessary to make the statement made, in light of the circumstances under which it was made, not misleading;
making a material claim or statement that is unsubstantiated;
making an untrue or misleading implication about, or being reasonably likely to cause an untrue or misleading inference to be drawn concerning, a material fact relating to the investment adviser;
discussing or implying any potential benefits without clear and prominent discussion of associated material risks or other limitations;
referring to specific investment advice provided by the adviser that is not presented in a fair and balanced manner;
including or excluding performance results, or presenting performance time periods, in a manner that is not fair and balanced; and
being otherwise materially misleading.
Testimonials and Endorsements. The proposal would permit testimonials and endorsements, subject to specified disclosures, including whether the person giving the testimonial or endorsement is a client and whether compensation has been provided by or on behalf of the adviser.
Third-Party Ratings. The proposed rule would permit third-party ratings, subject to specified disclosures and certain criteria pertaining to the preparation of the rating.
Performance Information Generally. The proposal would prohibit including in any advertisement:
Gross performance results unless it provides (or offers to provide promptly) a schedule of fees and expenses deducted to calculate net performance;
Any statement that the calculation or presentation of performance results has been approved or reviewed by the Commission;
Performance results from fewer than all portfolios with substantially similar investment policies, objectives, and strategies as those being offered or promoted in the advertisement, with limited exceptions;
Performance results of a subset of investments extracted from a portfolio, unless it provides or offers to provide promptly the performance results of all investments in the portfolio; and
Hypothetical performance, unless the adviser adopts and implements policies and procedures reasonably designed to ensure that the performance is relevant to the financial situation and investment objectives of the recipient and the adviser provides certain specified information underlying the hypothetical performance.
Performance Information in a Retail Advertisement. The proposed rule would provide additional protections for an advertisement targeted to a retail audience: (1)requiring the presentation of net performance alongside any presentation of gross performance, and (2)requiring generally the presentation of the performance results of any portfolio or certain composite aggregations across 1-, 5-, and 10-year periods.
Internal Pre-Use Review and Approval. In addition, the proposed amendments would require advertisements to be reviewed and approved in writing by a designated employee before dissemination, except for advertisements that are: (1) communications disseminated only to a single person or household or to a single investor in a pooled investment vehicle; or (2) live oral communications broadcast on radio, television, the internet, or any other similar medium.
Proposed Amendments to Solicitation Rule
The proposed amendments to Rule 206(4)-3 would largely make refinements in scope, written agreement content, and disclosure requirements, as described below.
Scope.
All Forms of Compensation. The proposed rule would apply regardless of whether an adviser pays cash or non-cash compensation to a solicitor. Non-cash compensation would include directed brokerage, awards or other prizes, and free or discounted services.
Private Fund Solicitors. The proposed rule would apply to the solicitation of current and prospective investors in private funds, rather than only to the solicitation of current and prospective clients of the adviser.
Exempt Arrangements. The proposed rule would substantially retain the current rule’s partial exemptions for (1) solicitors that refer investors for impersonal investment advice, and (2) solicitors that are employees or otherwise affiliated with the adviser. However, these arrangements would no longer be subject to the current rule’s written agreement requirement. The proposal would also add two new full exemptions for: (1) de minimis compensation to solicitors, and (2) advisers that participate in certain nonprofit programs.
Disqualified Solicitors. The proposed rule contains an expanded list of disciplinary events for which persons would be disqualified from acting as a solicitor, with a limited exception.
Written Agreement. Under the proposed rule, an adviser that compensates a solicitor for solicitation activities would be required to enter into written agreement with the solicitor, unless an exemption applies. The proposed rule would require that the written agreement include: (1) a description of the solicitation activities and compensation, (2) a requirement that the solicitor perform its solicitation activities in accordance with certain provisions of the Advisers Act, and (3) a requirement that solicitor disclosure be delivered to investors. The proposed rule would eliminate the current rule’s requirements that the solicitor agree to deliver the adviser’s Form ADV brochure and perform its solicitation activities consistent with the instructions of the adviser.
Disclosure Requirements. The solicitor disclosure required under the proposed rule would continue to highlight for investors the solicitor’s financial interest in the client’s choice of an investment adviser. Our proposal would modify the current solicitor disclosure to include additional information about a solicitor’s conflict of interest. Our proposal would eliminate the current rule’s requirement that the adviser obtain from each investor acknowledgments of receipt of the disclosures.
Oversight of Solicitors. The proposed rule would require that the adviser have a reasonable basis for believing that the solicitor has complied with the rule’s written agreement, including complying with the solicitor disclosure requirement. This requirement would be largely the same as the current rule.
Proposed Amendments to the Books and Records Rule and to Form ADV
The proposed amendments to Rule 204-2 relate to the proposed amendments to the advertising and solicitation rules.
Finally, today’s proposal would amend Form ADV to provide additional information regarding advisers’ advertising practices to help facilitate the Commission’s inspection and enforcement capabilities.
Review of Relevant Staff Guidance
Staff in the Division of Investment Management have issued a number of no-action letters and other guidance addressing the application of the current advertising and solicitation rules. The Commission’s release accompanying the proposed amendments includes a list of the relevant letters and guidance. The staff is reviewing these letters to determine whether any should be withdrawn in connection with any adoption of the proposed amendments.
What’s Next?
The proposed amendments will be published on the Commission’s website and in the Federal Register. The public comment period will remain open for 60 days after publication in the Federal Register.
The Commission also approved for use two short-form tear sheets (“feedback flyers”) to gather information. Investors are encouraged to submit additional feedback about their experiences with adviser marketing on the investor feedback flyer. Smaller advisers are encouraged to submit additional feedback about how the proposed rules would affect them on the adviser feedback flyer The feedback flyers are available on the Commission’s website.
Regulatory Update: Regulation Best Interest (Reg BI) Compliance Resource Center
FINRA and The Securities and Exchange Commission (SEC) have released a number of resources for broker-dealers and investment advisers to assist them in complying with the recently adopted Regulation Best Interest (Reg BI) and Form CRS. Here are some helpful links to the various resources issued to date.
Regulatory Update: FINRA Publishes 2019 Report on Examination Findings and Observations
FINRA today published its 2019 Report on FINRA Examination Findings and Observations. The report reflects key findings and observations identified in recent examinations, and contains effective practices that could help firms improve their compliance and risk management programs. It summarizes findings and observations across a range of topics, including:
Sales Practice and Supervision
Firm Operations
Market Integrity
Financial Management
Learn more here: https://www.finra.org/media-center/newsreleases/2019/finra-publishes-2019-report-examination-findings-and-observations
Conference: Join Halyard at the NSCP’s 2019 Annual National Conference
Join Halyard at the National Society of Compliance Professional’s (NSCP) premier event in Baltimore, MD, October 21-23 — From discussing best practices for implementing regulatory changes to exploring the benefits of diversity and inclusion, attendees will receive great insight and practical tools to take back to their firms. Whether hearing from expert panels, engaging in hands-on learning in labs, or sharing with other compliance professionals in forums and talk groups, we’re confident you’ll leave the National Conference more prepared for the future.
For more information, visit the NSCP’s Conference Page and Speaker’s Page here.
Regulatory Update: MSRB Rule G-17 and Response to Comments on SR-MSRB-2019-10
In response to suggestions from commenters, the Municipal Securities Rulemaking Board (MSRB) filed with the U.S. Securities and Exchange Commission (SEC) amendments to its proposal to revise 2012 interpretive guidance under MSRB Rule G-17, on conduct of municipal securities and municipal advisory activities. Among other revisions, the amendment would clarify when underwriters in a syndicate must provide disclosures to an issuer regarding the specific characteristics of a recommended transaction and exclude dealers serving as a primary distributor in a continuous offering of municipal fund securities from the disclosure requirements of the notice.
Read the MSRB’s response to comments here.
View the amendment here.
Resources: FINRA Releases Reg BI and Form CRS Firm Checklist
“FINRA is providing this checklist to help members assess their obligations under the SEC’s Regulation Best Interest (Reg BI) and Form CRS Relationship Summary (Form CRS). This checklist explains key differences between FINRA rules and Reg BI and Form CRS. The checklist is not a substitute for any rule. Only the rule can provide definitive information regarding its requirements. Interpretive questions should be directed to the SEC, at IABDQuestions@sec.gov. You should carefully review the SEC’s new rules and interpretations, related Federal Register notices and the SEC’s Small Entity Compliance Guides, which provide important information on the new obligations.” – FINRA
Access the Checklist here: https://www.finra.org/sites/default/files/2019-10/reg-bi-checklist.pdf
Regulatory Update: FINRA NTM 19-31, Disclosure Innovations in Advertising and Other Communications with the Public
FINRA issued this Notice in an effort to responds to questions that FINRA has received regarding how they can comply with FINRA rules when communicating with customers—particularly when using websites, email and other electronic media—while ensuring fair and balanced presentations. These questions include:
Q1. Technology and advances in communication have provided members with new ways of communicating with investors. How does FINRA view innovative design techniques in member communications?
Q2. Many disclosures in marketing materials have become quite extensive. Are all of these disclosures required by FINRA?
Q3. Is it necessary to disclose risks, costs or other drawbacks in a communication that are unrelated to its content?
Q4. If disclosures are integrated into the body of a marketing message or other communication, must they be as extensive as disclosures presented in a separate footnote or disclaimer?
Q5. Members communicate with the public in a number of ways in addition to marketing messages. How does FINRA consider disclosures for non-promotional communications like educational materials or reference resources?
Read the NTM here: https://www.finra.org/rules-guidance/notices/19-31
Regulatory Update: MSRB Rule G-40 – Advertising Rules for Municipal Advisors Effective
The MSRB Rule G-40, advertising by municipal advisors (the “advertising rules”) is effective today, August 23, 2019. Note that the MSRB also amended the advertising rules regarding the supervisory pre-approval requirements to interactive marketing content and published FAQs on social media. These rule aspects and guidance will also be incorporated into updated policies and procedures. Read the Rule. – http://www.msrb.org/Rules-and-Interpretations/MSRB-Rules/General/Rule-G-40-8-23-2019.aspx Read the notice. – https://msrb.org/~/media/Files/Regulatory-Notices/Announcements/2019-07.ashx?la=en Read the FAQs. – https://msrb.org/~/media/Files/Resources/FAQs-on-Use-of-Social-Media-under-MSRB-Advertising-Rules.ashx?la=en Read the rule filing. – https://msrb.org/~/media/Files/SEC-Filings/2019/MSRB-2019-05.ashx
Regulatory Update: FINRA Notice 19-26 – Regulation Best Interest Resources
The Securities and Exchange Commission’s (SEC’s) adoption of a best interest standard of conduct for broker-dealers and a relationship summary (Form CRS) delivery obligation, and provides an SEC email address where members may submit questions about the new requirements.
FINRA Assistance to Firms
FINRA has created a webpage for Reg BI where members can obtain information about the new rules. FINRA will produce written and online content to assist firms, as appropriate. Moreover, FINRA plans to hold in-person meetings and workshops to assist firms with their implementation efforts. FINRA will announce these initiatives through various communication channels, including website announcements and emails to firms. http://www.finra.org/industry/regulation-best-interest
SEC Resources
Regulatory Update: FINRA Issues Private Placement Guidance
FINRA issued Guidance that covers a range of private placement topics, from the basic question of “What is a private offering?” to more technical discussions on broker-dealer compliance with FINRA’s private placement rules under FINRA Rule 5122 and Rule 5123. This FAQ covers a number of topics, including whether a placement agent can file on behalf of other placement agents, the types of offering materials that must be filed and certain supervisory review requirements.
FINRA now has the following private placement resource materials:
Guidance
Firm Guidance – Private Placement Filings
This reference guide covers a range of private placement topics, from the basic question of “What is a private offering?” to more technical discussions on broker-dealer compliance with FINRA’s private placement rules.
July 16, 2019
Rule Interpretation
Interpretive Letter to Brian Sweeney, Trustmont Financial Group, Inc.
Request for Interpretive Guidance on FINRA Rule 2111 (Suitability) in Relation to EB-5 Program Securities Transactions
August 26, 2013
FAQ
Private Placement Frequently Asked Questions (FAQ)
Frequently asked questions about private placements.
Regulatory Update: Regulation Best Interest (“Reg BI”) – effective and compliance dates announced
Regulatory Update: Regulation Best Interest (“Reg BI”) – effective and compliance dates announced
The SEC has published Regulation Best Interest (“Reg BI”) in the Federal Register. Reg BI and Form CRS will become effective on September 10, 2019, with full compliance required by June 30, 2020.
Reg BI establishes an express best interest obligation for broker-dealers (“BDs”). The rule is estimated to become effective in approximately one year. The rule becomes effective 60 days after of being published in the Federal Registered, subject to a transition period until June, 2020.
The rule sets forth a number of obligations for broker-dealers, including:
The Disclosure Obligation
The Care Obligation
The Conflict of Interest Obligation
The Compliance Obligation
Background: Regulation BI was approved by the SEC in a 3 to 1 vote on June 5, 2019. The regulation was first proposed on April 18, 2018, and the SEC collected comments and held hearings on the proposal for the following five months. In a press release issued by the SEC, the Commission said, “Regulation Best Interest will enhance the broker-dealer standard of conduct beyond existing suitability obligations and make it clear that a broker-dealer may not put its financial interests ahead of the interests of a retail customer when making recommendations.”
The SEC has published Regulation Best Interest (“Reg BI”) in the Federal Register. Reg BI and Form CRS will become effective on September 10, 2019, with full compliance required by June 30, 2020.
Reg BI establishes an express best interest obligation for broker-dealers (“BDs”). The rule is estimated to become effective in approximately one year. The rule becomes effective 60 days after of being published in the Federal Registered, subject to a transition period until June, 2020.
The rule sets forth a number of obligations for broker-dealers, including:
The Disclosure Obligation
The Care Obligation
The Conflict of Interest Obligation
The Compliance Obligation
Background: Regulation BI was approved by the SEC in a 3 to 1 vote on June 5, 2019. The regulation was first proposed on April 18, 2018, and the SEC collected comments and held hearings on the proposal for the following five months. In a press release issued by the SEC, the Commission said, “Regulation Best Interest will enhance the broker-dealer standard of conduct beyond existing suitability obligations and make it clear that a broker-dealer may not put its financial interests ahead of the interests of a retail customer when making recommendations.”
Regulatory Update: Regulation BI
The SEC has adopted Regulation Best Interest (“Reg BI”) that establishes an express best interest obligation for broker-dealers (“BDs”). The rule is estimated to become effective in approximately one year. The rule becomes effective 60 days after of being published in the Federal Registered, subject to a transition period until June, 2020.
The rule sets forth a number of obligations for broker-dealers, including:
The Disclosure Obligation
The Care Obligation
The Conflict of Interest Obligation
The Compliance Obligation
Background: Regulation BI was approved by the SEC in a 3 to 1 vote on June 5, 2019. The regulation was first proposed on April 18, 2018, and the SEC collected comments and held hearings on the proposal for the following five months. In a press release issued by the SEC, the Commission said, “Regulation Best Interest will enhance the broker-dealer standard of conduct beyond existing suitability obligations and make it clear that a broker-dealer may not put its financial interests ahead of the interests of a retail customer when making recommendations.”
Speaking Engagement: NSCP National Conference – Best Practices for Broker-Dealers and Municipal Advisors
Join Brandon Klerk, founder of Halyard Compliance, at the NSCP National Conference in October for an engaging discussion and overview of the SEC, FINRA and MSRB regulatory notices. Come and hear how firms are finding solutions and responding creatively to stay compliant and evolve compliance and risk programs.
Learning Objectives:
• Hear an overview of recent SEC, FINRA and MSRB regulatory notices and guidance
• Share how other firms are implementing regulatory notice requirements and guidance to stay current; including trusted contact rules.
• Learn about pending rule-making and further guidance released to help comply
• Receive pointers for compliance manuals and written supervisory procedures enhancements
https://national.nscpconferences.org/
Regulatory Update: Funding Portal Enforcement Actions (Regulation CF Regulatory Enforcement)
Since funding portal rules and regulations are still relatively new, there have not yet been many examples of FINRA or SEC enforcement actions related to funding portal activities. To keep you informed, DreamFunded Marketplace LLC, was sanctioned by FINRA and its co-founder and CEO were banned from association with any FINRA funding portal member. The Compliant (linked here) cites (10) ten potential regulatory violations and the recently released Hearing Panel Decision (linked here) provides valuable insights into FINRA’s interpretations of the applicable rules and regulations in light of the facts and circumstances of this particular matter.
The topics that are discussed in this enforcement announcement include communication materials related to tombstone, video clips, issuer forecasts, offering pages and more. The discussion also addresses topics ranging from failure to respond to FINRA requests to failure to supervise investments and offerings. The following is a listing of the alleged violations that are also discussed in the Hearing Panel Decision.
Failing to Provide Documents and Information – (FINRA Funding Portal Rules 800(a) and 200(a) and FINRA Rule 8210)
False or Misleading Issuer Communications – (FINRA Funding Portal Rules 200(c)(3) and 200(a) and Regulation Crowdfunding Rule 301(c)(2))
False or Misleading Funding Portal Communications – (FINRA Funding Portal Rules 200(b), 200(c)(2), and 200(a)
No Reasonable Basis for Believing Issuer Compliance (Regulation Crowdfunding Section 301(a) and FINRA Funding Portal Rule 200(a))
Failure to Perform Meaningful Background Checks – (Regulation Crowdfunding Rule 301(c)(1) and FINRA Funding Portal Rule 200(a))
Failure to Provide Investors With Notice of Material Changes – (Regulation Crowdfunding Rule 304(c)(1) and FINRA Funding Portal Rule 200(a))
Failure to Provide Investors With Notice of Change of Offering Deadlines – (Regulation Crowdfunding Rule 304(b)(2) and FINRA Funding Portal Rule 200(a))
Failure to Provide Investors With Notice of Required Information – (Regulation Crowdfunding Rule 303(d) and FINRA Funding Portal Rule 200(a))
Failure to Provide Investors With Notice of Completion of Transactions – (Regulation Crowdfunding Rule 303(f) and FINRA Funding Portal Rule 200(a))
Supervision (FINRA Funding Portal Rules 300(a) and 200(a) and Regulation Crowdfunding Rule 403(a))
Conference: Join Halyard at FINRA’s 2019 Annual National Conference
Join Halyard at FINRA’s premier event in Washington, D.C. — the Annual Conference provides the opportunity for practitioners, peers and regulators to exchange ideas on today’s most timely compliance and regulatory topics. The conference offers industry professionals a variety of sessions related to current trends in technology, cybersecurity, risk management and much more.
For more information, visit FINRA’s conference page.
Regulatory Update: FinCEN Affirms Its Regulatory Framework for Virtual Currencies and a New Warning of Threats Posed by Virtual Currency Misuse
FinCEN issued the following two notices that reaffirms its longstanding position on digital currencies:
FIN-2019-G001 – Guidance Notice – Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies. “The Financial Crimes Enforcement Network (FinCEN) is issuing this interpretive guidance to remind persons subject to the Bank Secrecy Act (BSA) how FinCEN regulations relating to money services businesses (MSBs) apply to certain business models.”
FIN-2019-A003 -Advisory Notice – Advisory on Illicit Activity Involving Convertible Virtual Currency “FinCEN is issuing this advisory to assist financial institutions in identifying and reporting suspicious activity concerning how criminals and other bad actors exploit convertible virtual currencies (CVCs) for money laundering, sanctions evasion, and other illicit financing purposes, particularly involving darknet marketplaces, peer-topeer (P2P) exchangers, foreign-located Money Service Businesses (MSBs), and CVC kiosks. Virtual currencies, particularly CVCs, are increasingly used as alternatives to traditional payment and money transmission systems. As with other payment and money transmission methods, financial institutions should carefully assess and mitigate any potential money laundering, terrorist financing, and other illicit financing risks associated with CVCs. This advisory highlights prominent typologies and red flags associated with such activity and identifies information that would be most valuable to law enforcement, regulators, and other national security agencies in the filing of suspicious activity reports (SARs).”
Regulatory Update: FINRA NTM 19-18 Provides Guidance Regarding Suspicious Activity Monitoring and Reporting Obligations
FINRA is issuing this Notice (NTM 19-18) to provide guidance to member firms regarding suspicious activity monitoring and reporting obligations under FINRA Rule 3310 (Anti-Money Laundering Compliance Program).
Potential Red Flags in Customer Due Diligence and Interactions With Customers
Potential Red Flags in Deposits of Securities
Potential Red Flags in Securities Trading
Potential Red Flags in Money Movements
Potential Red Flags in Insurance Products
Other Potential Red Flags
For more information, see FINRA NTM 19-18 here: https://www.finra.org/sites/default/files/notice_doc_file_ref/Regulatory-Notice-19-18.pdf
Regulatory Update: OCIE Risk Alert regarding Regulation S-P – Privacy Notices and Safeguard Policies
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”)* provided a list of compliance issues related to Regulation S-P, the primary SEC rule regarding privacy notices and safeguard policies of investment advisers and broker-dealers. The list includes:
-Privacy and Opt-Out Notices.
-Lack of policies and procedures;
-Policies not implemented or not reasonably designed to safeguard customer records and information.
View the OCIE Risk Alert here:
https://www.sec.gov/files/OCIE%20Risk%20Alert%20-%20Regulation%20S-P.pdf
Speaking Engagement: Best Practices for Adapting to Regulatory Notices (Broker-Dealers and Municipal Advisors)
Join Brandon Klerk, founder of Halyard Compliance, at the NSCP National Conference in October for an engaging discussion and overview of the SEC, FINRA and MSRB regulatory notices. Come and hear how firms are finding solutions and responding creatively to stay compliant and evolve compliance and risk programs.
Learning Objectives:
• Hear an overview of recent SEC, FINRA and MSRB regulatory notices and guidance
• Share how other firms are implementing regulatory notice requirements and guidance to stay current; including trusted contact rules.
• Learn about pending rule-making and further guidance released to help comply
• Receive pointers for compliance manuals and written supervisory procedures enhancements
Regulatory Update: MSRB Announces the Effective Date of new Municipal Advisor Advertising Rules
The MSRB announced the effective date for amendments to MSRB Rule G-21 regarding advertising by municipal securities brokers and dealers as well as new MSRB Rule G-40, regarding advertising by municipal advisors (the “advertising rules”). The effective date is now set for August 23, 2019.
Note that the MSRB also amended the advertising rules regarding the supervisory pre-approval requirements to interactive marketing content and published FAQs on social media. These rule aspects and guidance will also be incorporated into updated policies and procedures.
Read the notice. – https://msrb.org/~/media/Files/Regulatory-Notices/Announcements/2019-07.ashx?la=en
Read the FAQs. – https://msrb.org/~/media/Files/Resources/FAQs-on-Use-of-Social-Media-under-MSRB-Advertising-Rules.ashx?la=en
Read the rule filing. – https://msrb.org/~/media/Files/SEC-Filings/2019/MSRB-2019-05.ashx
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