1. SEC Release No. 33-10876 Qualifications of Accountants

    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.

    10/16/2020

  2. FINRA Regulatory Notice 20-36 FINRA Requests Comment on a Concept Proposal Regarding the Application of FINRA Rules to Security-Based Swaps

    FINRA requests comment on a concept proposal regarding the application of FINRA rules to security-based swaps (SBS) following the Securities and Exchange Commission’s (SEC) completion of its rulemaking regarding SBS dealers and major SBS participants. Current FINRA Rule 0180, which will expire in September 2021, provides a temporary exception from the application of FINRA rules to SBS, with certain limited exceptions. FINRA is considering revising Rule 0180 to replace the general exception from FINRA rules for members engaging in SBS activities with limited, targeted exceptions from certain FINRA rules where FINRA believes application of the rules to SBS activity is infeasible or inappropriate, particularly where members’ activities are subject to parallel SEC requirements. FINRA is also considering proposing certain modifications to its financial responsibility and operational rules to conform to the SEC’s amended net capital rule and take into account members’ SBS activities, as well as a new margin rule specifically applicable to SBS.

    10/15/2020

  3. FINRA Information Notice10-15-20 Cybersecurity Background: Authentication Methods

    A key element in any firm’s cybersecurity program is a robust authentication process, i.e., the method that confirms that an authorized user seeking access to a firm’s information technology systems is who they say they are. This process typically relies on one or more “factors,” such as a password or personal identification number (PIN) code, to provide the authentication. The importance of sound authentication techniques to protect investors’ and firms’ confidential information has increased in light of 1) escalating threats to the most commonly used form of authentication (single factor or password-based authentication) and 2) firms responding to the COVID-19 pandemic with work arrangements that typically require registered representatives to log in to their networks from a remote location.

    10/15/2020

  4. SR-NYSE-2020-83 Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Current Pilot Program Related to Rule 7

    The purpose of the proposed rule change is to extend the current pilot program related to Rule 7.10 (Clearly Erroneous Executions) to the close of business on April 20, 2021. The pilot program is currently due to expire on October 20, 2020.

    10/9/2020

  5. SR-NYSE-2020-84 Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Pilot Related to the Market-wide Circuit Breaker in Rule 7.12

    The Exchange now proposes to amend Rule 7.1210 to extend the pilot to the close of business on October 18, 2021. This filing does not propose any substantive or additional changes to Rule 7.12. The market-wide circuit breaker under Rule 7.12 provides an important, automatic mechanism that is invoked to promote stability and investor confidence during a period of significant stress when securities markets experience extreme broad-based declines. All U.S. equity exchanges and FINRA adopted uniform rules on a pilot basis relating to market-wide circuit breakers in 2012 (“MWCB Rules”), which are designed to slow the effects of extreme price movement through coordinated trading halts across securities markets when severe price declines reach levels that may exhaust market liquidity. Market-wide circuit breakers provide for trading halts in all equities and options markets during a severe market decline as measured by a single-day decline in the S&P 500 Index.

    10/8/2020

  6. SEC Release Nos. 33-10871 Fund of Funds Arrangements

    The SEC is adopting a new rule under the Investment Company Act of 1940 to streamline and enhance the regulatory framework applicable to funds that invest in other funds (“fund of funds” arrangements). In connection with the new rule, the Commission is rescinding rule 12d1-2 under the Act and certain exemptive relief that has been granted from sections 12(d)(1)(A), (B), (C), and (G) of the Act permitting certain fund of funds arrangements. Finally, the Commission is adopting related amendments to rule 12d1-1 under the Act and to Form NCEN.

    10/7/2020

  7. FINRA Regulatory Notice 20-35 Phishing Email Purporting to Be From FINRA

    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., info5@regulation-finra.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.

    10/6/2020

  8. 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.

    10/5/2020

  9. SEC Release No. 34-89964 Procedural Requirements and Resubmission Thresholds under Exchange Act Rule 14a-8

    The SEC is adopting amendments to certain procedural requirements and the provision relating to resubmitted proposals under the shareholder-proposal rule in order to modernize and enhance the efficiency and integrity of the shareholder-proposal process for the benefit of all shareholders. The amendments to the procedural rules: amend the current ownership requirements to incorporate a tiered approach that provides three options for demonstrating a sufficient ownership stake in a company—through a combination of amount of securities owned and length of time held—to be eligible to submit a proposal; require certain documentation to be provided when a proposal is submitted on behalf of a shareholder-proponent; require shareholder-proponents to identify specific dates and times they can meet with the company in person or via teleconference to engage with the company with respect to the proposal; and provide that a person may submit no more than one proposal, directly or indirectly, for the same shareholders’ meeting. The amendments to the resubmission thresholds revise the levels of shareholder support a proposal must receive to be eligible for resubmission at the same company’s future shareholders’ meetings from 3, 6, and 10 percent to 5, 15, and 25 percent, respectively.

    9/23/2020

  10. SEC Release No. 34-89963 Whistleblower Program Rules

    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.”

    9/23/2020

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