News & Events

In a little more than ten weeks, new rules go into effect that require municipal securities dealers to disclose the mark-ups and mark-downs they charge when selling municipal bonds to retail investors. Despite a significant notice and comment period, the provision of a year and a half of lead time, and considerable substantive guidance, bond traders are said to be scrambling to meet the May 14th implementation date. They may yet get some relief. We take a closer look at where things stand.

Tech firms are scrambling to gain a piece of the 8.5 trillion-dollar financial industry market, and financial institutions are racing to partner with tech firms to create competitive advantage. Regulators and legislators, mindful of protecting investors and ensuring the integrity of the financial markets, are simultaneously promoting fintech business innovation, issuing enforcement warnings, entering into regulatory collaborations, and looking to regtech to help them adjust to the shifting paradigm. Highlights of federal and state activity over the past few weeks demonstrate this dynamic and their concerns. Bates Research dives into the details.

In the sixth annual publication of examination priorities, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) identified four “pillars” of their mission to protect investors and ensure the integrity of the U.S. capital markets. The 2018 OCIE priorities are consistent with these pillars and do not reflect a significant new direction for OCIE. Beyond the specific highlights, however, there is a clear concern about limited regulatory resources and a corresponding enthusiasm for the use of data, technology and analytics. Bates Research has the details.

The SEC has announced their examination priorities for 2018.

With a week to go before broad FINRA rules intended to protect seniors from financial exploitation take effect, activity across the federal and state landscape shows no sign of slowing. In addition to looking at the updated FAQs released by FINRA in relation to the new rules, we also review reaction to the passage of the Elder Abuse Prevention and Prosecution Act, consider this week’s House passage of the Senior $AFE Act, and highlight some important state-level developments.

Bates Group is pleased to introduce our new experts and consultants: David Gibbons, Allen Margolius, Robert Morris, Daniel Perkins, Ricardo Ramos and Lloyd Wennlund.

FINRA followed up its recently-issued regulatory and examinations priorities letter with the publication of a 2018 annual budget summary containing financial guiding principles. This new disclosure is another first for the self-regulating organization as it continues on a path toward more transparency and accountability. FINRA President Robert Cook also had a chance to comment on this in person at a SIFMA-CL lunch in New York City this week with industry members.

Bates has some key takeaways from FINRA’s latest disclosures.

Legislators, regulators and enforcement officials are providing a glimpse of what is likely to be a formidable year in the development of a new anti-money laundering (AML) framework. Recent AML activities, summarized last month by Bates Research, included new FINRA compliance guidance for member firms and the launch of the FinCEN “Exchange” program to facilitate greater information sharing between the public and private sectors. Since the first of the year, the U.S. Senate has held hearings on several core AML reforms, the Treasury Secretary alerted financial service firms that AML and know-your-customer (KYC) rules apply to crypto-currencies, and the Comptroller of the Currency and the N.Y. Department of Financial Services (DFS) imposed substantial AML penalties against two large institutions. Bates Research has the details.

This week, FINRA released its Regulatory and Exam Priorities for 2018. The Priorities Letter is intended to be a reference point for firms to prepare their compliance, supervisory and risk management programs, as well as to prepare for FINRA examinations. While most of the priorities from previous years remain in force, there are a handful of new topics and new emphases stemming from regulatory developments during 2017. Bates Research explains how these priorities have changed over time and what's in store for 2018.

FINRA has announced their regulatory and examination priorities letter for 2018.

A flurry of year-end announcements reveals a determination by state advocates toward more aggressive state protection of investors and consumers. NASAA published results from a recent survey of state regulators concerning the top investor complaints and investigations in 2017. Governor Andrew Cuomo announced a proposed new rule to amend New York’s current suitability regulation “to provide a best interest standard of care for all sales of life insurance and annuity products.” Democratic senators introduced a bill to give state Attorneys General expanded authority to ensure national bank compliance with state law. Here’s a brief look.

Ronald H. Filler is a Bates Group affiliate expert witness in the area of financial services law.  He has 35+ years of experience in the futures/derivatives/securities industries and is a frequently requested speaker on trading and market regulation, both nationally and internationally.  We are pleased to share Professor Filler’s upcoming 2018 publication and presentation and recent 2017 published articles and speaking engagements.

Bates Group is proud to introduce our newest experts: Perry Chesney, Tim Durno, Jeff Holik and Kevin Neal.

Legislators and regulators continue their uneven path toward a more comprehensive and inclusive framework to combat international money laundering. In the past few weeks, FINRA provided new anti-money laundering (AML) guidance to member firms as it issued a first-of-its-kind public summary of an examination of broker-dealer compliance programs. The U.S. Treasury Undersecretary for Terrorism and Financial Intelligence (TFI) announced the launch of a new FinCEN Exchange to support the TFI's approach to Bank Secrecy Act (BSA) requirements. In addition, regulatory and legislative initiatives moved forward to broaden the scope of authority for law enforcement agencies.

Only a few weeks ago, SEC Chair Jay Clayton made clear that trading in virtual currencies can present a significant risk to investors and poses unique regulatory challenges. He warned that investors are vulnerable to price manipulation and fraud because they may lack information about online platforms that list and trade virtual coins or tokens offered and sold in initial coin offerings (“ICOs”). He pledged to provide more clarity and transparency about the risks, and he promised the SEC would publish guidance for investors on standards, process, value and existing protections

Another high-profile cyber breach was disclosed last week. Uber, the app-based transportation service, announced that, in 2016, hackers stole information including names, email addresses, phone numbers and driver’s license data, related to 57 million drivers and riders. This incident is significant, not only to underscore the vulnerabilities of data on the cloud and corporate servers, but also because it highlights the serious consequences of mismanaging what is becoming an all-too-frequent occurrence.