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For Part 1, please see Large Trader-Rule 13h-1 (Part 1). Part 2 A large trader is required to file a Form 13H Initial Filing promptly after effecting aggregate transactions equal to or greater than the Identifying Activity Level threshold. After initial filing, Rule 13h-1(b)(1)(ii) specifies that an annual filing must be made within 45 days after the end of each full calendar year. The SEC will provide large traders with a large trader identification number (“LTID”). The LTID must be provided to each broker-dealer effecting transactions on behalf of the large trader. Each account that a large trader exercises investment discretion Read More....
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Multi-service securities firms have a high risk of insider trading as information can seep through to other departments. The antifraud provisions of the federal securities laws restricts all persons from trading based on material non-public information. Therefore, multi-service securities firms such as those that offer investment banking, corporate counseling, and retail broker-dealer services must take the necessary steps to prevent the interdepartmental flows of material non-public information about corporate clients. To prevent such occurrences, it is required that firms build an internal Chinese Wall. A Chinese Wall is the policies and procedures that a firm establishes to ensure that price-sensitive Read More....
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Recently, two major cybersecurity breaches have been in the news which have been very unsettling for many Americans. First, Equifax, one of the nation’s largest credit bureaus, was hacked exposing 143 million people’s financial data. Second, the Securities and Exchange Commission’s (“SEC”) EDGAR filing system was hacked and it is believed that the hackers made off with information that was used to make money illegally in the stock market.News of these two cybersecurity breaches should make all firms revisit their cybersecurity program. As discussed a few months ago in Cybersecurity for Broker Dealers, it is very important to establish a Read More....
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Critical in every M&A transaction is a comprehensive due diligence investigation. An acquirer/buyer should always have a complete understanding of the all the intricacies of the target company, from operations to financial to legal. Failure to conduct due diligence may lead to major unforeseen issues such as unknown liabilities or overpayment. A buyer should never rely solely on information that the target company has provided but should take the necessary steps to validate. It is important to have a M&A due diligence checklist to ensure that all major areas have been investigated and considered when making the decision to buy Read More....
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As we are approaching October 2017, it is a good idea to review FINRA’s compliance calendar to ensure you are aware of all regulatory filings, request for comments, certification due dates, and conferences and events that are coming up. OCTOBER 2017 October 3rd Short Interest Reporting Due October 5th Advertising Regulation Conference Compliance Boot Camp: District 2 (Del Mar, CA) District Compliance Event: District 2 (Del Mar, CA) District Compliance Event: District 9 (Morristown, NJ) October 9th Customer Margin Balance Due October 13th District Compliance Event: District 3 (Tempe, AZ) October 16th 4530 Customer Complaint Filings Due October Read More....
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A registered investment advisor (“RIA”) is a person or firm that, for compensation, provides advice, makes recommendations, issues reports or furnishes analyses on securities, either directly or through publications. Typically, an RIA manages the assets of high net worth individuals and institutional investors. RIAs have the highest standard of care as they are deemed fiduciaries. As a fiduciary, RIAs owe their clients a duty of undivided loyalty and utmost good faith. If you’re interested in becoming an RIA, you must first have the proper qualifications and registrations. Qualifications Before you can register as an RIA, you must first pass the Read More....
