News & Events –

On November 18, 2020, the SEC made effective FINRA’s proposed temporary rule amendment allowing remote inspections through December 31, 2021. The SEC regulatory action adopts temporary relief (Supplementary Material .17) under FINRA Rule 3110 (Supervision) by providing member firms the option to remotely complete inspection obligations for Calendar Years 2020 and 2021. FINRA stated that the change was a response to the operational challenges presented by the COVID-19 pandemic.

The Financial Crimes Enforcement Network (FinCEN) continues its fast pace, issuing important new advisories, statements and rulemakings. Since September, FinCEN has issued advisories on ransomware, unemployment insurance fraud, and the money laundering aspects of human trafficking, an Order targeting certain residential real estate transactions based on geography, and has proposed specific amendments that affect recordkeeping and travel, as well as broad recommendations affecting Bank Secrecy Act regulations that make up the current anti-money laundering framework. Bates takes a look at the details you need to know.

Join the New York Country Lawyers Association’s Securities & Exchange Committee on Wednesday, December 2, 2020 at 2 pm, when distinguished CLE panel members share their tried and true insights and guidance on managing FINRA virtual hearings and mediations. Hear about current and future virtual FINRA hearing developments to prepare for 2021.

ABA CLE Event: Explore the dangers for seniors & vulnerable investors in the COVID19 era, and the response of regulators. Panel includes nationally-recognized senior issues expert witness & Bates director Joe Thomas, Bates senior issues expert Amy Bard, and Richard Szuch of the New Jersey Bureau of Securities Enforcement Division.

On October 26, 2020, the SEC and FINRA staff held a remote public roundtable to discuss the implementation of Reg BI and Form CRS since mandatory compliance began on June 30, 2020. During the regulators' roundtable, staff reviewed the core obligations required by Reg. BI and Form CRS and their observations on firms' compliance with the new rules, including areas where firms require improvement.

Based on feedback from a retrospective rule review initiated in August 2019, FINRA proposed rule amendments intended to strengthen the ability of member firms to address suspected financial exploitation of seniors and other vulnerable individuals. The proposed amendments would permit a broker-dealer to impose a longer hold period on a senior investor's account and to expand coverage to include holds on transactions in securities. FINRA seeks comments by December 4, 2020. Please read the full article for a closer look.

We asked Bates Group experts and consultants with deep experience in fixed income and municipal securities to share some perspective on how the pandemic has impacted investors over the past six months. Here are some of their insights on recent market volatility, Federal Reserve intervention, credit ratings, and the likelihood of potential investor litigation going forward.

A recent article from WealthManagement.com highlights comments made at the Bates Compliance-SIFMA webinar on virtual branch office visits, held October 5, 2020. This webinar is available for on-demand viewing from SIFMA.and features Bates Compliance Director Jill Ehret.

Today, October 26, 2020, the SEC and FINRA staff will hold a remote public roundtable to discuss their observations on the implementation of Regulation Best Interest (“Reg BI”) and Customer Relationship Summary disclosure form (“Form CRS”) since mandatory compliance began on June 30, 2020. Following the program, on Wednesday, October 28, 2020 at 2 pm ET / 11 am PT, Bates Compliance will hold its own webinar with Global Relay to discuss “Reg BI - 120 Days On.”

In a likely preview of the SEC Division of Enforcement 2020 Annual Report, SEC Chair Jay Clayton and Division of Enforcement Director Stephanie Avakian gave back-to-back speeches regarding the agency’s enforcement record since they took the reins in 2017. In context, these speeches presented a strong accounting of the impact the Division has had on the financial industry during their tenure. The remarks, delivered last month to the Institute for Law and Economics at the University of Pennsylvania Law School, also raised some of the important challenges to the SEC’s enforcement priorities presented by COVID-19. Here are the highlights from their speeches.

Reg BI came into effect on June 30, 2020 and 120 days on, Global Relay and Bates Compliance experts Donald McElligott, Hank Sanchez and Robert Lavigne will assess the impact the biggest change to regulation in years has delivered. Wednesday, October 28, 2020 at 11:00 AM Pacific / 2:00 PM Eastern.

Bates is a proud Gold sponsor of the 2020 NSCP National Conference, October 19-21, 2020. Bates Compliance Manging Director and NSCP Board member Linda Shirkey will be speaking on Day 1 of the conference.

Bates Group expert and consultant Sheila Murphy will be appearing Friday, October 16, 2020 on the Insurance Industry CxO Roundtable webcast. Sponsored by In The House, a private network for General Counsel and other in-house attorneys.

On Monday, October 5, 2020, nearly 700 Compliance, Supervision, Risk, Legal and Regulatory experts and professionals tuned in to a panel discussion covering virtual branch office inspections and the challenges facing regulators and industry supervision and compliance teams. The webinar, jointly organized by Bates Compliance and SIFMA, reviewed the current requirements and status of branch office inspections, recent regulatory relief, and compliance expectations for on-site inspection requirements going forward. Here are some important takeaways from this discussion.

Bates Group is proud to welcome our newest experts and consultants: 

• Gary Ferrari - AML, Financial Crimes, Global Compliance Risk Management
• Barbara A. Halper, JD, MBA - BD-IA Compliance, Seniors and Vulnerable Investors, Compliance Testimony
• Timothy McClendon, CIC, CWCA - Insurance, Workers’ Compensation, Risk Management
• Edward Truax - Insurance and Annuities, 401K/Pension/Retirement, Elder Issues

FINRA Enforcement has recently initiated enforcement actions concerning mutual funds and brokers of record centering around client impact, remediation, and other issues. Read the full Alert to learn more about FINRA Enforcement's focus on "brokers of record," and other products on the regulator’s radar.