1. Cboe Options Regulatory Circular 18-050 Prearranged Trades

    This Regulatory Circular restates policy concerning prearranged trading. Trading Permit Holders/Members are cautioned that any purchase or sale transaction or series of transactions, coupled with an agreement, arrangement, or understanding, directly or indirectly to reverse such transaction which is not done for a legitimate economic purpose or without subjecting the transactions to market risk, violates Exchange Rules and may be inconsistent with various provisions of the Securities Exchange Act of 1934, as amended, (the “Act”) and rules thereunder. All transactions must be effected in accordance with applicable trading rules, must be subject to risk of the market, and must be reported for dissemination.


  2. MSRB Regulatory Notice 2018-33 MSRB Files Content Outline for the Municipal Advisor Principal Qualification Examination (Series 54)

    The MSRB filed the Series 54 examination content outline with the SEC for immediate effectiveness. The Series 54 examination content outline has been developed to assist municipal advisor principal candidates in preparing for the Series 54 examination and sets forth key concepts and rules to be tested on the examination and the percentage of the examination devoted to each topic area. The Series 54 examination content outline, which is available on the MSRB’s website, describes the following three topical sections comprising the examination: (1) Understanding the Municipal Advisor Regulatory Framework (25 questions); (2) Supervising Municipal Advisory Activities (35 questions); and (3) Supervising Municipal Advisor Firm Operations (40 questions). Additionally, to familiarize individuals with the format of the Series 54 examination, the content outline includes sample questions similar to the type of questions that may be found on the Series 54 examination.


  3. SEC Release No. 33-10593 Disclosure of Hedging by Employees, Officers and Directors

    A new rule Dodd-Frank Wall Street Reform and Consumer Protection Act requires a company to describe any practices or policies it has adopted regarding the ability of its employees (including officers) or directors to purchase financial instruments, or otherwise engage in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of equity securities granted as compensation, or held directly or indirectly by the employee or director. The new rule requires a company to describe the practices or policies and the categories of persons they affect. If a company does not have any such practices or policies, the company must disclose that fact or state that hedging transactions are generally permitted. The new disclosure is required in a proxy statement or information statement relating to an election of directors.


  4. MSRB Regulatory Notice 2018-32 MSRB Provides Compliance Resource on Application of Content Standards to Advertisements by Municipal Advisors under MSRB Rule G-40

    The revised compliance resource is designed to provide practical assistance to municipal advisors with their understanding of Rule G-40’s content standards through the analysis of mock advertisements. The MSRB derived the principles discussed in this compliance resource from Rule G-40 and its related rulemaking record, and this compliance resource should be read in conjunction with Rule G-40 and its related guidance. The compliance resource does not create new legal or regulatory requirements or new interpretations of existing requirements. The MSRB does not intend for this compliance resource to be interpreted by municipal advisors or examining authorities as establishing new standards of conduct.


  5. SEC Release No. 33-10580 Covered Investment Fund Research Reports

    The Commission is adopting a new rule under the Securities Act of 1933 to establish a safe harbor for an unaffiliated broker or dealer participating in a securities offering of a covered investment fund to publish or distribute a covered investment fund research report. If the conditions in the rule are satisfied, the publication or distribution of a covered investment fund research report would be deemed not to be an offer for sale or offer to sell the covered investment fund’s securities for purposes of sections 2(a)(10) and 5(c) of the Securities Act of 1933. The Commission is also adopting a new rule under the Investment Company Act of 1940 to exclude a covered investment fund research report from the coverage of section 24(b) of the Investment Company Act, except to the extent the research report is otherwise not subject to the content standards in self-regulatory organization rules related to research reports. We are also adopting a conforming amendment to rule 101 of Regulation M, and a technical amendment to Form 12b-25.


  6. MSRB Regulatory Notice 2018-30 SEC Approves Amendments to MSRB Rule G-3 to Establish a Municipal Advisor Principal Qualification Examination

    The MSRB recently received approval from the SEC to amend MSRB Rule G-3, on professional qualification requirements, to require municipal advisor principals – those who engage in the management, direction or supervision of the municipal advisory activities of the municipal advisor and its associated persons – to pass the new Municipal Advisor Principal Qualification Examination (“Series 54 examination”) to become appropriately qualified as a municipal advisor principal. The amendments to Rule G-3 also (i) require individuals who cease to be associated with a municipal advisor for two or more years, at any time after having been qualified as a municipal advisor principal, to requalify by examination unless a waiver is granted; (ii) add the Series 54 examination to the list of qualification examinations for which an individual can seek a waiver; and (iii) provide that municipal advisor representatives may function as a principal for 120 calendar days without being qualified with the Series 54 examination. The rule changes will become effective on December 20, 2018.


  7. SR-FINRA-2018-036 Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Test Results Information on the Content Outlines of FINRA Qualification Examinations

    Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) revisions relating to test results information on the content outlines of certain FINRA representative- and principal-level qualification examinations.


  8. SR-NASDAQ-2018-078 Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend, Reorganize and Enhance its Membership, Registration and Qualification Rules

    Nasdaq has adopted registration requirements to ensure that associated persons attain and maintain specified levels of competence and knowledge pertinent to their function. In general, the current rules require that persons engaged in a member’s investment banking or securities business who are to function as representatives or principals register with the Exchange in each category of registration appropriate to their functions by passing one or more qualification examinations, and exempt specified associated persons from the registration requirements. They also prescribe ongoing continuing education requirements for registered persons. The Exchange now proposes to amend, reorganize and enhance its rules regarding registration, qualification examinations and continuing education.


  9. FINRA Information Notice 10/02/18 Administrative Changes to the Continuing Education Regulatory Element Programs

    Effective December 8, 2018, the content from the S106 and S901 Regulatory Element Continuing Education (CE) Programs will become part of the S101 Regulatory Element CE Program. The S106 and S901 CE Programs will be retired as stand-alone programs. Individuals who previously completed these programs instead will be required to complete the S101 CE Program. The S101 CE Program will include new personalized modules for each of the following representative categories: Investment Company and Variable Contracts Products, Investment Banking, and Research.


  10. Cboe Options Regulatory Circular 18-035 SEC Staff Issues Guidance on Third-Party Recordkeeping Services

    The purpose of this Regulatory Circular is to inform Trading Permit Holders and Members that the SEC staff recently issued guidance regarding contractual arrangements between broker-dealers and third-party recordkeeping service providers. The guidance specifically focuses on contractual arrangements that include provisions under which service providers assume a right to delete or discard the broker-dealer’s records required to be preserved pursuant to Securities Exchange Act of 1934 (“SEA”) Rules 17a-3 and 17a-4, typically in response to non-payment by the broker-dealer of fees due under the contract.


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