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Recently, the Securities and Exchange Commission’s Enforcement Division released their annual report detailing its priorities for 2018. The department will be guided by 5 principles: Focus on the Main Street Investor, Focus on Individual Accountability, Keep Pace with Technological Change, Impose Sanctions that Most Effectively Further Enforcement Goals, and Constantly Assess the Allocation of Resources. Principle 1: Focus on the Main Street Investor The Commission recognizes that main street investors, commonly referred to as retail investors, are the most vulnerable in the marketplace. Retail investors are more susceptible to misconduct such as accounting fraud, sales of unsuitable products and Read More....
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As we are approaching December 2017, you should review FINRA’s compliance calendar to ensure you are aware of the last regulatory filings of the year. If you want to attend any conferences or events before the end of the quarter, there are two upcoming seminars. DECEMBER 2017 December 1st New York Region Networking Seminar December 4th Short Interest Reporting Due December 6th -7th South Region Compliance Seminar December 8th Customer Margin Balance Due December 18th Deadline for Comment on Regulatory Notice 17-33 Deadline for Comment on Regulatory Notice 17-34 December 19th Short Interest Reporting Due December 26th FOCUS Part II/IIA-Monthly Read More....
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Earlier this year, FINRA began accepting applications for firms wishing to register as Capital Acquisition Brokers. A Capital Acquisition Broker (“CAB”) is a firm that engages in a limited range of activities. Such activities include advising companies and private equity funds on capital raising and corporate restructuring, and acting as placement agents for sales of unregistered securities to institutional investors under limited conditions. CABs cannot carry or maintain customer accounts, handle customers’ funds or securities, accept customers’ trading orders, or engage in proprietary trading or market-making. Firms that elect CAB status are governed under different regulatory rules so that they Read More....
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FINRA has announced new rules relating to the financial exploitation of seniors and other specified adults. On February 5, 2018, the amendments to Rule 4512 and new Rule 2165 become effective. FINRA Rule 4512 FINRA Rule 4512 will require members to make reasonable efforts to collect the name and contact information of a trusted contact person upon the opening of a non-institutional customer account or when updating the account information in existence prior to the effective date. During the account opening or while routinely updating the information, members must disclose to customers in writing that the trusted contact person may Read More....
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In the securities industry, there are many key players. I’m sure you’ve heard the terms: broker, dealer, and broker-dealer. Although many may assume that the terms have the same meaning, there are in fact not the same. All three play a major role in the activity of the stock market. However, there are several key differences including how they are compensated, the disclosures they are required to make, and their relationship with clients. What is a Broker? The main function of a broker is to buy and sale securities on behalf of clients. The client does not assume a passive Read More....
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One of the key differences between an investment company and a registered investment advisor (RIA) is that advisers are in the business of providing investment advice to others, while an investment company is primarily engaged in the business of investing in securities themselves. Although advisors invest in securities on behalf clients, they do it on an individualized basis unlike investment companies that invest on behalf of clients on a collective basis. If any of a firm’s investment advisory programs are determined to be an investment company thenit will be regulated under the Investment Company Act of 1940 and must comply Read More....
