Policy Patty Toolkit 

Making the world a little more compliant one toolkit at a time.


SEC Adopts Rules That Increase Information Brokers Must Provide to Investors on Order Handling

Posted on November 5, 2018 at 3:20 PM

The SEC announced that it has voted to adopt amendments that will require broker-dealers to disclose to investors new and enhanced information about the way they handle investors’ orders.

Specifically, the Commission has amended Rule 606 of Regulation NMS to require a broker-dealer, upon a request of a customer who places a “not held” order (e.g., an order in which the customer gives the firm price and time discretion), to provide the customer with a standardized set o...

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Regulatory Notice 18-35 - SEC Approves Rule Change to Modify the Dissemination Protocols for Agency Debt Securities

Posted on October 17, 2018 at 1:45 PM

The SEC approved a rule change to modify the dissemination protocols for transactions in agency debt securities to apply a $5 million dissemination cap uniformly, regardless of the rating assigned to the security.

FINRA disseminates transaction information on agency debt securities and displays either the actual size (volume) of the transaction or a capped amount, depending on the size of the transaction and the rating assigned to the security. Currently, for transactions in agency ...

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SEC Actions for September 12-13, 2018

Posted on September 14, 2018 at 9:30 AM

The Securities and Exchange Commission (SEC) news for 09/12-13/2018 includes the following appointments and actions:

United Technologies Charged with Violating FCPA

• The SEC announced that Connecticut-based United Technologies Corporation will pay $13.9 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) by making illicit payments in its elevator and aircraft engine businesses.

• According to the SEC’s order, United...

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CFTC Proposes Rule Update for U.S Markets in Security Futures Products

Posted on July 25, 2018 at 11:20 AM

The Commodity Futures Trading Commission (CFTC) unanimously approved a proposal to update a rule impacting exchanges that list security futures products (SFPs). The proposal has the potential to provide greater liquidity in SFP trading, which would facilitate risk management for entities using SFPs. These changes would update an outdated security futures rule that has not kept pace with position limits on security options, which are under the jurisdiction of the SEC. The proposed updates woul...

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NYS DFS Fines Deutsche Bank AG $205 Million for Unlawful, Unsafe and Unsound Conduct in its Foreign Exchange Trading Business

Posted on June 20, 2018 at 1:00 PM

The NY Department of Financial Services (“DFS”) announced that Deutsche Bank AG has agreed to pay a fine of $205 million as part of a consent order for violations of New York banking law, including efforts to improperly coordinate trading activity through online chat rooms, improperly sharing confidential customer information, trading aggressively to skew prices, and misleading customers. The violations announced today stem from an investigation by DFS into the bank’s F...

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Merrill Lynch Admits to Misleading Customers about Trading Venues

Posted on June 19, 2018 at 2:55 PM

The SEC charged Merrill Lynch, Pierce, Fenner & Smith with misleading customers about how it handled their orders. Merrill Lynch agreed to settle the charges, admit wrongdoing, and pay a $42 million penalty.

According to the SEC’s order, Merrill Lynch:

  • Falsely informed customers that it had executed millions of orders internally when it actually had routed them for execution at other broker-dealers, including proprietary trading firms and wholesale market makers. &...
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FINRA's Proposed Rule Change to Extend the Implementation of FINRA Rule 4240 (Margin Requirements for Credit Default Swaps)

Posted on June 12, 2018 at 8:30 AM

FINRA filed with the SEC a proposed rule change to extend to July 18, 2019 the implementation of FINRA Rule 4240. FINRA Rule 4240 implements an interim pilot program with respect to margin requirements for certain transactions in credit default swaps that are security-based swaps

On May 22, 2009, the Commission approved FINRA Rule 4240, which implements an interim pilot program (the “Interim Pilot Program”;)with respect to margin requirements for certain transactions in cred...

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Volcker Rule 2.0 - Change May be Coming

Posted on May 21, 2018 at 2:40 PM

Wall Street may be getting a break from the Volcker rule by getting more trading freedom as a result of changes U.S. regulators are considering.The draft changes are designed to lower the burden banks face to prove that short-term trades don’t violate the rule. Regulators are also seeking to alter the definition of permitted hedging and market-making activities, to limit the rule’s impact on non-U.S. investment funds, and reduce compliance requirements for banks with trading desks...

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Multiple Regulators Fine Instinet for Market Access Rule Violations

Posted on April 15, 2018 at 3:25 PM

Instinet censured and fined a total of $1.575 million for violations of various provisions of Rule 15c3-5 of the Securities Exchange Act of 1934 (known as the Market Access Rule) and related exchange supervisory rules. The action was taken by various regulators - FINRA and others. The fine was apportioned among FINRA and the Exchanges.

In settling this matter, Instinet neither admitted nor denied the charges but consented to the entry of FINRA’s and the Exchanges’ findings.

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FINRA Proposed Rule Change Relating to the Establishment of a Second Trade Reporting Facility in Conjunction with Nasdaq, Inc.

Posted on April 11, 2018 at 2:20 PM

FINRA filed a rule change with the SEC to adopt rules relating to the establishment of a second Trade Reporting Facility or “TRF” to be operated in conjunction with Nasdaq, Inc. (“Nasdaq”). The second FINRA/Nasdaq Trade Reporting Facility (“FINRA/Nasdaq TRF Chicago”) would provide FINRA members with another mechanism for reporting over-the-counter (“OTC”) trades in NMS stocks and complying with FINRA’s requirements with respect to bac...

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