SR-NASDAQ-2019-066 Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Clarify Rule 4120(c)(9)
Nasdaq proposes to amend Rule 4120(c)(9) to clarify that, if more than one broker-dealer is serving in the role of financial advisor to the issuer, in order to use the Nasdaq IPO Cross, as defined below, to initiate trading in securities that have not been listed on a national securities exchange or traded in the over-the-counter market pursuant to FINRA Form 211 immediately prior to the initial pricing, the issuer must designate one financial advisor to perform the functions under Rule 4120(c)(8).
FINRA Regulatory Notice 19-28 Guidance Regarding Member Firms’ Supervisory Obligations when Participating in Investment-Related Activities with Municipal Clients
FINRA is issuing this Notice to remind member firms of their supervisory obligations under FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) if they hold or transact in customer accounts owned by municipal entities or obligated persons (municipal clients), as defined in Section 15B of the Securities Exchange Act of 1934 (Exchange Act), and participate in investment-related activities with municipal clients, such as recommending or selling non-municipal securities products to such municipal clients. Under these circumstances, member firms are obligatedto determine if such activities require registration as a municipal advisor.
This Notice reminds members of the 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. As more fully described below, the SEC encourages firms to actively engage with SEC staff as early as possible as questions arise when planning for implementation. Firms may send their questions by email to IABDQuestions@sec.gov. FINRA also will assist members in their implementation of the best interest standard in various ways.
SEC Release No. 34-86590 Amendments to Rules for Nationally Recognized Statistical Rating Organizations
The SEC is adopting amendments to rules for nationally recognized statistical rating organizations (“NRSROs”) under the Securities Exchange Act of 1934 (“Exchange Act”). The amendments provide an exemption from a rule for NRSROs with respect to credit ratings if the issuer of the security or money market instrument referred to in the rule is not a U.S. person, and the NRSRO has a reasonable basis to conclude that all offers and sales of such security or money market instrument by any issuer, sponsor, or underwriter linked to such security or money market instrument will occur outside the United States. In addition, the amendments make conforming changes to similar exemptions in two other Exchange Act rules and technical corrections with respect to one of these rules
FINRA Regulatory Notice 19-25 FINRA Requests Comment on a Proposal to Require Reporting of Transactions in U.S. Dollar-Denominated Foreign Sovereign Debt Securities to TRACE
FINRA requests comment on a proposal to expand TRACE reporting requirements to collect information on trades in foreign sovereign debt securities that are U.S. dollar-denominated. Issuance activity in these debt securities has accelerated in recent years and FINRA believes the proposal would provide important regulatory information on an increasingly active segment of the market. Under the proposal, trades in U.S. dollar-denominated foreign sovereign debt securities would be subject to same-day reporting and would not be disseminated publicly.
SR-NASDAQ-2019-044 Order Approving a Proposed Rule Change to Allow an Odd Lot-Sized Order to Be Eligible for the Midpoint Extended Life Order
On May 20, 2019, Nasdaq filed with the Securities and Exchange Commission, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) and Rule 19b-4 thereunder, a proposed rule change to allow an odd lot-sized order to be eligible for the Midpoint Extended Life Order (“MELO”). The proposed rule change was published for comment in the Federal Register on June 4, 2019. The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change.
FINRA Trade Reporting Notice 7/19/19 FINRA Reminds Firms of Their Obligations Regarding TRACE Reporting
FINRA is issuing this Notice to remind members of their obligation to have systems or processes in place to determine whether a transaction in a TRACE-Eligible Security has occurred and is, therefore, reportable, even if it was not included on the TRACE security master list at the time of the transaction. In those circumstances, members should contact Market Operations to add the TRACE-Eligible Security to the security master list and report the transaction to TRACE.
FINRA Regulatory Notice 19-24 FINRA Encourages Firms to Notify FINRA if They Engage in Activities Related to Digital Assets
Last year, FINRA took several steps to engage with members regarding their current and planned activities relating to digital assets. These efforts included the issuance of Regulatory Notice 18-20, which encouraged firms to keep their Regulatory Coordinator informed if the firm, or its associated persons or affiliates, engaged, or intended to engage, in activities related to digital assets, including digital assets that are non-securities. Regulatory Notice 18-20 requested that firms provide these updates to Regulatory Coordinators until July 31, 2019. FINRA appreciates members’ cooperation over the past year and is encouraging firms to continue keeping their Regulatory Coordinators abreast of their activities related to digital assets until July 31, 2020.
Securities and Exchange Commission Release No. 34-86351 Order Granting Approval of a Proposed Rule Change to Amend NYSE Rule 123D
The Exchange has proposed to amend Rule 123D(d) to permit the Exchange to declare a regulatory halt in a security that traded in the over-the-counter market prior to the initial pricing on the Exchange.
FINRA Regulatory Notice 19-23 FINRA Supplements Prior Guidance on Credit for Extraordinary Cooperation
FINRA is issuing this Notice to restate and supplement prior guidance regarding the circumstances under which a firm or individual may influence the outcome of an investigation by demonstrating extraordinary cooperation. This Notice incorporates FINRA’s prior guidance and provides clarification and additional information about how FINRA assesses whether a potential respondent’s cooperation is “extraordinary” and distinct from the level of cooperation expected of all member firms and their associated persons.
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