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Crypto Regulation: Speed and Size of Evolving Market Creates Urgent Need for Framework

02-04-22

Crypto Regulation: Speed and Size of Evolving Market Creates Urgent Need for Framework

In 2021, the market for cryptocurrencies nearly tripled to more than $2 trillion. Recent movement toward some framework over cryptocurrency seeks to balance supporting innovation while reducing risk, but the speed and size of the complex and evolving market is creating urgency. It is now clear that all the players across the executive and legislative landscape are engaged. Here’s a brief update on the latest developments.

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SEC Issues New Guidance on Form CRS Disclosures
Image © [Kristina Blokhin] /Adobe Stock

01-06-22

SEC Issues New Guidance on Form CRS Disclosures

Just before Christmas, the SEC issued new guidance on compliance with the broker-dealer/investment adviser-mandated Client Relationship Summary Form (“Form CRS”). The release provides significant detail on disclosure topics as well as the content, format and posting requirements for the Form. In this article, we review the latest highlighted concerns and key takeaways.

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The SEC’s New Marketing Rule - Webinar Takeaways

12-21-21

The SEC’s New Marketing Rule - Webinar Takeaways

Get the top takeaways to help you deconstruct the SEC's 400-plus-page adopting release of the new Marketing (and Solicitor) Rule. Read this helpful summary from Bates Compliance’s recent Webinar featuring Managing Directors and leading Compliance Consultants Linda Shirkey and Rhonda Lear Davis, CAMS, CFE. Learn about key provisions and practical ways to conform oversight, recordkeeping and disclosure requirements under the rule.

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NASAA Survey Reveals Some Firms Not Operating Under Reg BI One Year Later
NASAA President Melanie Senter Lubin (photo: NASAA.org)

11-18-21

NASAA Survey Reveals Some Firms Not Operating Under Reg BI One Year Later

How SEC Regulation Best Interest (“Reg BI”) became the prevailing federal standard for broker-dealer investment recommendations to clients is a long and complicated story. However, as of its June 30th, 2020 implementation date, Reg BI is the rule, which means that compliance with the rule’s requirements is mandatory and enforceable. In an unpleasant surprise for regulators and rule advocates, results from a recent NASAA reexamination initiative conclude that “broker-dealer firms still are not abiding by the Reg BI rule now in effect.” The report was greeted with strong industry reaction. In this article, Bates takes a look at what NASAA found and how it is being received.

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New Crypto Regulation: Taxation and Oversight Underway, Stablecoins Gaining Support
Image © [Vitalii Vodolazskyi] /Adobe Stock

11-15-21

New Crypto Regulation: Taxation and Oversight Underway, Stablecoins Gaining Support

Government entities have begun in earnest to address concerns over the rapidly expanding crypto marketplace. Congress has passed the Infrastructure Investment and Jobs Act, and the President’s Working Group on Financial Markets issued a substantial report on a framework for regulating stablecoins. These actions on taxation and oversight are the first real steps toward regulation of an industry that SEC Chair Gary Gensler only recently likened to the "Wild West." In this article, Bates takes a closer look at the soon-to-be-new law on digital asset taxation and the proposed regulations on stablecoins amid the broader debate on crypto regulation.

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Climate Change-Related Risk: New SEC Guidance on Disclosures, Treasury’s FIO Evaluating Impact on Insurance

10-15-21

Climate Change-Related Risk: New SEC Guidance on Disclosures, Treasury’s FIO Evaluating Impact on Insurance

Remember 2010? Prince William and Kate got engaged. Tiger Woods apologized. BP Deepwater Horizon exploded. And Mark Zuckerberg was named Time Magazine’s “Person of the Year.” Also in February 2010, the SEC issued guidance to public companies on climate change-related disclosure obligations. Fast forward over ten years later and on September 22, 2021, the SEC Division of Corporation Finance (“Division”) reminded issuers about complying with that 2010 guidance. 

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NASAA Reviews Senior Financial Protections - Uncovers Deficiencies in Policies to Protect Seniors; Promotes Diversity, Equity, Inclusion Goals
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09-30-21

NASAA Reviews Senior Financial Protections - Uncovers Deficiencies in Policies to Protect Seniors; Promotes Diversity, Equity, Inclusion Goals

In September 2021, NASAA published two reports that have implications for the protection of senior investors, including an analysis of the status of NASAA’s Model Act to Protect Vulnerable Adults from Financial Exploitation by states that have adopted it or parts of it and a presentation of coordinated examination results of investment adviser firms by state securities regulators, which found “serious deficiencies” in policies and procedures to protect seniors, among other findings.

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Regulators Turn Up the Heat on SPACs with More Enforcement and Potential Rulemaking
Image: Adobe Stock

09-23-21

Regulators Turn Up the Heat on SPACs with More Enforcement and Potential Rulemaking

Regulators have moved from statements to guidance to alerts and now to enforcement and rulemaking in their efforts to gain some degree of control over the exuberant Special Purpose Acquisition Company (“SPACs”) marketplace. As highlighted in our white paper, published in late April 2021, the SEC had been prolific in stating its concerns about SPACS.

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FINRA Issues Updated Vendor Supervision Guidance, Seeks Feedback on Cloud Computing; Warns of New Phishing Scam
Image © [Andriy Blokhin] /Adobe Stock

09-15-21

FINRA Issues Updated Vendor Supervision Guidance, Seeks Feedback on Cloud Computing; Warns of New Phishing Scam

FINRA remained busy through the end of Summer with several important regulatory actions. New actions included issuing updated guidance on supervision of third-party vendors, requesting feedback on a report by the Office of Financial Innovation (“OFI”) concerning broker-dealer approaches to cloud computing, and raising additional alarms about a phishing campaign using fraudulent FINRA email domains.

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Webinar Takeaways - Employment Issues: What to Expect Going Forward

08-19-21

Webinar Takeaways - Employment Issues: What to Expect Going Forward

Bates Group recently hosted employment litigators and experts for a CLE program to discuss the effects that current and future employment issues have had on workforce reintegration, supervisory activity, mental health and substance abuse, disciplinary actions, and Form U5 language and terminations. Panelists included financial services industry leaders and Bates Group Experts who shared what they are seeing today and what employers and employees can expect going forward in the post-COVID work environment. Bates looks at the highlights and insights from the program.

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The Inevitability of Cryptocurrency Regulation: The Race to Establish a Regulatory Framework is On
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08-12-21

The Inevitability of Cryptocurrency Regulation: The Race to Establish a Regulatory Framework is On

Legislators, administrators and regulators have publicly advocated for government intervention to protect consumers and investors from cryptocurrency price volatility and the fraud and money laundering that has proliferated across digital platforms. With the passage of the bipartisan infrastructure bill in the U.S. Senate, comprehensive regulation of the industry seems inevitable. Meanwhile, SEC Chair Gensler’s recent remarks on crypto assets demonstrate the regulator’s focus on addressing gaps and protecting investors.

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SEC Focuses on Wrap Fee Programs, Fixed Income Principal and Cross Trading Compliance Deficiencies in New Alerts
Image © [Kristina Blokhin] /Adobe Stock

08-04-21

SEC Focuses on Wrap Fee Programs, Fixed Income Principal and Cross Trading Compliance Deficiencies in New Alerts

On July 21, 2021, the SEC Division of Examination issued two new risk alerts on Wrap Fee Programs and Principal and Cross Trading. The alerts were based on the latest observations of compliance deficiencies drawn from extensive examinations. The Division stated that the new alerts should be considered alongside earlier priorities and observations from 2019. In this article, Bates reviews the Division’s recent findings and guidance.

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Coordinating on Ransomware: Federal, State Law Enforcement and Regulators Mobilize
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07-23-21

Coordinating on Ransomware: Federal, State Law Enforcement and Regulators Mobilize

The White House, Congress, federal and state law enforcement agencies and regulators are mobilizing to combat the threat of ransomware. In the wake of high-profile attacks on businesses of all sizes, the Biden administration has made the issue a priority. In this article we focus on the significant recent administrative, legislative and regulatory efforts to confront ransomware, including: strengthening the digital resilience of critical infrastructure, the launch of a new interagency website to support the private sector’s cyber defenses, a $10 million “Rewards for Justice” program to catch cybercriminals, bipartisan cyber legislation, and SEC and NYSDFS developments, to name few.

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FinCEN Posts AML Priorities: A Road Map for Compliance
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07-15-21

FinCEN Posts AML Priorities: A Road Map for Compliance

With the recent publication of its of national priorities for anti-money laundering and countering the financing of terrorism ("AML/CFT"), the Financial Crimes Enforcement Network ("FinCEN") fulfilled one of the core mandates under the Anti-Money Laundering Act of 2020: the establishment and dissemination of national AML priorities. The 12-page document is the product of consultations among the U.S. Treasury Secretary and Attorney General, federal regulators, state financial regulators, and national security agencies. In this article, Bates takes a look at the newly published policy, each of FinCEN’s national priorities, and what your firm and clients need to know. 

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